Increased demand for industrial and manufacturing space, coupled with the loss of many acres of industrial land due to HS2, has seen an increase in Birmingham industrial rents of between 20% and 25% over the past five years, according to Birmingham independent commercial property agency KWB.
But KWB Head of Valuation and RICS registered valuer, Martin Cook warns that some landlords are seeking to exploit the industrial space shortage by asking for rental increases in excess of 40% at rent reviews.
“Depending on the age and type of industrial unit, the average rent of a Birmingham industrial unit has risen between 20% and 25% over the past five years to £6.50 to £7psf,” says Mr Cook. “The uplift is similar around Solihull, but average rents are higher there at around £8.50psf.
“However some landlords are trying to push the rental market higher on the back of the shortage of industrial space at the five year rent reviews, or in negotiations for a new lease when the tenant wishes to remain in occupation under the 1954 Landlord and Tenant Act.
“This seems to be more prevalent in North Birmingham where the demands of HS2 have seen swathes of industrial land compulsorily purchased and a number of occupiers having to seek new premises.
“I have been negotiating new rental terms for industrial and manufacturing units on behalf of a number of tenants in the Aston and Perry Barr areas, where one landlord started off by asking for an increase of some 42%.
“I negotiated this down to an agreement at some 22% increase, but it is vital that tenants are represented by expert valuers in this rent negotiation process, otherwise they could end up paying well in excess of the current market rate.”