Birmingham and the Black Country’s ability to bounce back from the economic chaos caused by the Covid-19 pandemic risks being seriously undermined by a severe shortage of industrial units to buy or to rent, according to a leading West Midlands commercial property agent.
Ed Siddall-Jones, managing director of Siddall Jones which has offices in Birmingham and Dudley, said the problem was a serious Midlands-wide issue that is damaging the region’s recovery.
And he warned that prices for both freeholds and leaseholds are set to rocket if the amount of industrial space coming to market continues to lag well behind demand.
“Essentially, there is a severe shortage of industrial stock and both rental and capital values are set to increase exponentially. Most of our industrial instructions are achieving well over the asking price or rental quoted, and in most cases resulting in us having to go to best and final offers.”
He cited a flurry of sales and lettings by Siddall Jones in recent weeks.
80 Dollman Street, Birmingham, a warehouse of 9,181 sq ft sold in less than a week at its asking price of £750,000.
A variety of industrial buildings and retail units totalling 11,885 sq ft in Newtown Row and Pritchett Street sold for £100,000 over the asking price of £550,000, after the deal went to best and final bids.
For Devonshire House, a 25,748 sq ft warehouse in Wolverhampton on 2.57 acres, Siddall Jones organised two block viewings resulting in offers at the asking price of £1,375,000.
For 2 New Sutton Road, a former Maplins store of 2,122 sq ft on 0.28 acres, Siddall Jones again asked for best and final bids and achieved well over the asking price of £625,000.
It took only two weeks to let 6 Mott Street, a 3,536 sq ft industrial unit in Hockley – again going to best and final bids based on a quoting rental of £17,500 per annum.
And an international retailer agreed terms on 18-22 Studley Street, a 3,525 sq ft modern warehouse with yard available on a new lease at a quoting rental of £22,000 per annum.
Mr Siddall-Jones said: “There is always a focus on the giant lettings to Amazon-type logistics and retail companies, but the truth is that the engine room of the UK commercial property economy is, and always has been, small to medium-sized units.
“At present, we simply cannot source enough industrial space to satisfy demand and we are desperate to hear from anyone with space they wish to sell or let.
“We also need industrial developers to take the plunge and build on spec to provide a pipeline of industrial units down the line.
“This will require both the support and the willingness of the likes of Birmingham City Council and the West Midlands Combined Authority to help bring suitable land to market and oil the process so that development of vital employment land is not unnecessarily hindered by bureaucracy and planning delays.”
He said the media was full on a daily basis of announcements of major residential developments in and around the city centre, but it was employment land that was currently most in demand.
“If you have space you wish to sell or let, large or small, then we are very keen to hear from you,” he said.