AVERAGE prime and secondary rents in the Midlands’ logistics and industrial sector have remained static over the last 12 months, new research suggests.
The ‘Logistics and Industrial Big Sheds Rent Map 2011’ put 12 locations in the West and East Midlands under the spotlight but found that not one of them had shifted by so much as a penny.
Five years ago, prime rents for 200,000 sq ft plus sheds ranged from £4.50 to £6, according to Colliers International which compiled the report, with the range now between £4.25 and £5.
Secondary space has also seen average rentals decline over five years, suggests the report, with top rents in 2006 at £4.75 but which have now fallen to £4.00 in 2011.
Colliers’ Rent Map also reveals land values across the Midlands with lot sizes of 10 or more acres averaging £484 an acre in the West Midlands and £531 in the East Midlands in 2006. These have now fallen to £221 and £200 respectively, the report says.
Simon Norton, joint head of the logistics and industrial department in Colliers’ Birmingham office, said: “Take-up of grade A space in the past three years has started to eat into existing supply, resulting in signs of severe stock shortage.
“The lack of speculative development, due to the scarcity of funding and the general downturn in confidence resulting from the recession, has exacerbated the situation.
“For the first time in years, landlords are beginning to feel they may just have the upper hand and are holding out for better rental terms.
“As far as land values are concerned, developers and speculators have seen the way the market is going, so demand is improving. As a result, land prices will soon start to escalate.
“I suspect the Colliers Big Sheds Rent Map will make very different reading in 2012.”
