Business parks take-up remains subdued in region

OCCUPIER activity in the region’s business park office market remains subdued, according to new research.

Take-up has improved across the Midlands, but is quiet compared with historical performance, while the recent trend in improving prime rents has also reversed.

There was also a complete lack of new development across the Midlands for the third report in a row, according to the Summer 2011 Business Parks Review by Birmingham-based property consultancy GVA.

“Occupier activity, as measured by take-up, remained well below average in H1 2011,” it said.

“A total of 248,000 sq ft of take-up was recorded in the latest survey, an increase of 13.7% on the end-2010 result, and up 19.1% on the corresponding period last year.

“Despite the improvement over the past 12 months, the H1 2011 take-up total was still some 27.6% below the current five-year survey average of 340,000 sq ft.”

The report, which covers the first six months of 2011, said the biggest deal in the Midlands was the 23,000 sq ft sale to Kier Group on Blythe Valley Business Park.

Prime headline rents across the Midlands fell by 3.2% in H1 2011, marking the fifth consecutive drop by the Business Parks Review, while tenant incentives remain “generous” with 18 to 24 months rent free on five-year terms.

The report said typical out-of-town rents in June 2011 were £15 per sq ft in Coventry, £14 in Dudley, £12 in Redditch and £15.50 in Wolverhampton while Derby sits at £15 and Nottingham at £16.50.