Bristol is the most expensive place in the UK in which to rent industrial space outside London and the South East, according to recent research.
The 2017 Industrial & Logistics Rents Map from commercial property specialist Colliers International shows that in Bristol smaller units of below 100,000 sq ft are attracting prime rents of £8.50 per sq ft for new premises, and secondary rents of £6.50 for older units. For distribution warehouses of over 100,000 sq ft, prime rents have reached £6.50 per sq ft, while secondary rents for older units are £5.50.
Tim Davies, head of the Industrial & Logistics team in the Bristol office of Colliers International, said: “There has been significant acceleration in industrial rents in Bristol since 2014, as a result of stock in the region being at an all-time low, combined with rising demand, much of which is being driven by the requirements of e-commerce for extensive warehouse space.
“There is no end in sight to this imbalance between supply and demand, which during 2016 saw enquiries rising to higher levels than ever before, and some of the most rapid transactions ever witnessed by the Industrial and Logistics team as companies moved quickly to secure available stock and.
“If anything the situation is likely to be exacerbated in 2017 as a result of the local economy being boosted by factors including West of England Devolution, construction of Hinkley Point C, and the success of Central Park at Avonmouth.”
Mr Davies added that the Industrial & Logistics team in the Bristol office of Colliers International had experienced its most successful year ever during 2016, and as a result had expanded the team with the addition of graduate surveyor Evan Whitson.
Major deals brokered last year included representing Lidl in the purchase of 33 acres at Central Park, Avonmouth, for a 600,000 sq ft warehouse; negotiating the letting of Asda’s former cold store at Portbury Way, Portbury; and the off-plan sale of the 60,000 sq ft second phase at Apollo Park in Yate.
The Colliers International 2017 Industrial & Logistics Rents Map shows warehouses in Bristol are attracting higher rents than some locations in the South East, particularly for smaller warehouses of less than 100,000 sq ft which in Bristol are achieving prime rents of £8.50 per sq ft and secondary of £6.50.
Meanwhile, units of under 100,000 sq ft in Banbury and Andover are achieving prime rents of £7.50 and £7.25 respectively and secondary rents of £6.50 and £5.50. In both locations, units of over 100,000 are achieving secondary rents of £4.50.
Industrial rents in Bristol are also outstripping those in comparative major cities such as Birmingham, Manchester and Leeds, which are also achieving secondary rents of £4.50 per sq ft on larger warehouses, and prime rents of £5.75 in Birmingham North West, £6.25 in Manchester and £5.75 in Leeds.
The disparity is even greater with smaller warehouses, with prime rents in Bristol now at £8.50 per sq ft and secondary at £6.50. By contrast smaller warehouses in Birmingham North West, Manchester and Leeds are £5.75, £6.75 and £6.25 respectively for prime and £3.75, £5.75 and £4.75 for secondary units.
Mr Davies added that the industrial rent increases in Bristol during 2016 were part of a wider trend across the South West.
“Prime rents in the South West for units over 100,000 sq ft experienced one of the highest rental growths in the UK by 7% year on year. At current average of £5.40 per sq ft in the South West centres, the rents are the highest we have recorded since 2007.
“Prime industrial rents for small sheds in the South West region increased by 4.5% year on year, currently averaging £6.90 per sq ft. This is above the UK average growth of 3.9% and surpassing the pre-recessionary levels of £6.55 per sq ft for the key South West locations,” he said.
“Secondary rents for big sheds in South West, however, saw an uplift of 12% in the last 12 months, currently averaging £4.10 per sq ft in key centres in the region. Secondary rents, however, are yet to exceed the levels seen before the financial crisis.
“By contrast, UK average prime rents for big sheds increased by 3.3% year on year to the national average of £6.31 per sq ft, showing a return to pre-recessionary levels.”