Robust performance by industrial property market
The region’s industrial property market performed strongly in the second quarter of the year, with take-up of units over 50,000 sq ft in size up by 51%against the long term quarterly average.
A total of 16 deals took take up in the quarter to 4.2m sq ft according to Knight Frank’s quarterly dashboard report.
Key occupational deals included the 197,216 sq ft Liberty 196 at Brackmills, Northampton, which has been let to James & James Fulfilment; the 119,499 sq ft Hub 120, Birmingham which has been let to Beeswift; and Central M40, Banbury – a 334,760 sq ft prelet to Great Bear Distribution.
Industrial sector investment volumes were similarly buoyant, with 17 deals completed totalling £206m – 4% per cent above the long-term quarterly average.
Investment volumes in the Midlands accounted for almost 20% of the national total for the quarter.
James Clements, head of Knight Frank’s logistics and industrial division in the Midlands, said: “The Midlands market has been particularly active during Q2 2020 with several large transactions completing, coupled with additional short-term Covid-19 related requirements.
“The volume of new requirements since the relaxation of lockdown has kept headline rents largely intact. Market level incentives have pushed out slightly but we expect this to be temporary in the size brackets with limited supply.”
The report revealed that business failures are likely to become a factor, especially in the retail sector, increasing the supply of second-hand space.
“This could present an opportunity ,” said Clements. “With returning space inclusive of fit-out meaning lower upfront capital expenditure costs for incoming occupiers.”
