Success of discount retailers may drive commercial property
These may be uncertain times for the UK’s economy, but Yorkshire’s industrial and distribution property sector is set to enjoy a positive 2013.
Toby Vernon, senior director of industrial agency at CBRE’s Sheffield office, said; “In total 2.37m sq ft of logistics space in units of 100,000 sq ft upwards was committed to by occupiers across Yorkshire in 2012, which represents a significant improvement on the 770,000 sq ft take-up figure for 2011.
“Take-up was significantly boosted by the leasing of the 750,000 sq ft former MFI unit at Nimbus Park to bargain retailer The Range, the largest single deal in the second half of 2012 on an existing building nationwide.
“Sixty two per cent of the space acquired in 2012 was new, such as Euromax Electronics acquiring the 205,000 sq ft Nexus 36 building at Ashroyd Business Park in Barnsley.”
CBRE’s research shows that supply levels continue to remain high with 4.35m sq ft of logistics space available across Yorkshire at the end of 2012, five per cent down on the end of 2011.
The largest deals of the year have either been on new sites or have been off-market, which means they have had little impact on supply levels. Rental levels for prime buildings generally remain stable at £4.75 per sq ft for units in West Yorkshire and £4.50 in South Yorkshire.
Mr Vernon said: “Looking ahead we expect demand to be driven by three key sectors: online fulfilment centres, bargain and discount retailers and the manufacturing supply chain. We have already seen some knock-on demand generated from manufacturing investment within the region.
“During the second half of 2012, Rolls Royce committed to two manufacturing buildings at the Advanced Manufacturing Park, Sheffield, where it will produce turbine blades for aircraft engines.
“The sites within the region that can accommodate the much larger requirements present excellent opportunities for occupiers seeking to take advantage of competitive rental levels.”