Big shed shortage on its way, says GVA
FUTURE requirements for industrial occupiers in the West Midlands are likely to be satisfied by design and build solutions as Grade A availability dwindles, according to Birmingham-based property advisor GVA.
GVA’s annual Industrial Intelligence report forecasts an approaching shortage of good quality accommodation, as the Grade A supply chain dries up due to lack of speculative development.
David Willmer, GVA’s director, national markets – industrial, said: “Since the recession, existing speculatively developed space has accounted for a relatively high proportion of the total new space taken, reflecting the competitive deals available.
“However as a result, we are starting to see a lack of supply in some areas, most notably for sizes above 150,000 sq ft.
“Whilst retail failures and consolidations are likely to release more secondhand space onto the market in 2012, the supply of good quality accommodation is likely to decline, leading potential occupiers to look towards design and build solutions.
“We are seeing a particular scarcity of supply for larger sheds, with only three suitable buildings of 500,000 sq ft or above available in the region. A 334,000 sq ft unit that we are letting in Rugby, one of five that we are letting on behalf of Co-Op, has received some very strong interest.”
The report has also indicated that developers are preparing for a market upturn, despite generally muted activity in 2011, while activity in the distribution occupier market remains focused on retail, especially the food retailers, internet operators, discount retailers and the automotive sector.
The report also shows that the Midlands industrial property sector remains closely linked to the automotive and aerospace industries.
