SOUTH Yorkshire is facing a critical shortage of industrial units, according to a report by commercial property specialists, Knight Frank.
The Logistics and Industrial market report (LOGIC) for the first half of 2015 indicates that South Yorkshire’s industrial and warehousing stocks are extremely low, at a time when demand across a variety of sectors remains strong, with storage and distribution occupiers dominating the market. Despite investor demand also remaining strong, the region had less than 500,000 sq ft of good quality units over 100,000 sq ft available at the end of the first half, the report said.
Rebecca Schofield, partner at the Sheffield office of Knight Frank, said: “The depletion of existing stocks of industrial units across South Yorkshire has created a bottleneck, with many occupier requirements unlikely to be satisfied by existing accommodation. Small to medium-sized units of good quality are particularly under severe shortage, which is compounded by construction costs as a barrier to new development.
“Where we are seeing speculative developments at the smaller end of the scale, it is being driven by local authority support or grant subsidies.
“Those new developments that are coming to fruition are being well received by the mar- ket.”
Nick Wales, partner in the investment division at Knight Frank, said that investor demand remained strong.
He added: “Supply constraints are a relatively recent feature across the region after a flurry of lettings, but the net result is that rental growth across all size ranges is now a realistic prospect in the next six to 12 months.”