Total industrial and logistics floorspace take-up fell 22% last year due to weak economic conditions and a shortage of good quality stock, according to property consultancy Jones Lang LaSalle’s latest UK Industrial Property Trends Today report.
Subdued economic activity in 2012 “acted as a drag on property demand”, said the report, with total industrial and logistics take-up in units of over 1,000ft2 totalling 75.3m ft2 (2011: 96.3m ft2). The fall in take-up was greatest for units under 100,000ft2, where it dropped 24%; take-up of ‘big box’ units of 100,000ft2 and over registered a smaller decline of 15%.
Take-up fell across all but two regions of Great Britain – the north east, which posted an 11% increase; and the south west, where it rose 2%. Wales registered the largest decline at 46%.
Supply of available space also fell, with availability 2.3% lower at the end of last year than in September 2011, the report revealed. Total available supply at the end of 2012 stood at 327.4m ft2 – around three quarters of it in units of under 100,000ft2.
Although supply outweighs demand, much of the total available space consists of poor quality units which many occupiers would consider obsolete, stressed Tessa English, senior research analyst at Jones Lang LaSalle. “It does look like there’s a huge amount of available space but realistically, half of it is rubbish,” she said.
Headline prime rental values remained largely unchanged during 2012, though rents did increase slightly in areas with a shortage of prime stock, said the report. There is expected to be some “modest” rental growth in the next 12 months, it predicted, but only in a small number of core markets such as west London and parts of the Thames Valley.
