Speculative developments result from rising demand in West Yorkshire
LOGISTICS and industrial property in West Yorkshire is enjoying increased demand, which has encouraged developers to build speculatively.
Stoford and Kier have both submitted planning applications for larger industrial units as the market gathers momentum.
Property consultants Knight Franks expects occupier demand to strengthen on the back of improving economic conditions, while other development sites are likely to start to come forward.
Nicholas Prescott of Knight Frank’s industrial property team in Leeds, said: “Supply constraints, coupled with improving occupier demand, are expected to lead to further increases in rental levels. As occupiers start to compete for the prime buildings and development opportunities, we foresee headline rents and freehold prices rising to new market highs.
“Availability of units larger than 50,000 sq ft continues to diminish. Existing supply currently stands at 1.43m sq ft, down 40% on H1 and 24% on H2 2013.
“As a result, developers such as Stoford and Kier have submitted planning applications to speculatively develop new larger industrial units in the prime logistics locations. One of the largest developments in the region is taking place to the eastern side of Leeds City Centre, where the Council is supporting Muse and Wilton Developments with the development of three units, totalling 160,000 sq ft.”
Manufacturers and distributors are expected to continue to drive demand, with active requirements already seen from Geopost, JLP, Matthew Clarke and ABP.
This follows on from some of the largest deals in the second half of 2014 being agreed by Samuel Grant, Speedy Hire and Express Bi Folding Doors.
Mr Prescott added: “Take-up in the second half of 2014 was 42% lower compared with the first half. However, the second half total was more than double that of the second half of 2013.
“Driven by the lack of available modern premises, take up for pre-lets and design and build remained at a high level in H2, in particular for units sized 30,000-50,000 sq ft. The majority of demand in H2 came from manufacturers and distributors.”
