Amongst the improving buzz of activity surrounding the industrial property sector in 2015, the balance between occupier demand and supply was thrown further off kilter, especially in the realm of sub 10,000ft² properties, according to property experts at FHP.
This meant that negotiations were competitive, but quality isn’t being compromised on.
According to FHP, businesses are increasingly thinking progressively and looking to expand in this upwards turning market. However, despite their desire to progress, they are being stilted in their growth through lack of industrial stock on the market.
Consequently, rental levels have strengthened for landlords over the last 12 months, and improving figures have been further intensified for vendors in the freehold market where stock is less frequently being brought to the market.
Unit 2 Hall View Drive was typical of this improved market momentum, where after just two viewings of the property, Sprite Labels took a 10 year term to facilitate their expansion plans. Chettles Trade Park and the Bloomsgrove Industrial Estate off Ilkeston Road, together with the Blenheim Industrial Estate, are some of the few remaining industrial estates where FHP still has availability.
Harrimans Court on the Lenton Lane Industrial Estate recently followed in the footsteps of a number of industrial estates around Nottingham by announcing full occupancy, and this is true of Morris Court, City Business Park and the Ropewalk Industrial Estate, which all reached full occupancy earlier in 2015.
The problems surrounding the lack of available existing stock are not likely to disappear overnight, but it may not be long before the underlying expansion requirements of larger local businesses, and a steady increase in both rental and freehold values, stimulates the prospect of new development.
Lucinda Hancock of FHP’s Office and Industrial Team said: “There are increasingly fewer options for tenants to choose from within a variety of size brackets that are of real quality, and the sub 2,000 sq ft bracket remains incredibly popular as do opportunities in the realm of 2,000-10,000f sq ft.
“Freehold stock in particular remains hard to come by in the popular industrial areas and typically still attracts significant levels of interest when launched to the market effectively.
“Quality does however still remain key as occupiers continue to expect perfect presentation whether purchasing or leasing, so it is still important that units are launched to the market best presented to ensure maximum chances of achieving a sale/letting swiftly and to maximise prices/rents achieved.”