Confidence is rapidly returning to the industrial and logistics sector in Milton Keynes, according to the latest review by national property consultancy Lambert Smith Hampton (LSH).
The newly published half-year market review reveals that the market has picked up since the unexpected General Election campaign through May into June, which led to a degree of uncertainty.
Take-up totalled 642,000 sq ft in 26 deals in the first six months of 2017, says the review, with more than 50% of transactions being in the 5,000-10,000 sq ft range. There is only 360,000 sq ft available in this size bracket, according to the report.
There was only one transaction for a unit of 50,000-100,000 sq ft, which reflects lack of supply in the area, said John McDougal, industrial director at LSH in Milton Keynes.
“The expected slow down that comes with a General Election is now dissipating, which is great news for the industrial and logistics sector,” he said.
“The first six months have been positive for the area with speculative development at Magna Park and Marston Gate helping to fuel confidence, while the return of 10-year lease terms has also boosted the sector.”
Work has just started on Phase II of Chancerygate Business Centre at Denbigh West, a 46,333 sq ft development comprising 15 high-specification units, further contributing to the positive picture in Milton Keynes.
John said rents are expected to rise, albeit at a slower pace than last year, because new developments in the lower size range are still restricted. Supply in the mid-box market – 50,000-100,000 sq ft – will remain tight because of a lack of land on which to build.
“Supply remains close to record low levels with four successive quarters below 1.5 million sq ft. This level is well below the long-term average of in excess of 2million sq ft and only about 12 months take-up,” added John.