Jaguar Land Rover helps drive industrial deals

NORTH West industrial take-up increased in the second quarter thanks in part to continued investment by Jaguar Land Rover at Ellesmere Port.

The carmaker took 400,000 sq ft for a new parts and logistic base in May.

According to DTZ it was one of 11 deals that took the regional total to 2.2 million sq ft, up from 1.4 million last year and 1.5 million in the first quarter.

Nationally, industrial take-up increased by 40% to 8.1 million sq ft compared with Q1, while the availability of prime industrial space fell 10% to 18m sq ft.

Tony O’Keefe industrial director at DTZ said higher demand meant fewer deals for tenants.

“Where occupiers have had a free run of available units and effectively ‘spoiled’ in terms of rental deals, short-term leases and frequent breaks, the landscape has now changed,” he said.

“Those seeking quality accommodation must now reassess their expectations and expect to compromise either on quality, location or price.

“We will see a return to more traditional institutional lease terms and an end to the tenant friendly market, particularly in the case of pre-lets.

“This trend will continue to a lesser extent through the second hand market as better quality Grade B space enjoys its day in the sun as demand permeates through the quality strata.”

Meanwhile, a separate industrial report from Knight Frank suggests take-up of 3.2 million sq ft in the first half, down on the 4.2 million in the second half of 2011.

“The slight softening of transactional activity in H1 2012 was arguably as much a consequence of the limited supply of Grade A sheds in the region as it was from any weakening of sentiment,” said the agent.

“Despite the supply constraints, large-scale speculative development remains off the agenda as funding continues to be difficult, if not impossible for large schemes – even in some of the most sought after locations, such as Trafford Park.”