Dwindling big shed supply causing concern, says JLL

WITH very few big sheds remaining in the “Golden Triangle”, which centres on the M1 and M6, Jones Lang LaSalle (JLL) is seeing a marked increase in demand from occupiers as prime sites start to dry up.

Carl Durrant, director of national industrial and logistics at JLL’s Birmingham office, said: “This is clearly demonstrated by news just breaking that furniture retailer Steinhoff UK has just beaten another occupier to get one of the biggest available warehouses in the Midlands. 

“It is reported to have offered circa £25m for the building on Magna Park in Leicestershire.”

Figures from Jones Lang LaSalle’s Big Box Report 2012 show that barely more than 9m sq ft of big shed space remains to be let across the UK. That equates to less than a year’s take up, even in a reasonably average year such as 2011.

Durrant said: “The occupational market is starting to hot up as occupiers realise that if they don’t make a move soon, there will be little choice to satisfy any expansion or consolidation plans. And if they go down the ‘built to suit’ route which is a growing trend in the industrial market, they could take up to 12 months to find a suitable site and move in.

“Businesses need to plan much further ahead and that planning has to happen now, if they don’t want to be left high and dry.”

JLL says the main players in the occupier market at present are retailers, third party logistic companies and, more recently, automotive companies.

Durrant added: “Developers with land already secured are in the best position to take advantage of an upturn in the market. Prologis for example have announced built-to-suit five year leases to meet the needs of customers in the UK seeking modern distribution space on a short term basis.”