Hopes high of rise in take-up of industrial space

The study, by property services firm DTZ, suggests that property professionals may find reasons to be cheerful in late 2012, because a number of deals are in the hands of lawyers.

According to DTZ, the take-up of industrial space in Yorkshire and North Lincolnshire, reached 320,000 sq ft across four deals in the second quarter.

The largest letting involved furniture company DFS taking 135,000 sq ft at Latitude 135 in Castleford.

Grade A availability stands at 3.6m sq ft, the second highest level in the UK, with a large proportion based in South Yorkshire.

However, the outlook for take-up in the third quarter is promising, according to DTZ, with DHL returning 750,000 sq ft back to the market at Nimbus Park, which is reportedly under offer.

Mike Baugh, a director at DTZ in Leeds, said yesterday: “Although take-up in Yorkshire and the Humber for the last quarter was disappointing, there are a number of deals in solicitors’ hands which have the potential to deliver over 1m sq ft of new take-up this quarter.

“This is very positive news for the region and even though generally enquiries have slowed, there are a number of additional companies currently considering the region, which will hopefully lead to further take-up of the steadily diminishing supply of speculatively built warehouse and industrial space.”

Ben Burston, the head of UK Research at DTZ, said: “The current level of take-up is encouraging given the challenging economic environment.

“While occupiers are naturally wary of the problems in key UK export markets and the attendant downside risks, given the lack of supply we could see incentives hardening and upward pressure on rents in coming quar- ters.”

Nationally, Grade A take-up fell for the fourth successive quarter as the lack of availability restricted demand and occupiers switched their attention to the more abundant good quality grade B stock.

The relative scarcity of grade A space means that despite the fall in take-up, availability fell 10 per cent to 18m sq ft.

The findings are based on DTZ’s Property Times UK Industrial Q2 2012 report, which covers the market for properties over 50,000 sq ft.

The report revealed that take-up of industrial space in the UK rebounded in the second quarter to 8.1m sq ft compared with 5.8m sq ft in the first quarter, which is the highest level for two years.