Businesses taking up prime industrial property has reached near-record levels following a series of major regeneration projects in the south, according to Lambert Smith Hampton (LSH).
Industrial property specialists based at LSH’s south coast office report that the take-up of prime industrial space has reached its highest level in recent years – reflecting the surge of new development across the M27 corridor.
The take-up of prime industrial property – which is considered to be of the highest quality and in the most desirable locations – peaked at 228,074 sq ft in Q3 2017 (up by 45% on the previous quarter). Year-on-year there was a remarkable rise of 209,281 sq ft or 1,213% – a statistic underlining the lack of supply in previous years.
It follows several large new industrial developments coming to market, including the completion of the £20m Alpha park scheme at Chandler’s Ford which has seen its first tenant DX Network Services Limited. Other major transactions in Q3 were CooperVision and Berendsen Plc taking up more than 160,000 sq ft at Mountpark, in Wide Lane, Southampton. Pioneer Park, on the Airport Industrial Estate in Portsmouth, was another key development.
The firm’s South Coast Industrial Market Pulse report also shows a surge in enquiries in the third quarter of 2017 – particularly for smaller-sized properties under 5,000 sq ft. The 134 enquiries in Q3 reflects a 20% increase on the same period last year and is higher than in any quarter in 2016.
Adrian Whitfield (pictured), Industrial and Logistics Director for the South Coast team of LSH, said: “With uncertainty around Brexit fuelling a national slowdown in manufacturing, we are pleased to report that the South Coast is bucking the trend.
“A number of prime Grade A schemes, including some of the first speculative industrial developments for many years, have now completed and we have seen significant take-up from businesses, reflecting the robust demand for premises that endures in the region.
“A recent surge in enquiries reflects the vibrancy of small and medium enterprises and I would expect this to have a positive cascade effect on the larger transactions.
“It all adds up to a very healthy industrial market for the South Coast, with some exciting developments still in the pipeline, as we approach the end of 2017.”
LSH also reports:
- A clutch of new developments across the region, including: Canmoor’s speculative development of Merlin Park, in Hilsea, Portsmouth, providing 91,030 sq ft of prime space and due to complete in early 2018; Fareham Borough Council constructing new business hangars suitable for aviation occupiers on its scheme at Daedalus in Lee-on-the-Solent and due to complete in early 2018; the £30m industrial and warehouse South Central development at Nursling on track to open to occupiers in May 2018 and providing three detached units of 39,075 sq ft,49,965 sq ft and 116,895 sq ft.
- Total take-up for all industrial property was 504,359 sq ft – an increase of 20% on the previous quarter and 34% year-on-year.
- As take-up increased, availability of prime stock decreased from the previous quarter. At 452,727 sq ft it represents a reduction of 27% or 171,761 sq ft on Q2. However, year-on-year there has been an overall increase of 90,403 sq ft or 25%.
- Secondary stock saw an increase in availability, totalling 1,608,673 sq ft – a rise of 138,684 sq ft or 10% on the previous quarter.
- Demand for industrial investment properties on the South Coast remains strong, with the majority of buyers continuing to come from UK Funds and local authorities.
