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According to Jones Lang LaSalle’s latest UK Industrial Property Trends Today report
London, 2 April 2013 – New industrial research from Jones Lang LaSalle shows that the total available supply of industrial and distribution floorspace across the UK continues to fall. At the end of 2012 the total amount of available floorspace in units from 1,000 sq ft was 1.6% lower than three months earlier, and 2.3% down on 15 months ago according to the firm’s latest UK Industrial Property Trends report.
At the end of 2012 a total of 327.4 million sq ft of industrial and logistics floorspace was available across the UK, of which 240.6 million sq ft (73%) was in units from 1,000 sq ft to 99,999 sq ft. Only around 16% of the total available floorspace in this size band was in new or refurbished properties.
Tim Johnson, Director, Jones Lang LaSalle’s UK Industrial & Logistics team, commented: “With availability continuing on a downward trend, and much of the supply being in poorer quality units, there are shortages of good quality space in many locations. Although our records show that some 744,000 sq ft is under construction on a speculative basis, there is a strong case for more speculative development in certain markets, especially in and around London and the wider South East.”
Jon Sleeman, Director, UK Industrial & Logistics Research at Jones Lang LaSalle, added: “Total industrial take-up was 22% down last year on 2011, which was due partly to weak economic conditions but also to a shortage of good quality available buildings. Official economic forecasts, published with the Budget, suggest a modest pick-up in economic growth this year, with stronger growth in 2014, and we expect this gradual improvement to lead to a higher level of demand from businesses and take-up over the medium-term.”
Overall, Jones Lang LaSalle’s UK Industrial Property Trends report predicts:
• Demand to increase this year, as the economy gradually picks up;• A pick-up in speculative development;• Some modest rental growth, although largely confined to core markets;• Investors to continue to focus on multi-let industrial stock in London and the South East;• Prime multi-let industrial yields to remains stable in the short-term with poorer secondary yields moving out further.
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