DTZ report reveals record breaking year for West Midlands industrial property market
THE West Midlands was the best performing region of 2014, achieving higher annual grade A industrial property take-up than any other region and a record take-up volume overall.
DTZ Research’s Industrial Property Times report for H2 2014 also revealed that a record 14.8m sq ft of grade A space was taken over the last 12 months.
According to the latest figures from the property consultancy. total UK take-up reached 32.6m sq ft over 2014, the highest since 2010, driven largely by improving economic sentiment and retailers expanding their logistics networks in response to the growth in online shopping.
2014 also saw the re-emergence of speculative development in response to the lack of available grade A space.
Take-up was strong for manufacturing (8.8m sq ft), logistics (6.8m sq ft) and retail sectors (12.7m sq ft). Jaguar Land Rover was the most active individual firm in the market in 2014, taking three buildings totaling 673,000 sq ft across the West Midlands.
Industrial prime rents are beginning to increase nationally, given the rise in activity and low level of grade A availability, which is driving competition between occupiers. Investor demand was strong in 2014, resulting in a record £6.1bn transacted in total.
The largest investment deal of the year was Legal and General’s acquisition of the Ocean Portfolio – a multi-let, industrial and logistics portfolio of 12 assets across the UK including Fradley Park in Lichfield – for £226.5m.
Simon Lloyd, Birmingham-based national head of industrial and logistics at DTZ, said: “Take-up of grade A buildings at increasingly high levels is giving further encouragement to landowners to construct buildings speculatively in order to satisfy some of the pent up demand.
“The increase in speculative building over the last 12 months has been significant and we expect this trend to continue in 2015.”
