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News Release

London

Heathrow and West London’s Industrial market remained resilient during first half of 2010

According to Jones Lang LaSalle’s H1 2010 Western Corridor Market Headlines


London, 11th August 2010 – Jones Lang LaSalle has today released its Western Corridor Industrial leasing market headlines for the first half of 2010 (H1 2010) which shows that, despite the continuing uncertainty in the UK and global economies, key markets within the region have proved to be relatively resilient, with a total of 1.59 million sq ft let during the first six months of the year.

Occupier activity in the West London market remained subdued but steady in H1 2010, with almost 779,000 sq ft of space let, an increase of 3% on H2 2009.  The vast majority of space leased in this sub region was grade B with grade A take-up accounting for only 160,000 sq ft.

Around Heathrow/Feltham/Poyle just 118,000 sq ft was let in H1 2010 and none of this space was grade A albeit there is a good supply of quality stock available.  Greenford fared marginally better with 140,000 sq ft, substantially down on the 374,000 sq ft recorded in H2 2009. In the Heathrow area there is now 690,000 sq ft of vacant grade A stock with no new construction underway.

Bridget Outtrim, Director, Jones Lang LaSalle’s Industrial & Logistics team, said: “Whilst transactional activity across the Western Corridor region has reduced, the West London market has remained relatively resilient which is perhaps surprising given its exposure to the volatile air cargo sector around Heathrow.  West London has a broad occupier base and the lull around Heathrow has been offset by activity around Park Royal and the A40 which meant that, in the end, take-up was marginally higher than the previous half year, albeit still running below the long term average for the region.
 
“It seems that the need for goods and services to serve London's huge and growing population, combined with an ability to stem the flow of development relatively quickly, has carried the West London Industrial property market through a difficult period.”
 
Thames Valley industrial leasing markets have performed relatively well in recent years with Slough in particular having a long track record of robust activity. More recently, Reading has emerged as an active marketplace with nearly 200,000 sq ft leased in the area during the first half of the year.
 
Bridget Outtrim concluded: “Landlords responded to the slowdown in core markets by reducing asking rents last year and there is evidence of further reductions of between 2% and 5% in 2010. Generous incentives remain available to secure deals and the discount for grade B space can be anything up to 22% in the core markets of Heathrow, Greenford and Park Royal and 15% in Slough.”
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