Region’s business park lettings slip
TAKE-UP at business parks in Yorkshire is virtually at a standstill, according to new research.
The survey, by GVA Grimley’s latest Business Park Review 2008 has revealed that take-up for business parks in the region was 373,000 sq ft in the first six months of this year compared to 367,000 sq ft let in the second half of 2007.
The figure was down on the 665,000 sq ft which had been let across Yorkshire at this time last year.
Nationally, there has been the lowest recorded levels of six-monthly take-up since the first half of 2004, with 2m sq ft let compared with 3m sq ft in the first half of last year, the review claimed.
However despite low take-up levels, the report said that there remained a positive level of demand and a strong level of enquiries within the region for business parks, and the take-up of space, pre-lets and further lettings being progressed was noticeably stronger than within other regions.
The business park with the greatest amount of space let was Callflex Business Park in South Yorkshire, and the park with the most amount of available space in Yorkshire is Leeds Valley Office Park (153,000 sq ft).
The amount of new space currently under construction is down considerably in Yorkshire and the Humber, with just 585,000 sq ft being built at the end of June, compared to 890,000 sq foot the previous six months.
Nationally there was a 25% rise – up to 4.5m sq ft from six months ago.
GVA Grimley’s report indicated that in the region out-of-town prime rents grew by just 0.5% over the past 12 months, while showing no increase at all over the past six months.
Rents in Leeds remained steady at £20 sq ft, Sheffield’s stood at £15.25, York’s were £16.50 and Bradford’s £15 sq ft.
Across the UK, these rents grew by 3.8% over the year and 2.3% over the last six months. However the report predicted a fall in rental levels of -1.3% in 2009 and a drop of -0.3% in 2010 before showing signs of positive rental growth in 2011 of 1.5%.
Dan Hodge, head of office agency at GVA Grimley in Leeds, said: ”We haven’t seen a massive decrease in demand for business parks here in 2008 and we believe this will remain unchanged, although due to build-out times, we’re predicting a decrease for the next two years.
“The increase in speculative development is a warning for the future. The main issues are that take-up is down and is starting to dip below the trend line whilst at the same time construction hasn’t started to fall.
“If there was more committed construction going on, it would usually indicate the healthy state of the market, but with speculative construction on the increase, we will enter a period of over-supply and increased vacancy rates.
“In December we’ll be revealing our figures for the next six-months and because of the finance market impact, we will be expecting a fall in speculative construction and a rise in vacancy rates.”
