Dorset is crying out for more industrial stock to meet demand on the back of the UK’s booming online economy.
The advisory comes from the Bournemouth office of property consultancy Vail Williams, which has acted on 165,000 sf ft of industrial property transactions since merging with Cowling & West in March.
Bryony Solan, Associate, said: “The prices to acquire premises, and their associated rental yields, have increased in the past 12 months, such is the level of demand for industrial, warehouse and trade counters units.”
She added: “Industry data shows that major investors regard distribution and logistics as a leading asset class to invest in.
“The UK’s exponential growth in online shopping and same-day delivery and just-in-time fulfillment needs, along with a lack of suitable employment land for similar developments, means Dorset is crying out for more industrial development. In essence, online sales are driving unprecedented warehouse requirements.”
Since the start of the pandemic the industrial market has consistently outperformed other commercial property sectors, both in Dorset and throughout the UK, buoyed by the effects of Brexit on UK supply chains and the pandemic on online retail.
Certain sectors experienced record sales during the pandemic which has increased their industrial requirements to meet consumer demand, from online retailers to household improvement companies.
With the connectivity benefits that the A31 trunk road out of the BCP area brings, Dorset has a lot to offer manufacturing, distribution, logistics and e-commerce businesses, reflected Bryony.
Vail Williams’ latest activity in the industrial sector included the letting of a 40,000 sq ft industrial unit in Poole to cosmetics retailer Lush.
Bryony added: “Interest from owner occupiers and investors in freehold industrial properties has also gone up significantly across the region, as we’ve seen with the recent sale of eight brand new industrial units on the first phase at Hoburne Enterprise Park, Ringwood, where we acted for Hoburne Development.
“Regarding the upward trend in pricing, this was the case recently when we sold a 3,820 sq ft industrial investment on the Ferndown Industrial Estate for full quoting price, at just under £500,000, in an off-market deal, achieving a yield of just under 5%.
“Whilst this is all good news for the regional economy, where manufacturing, retail and health are all big employers, businesses will suffer as a result if the supply of high-quality industrial premises doesn’t increase.
“It is also worth noting that Dorset is now the 10th largest urban area in the UK, with 52,000 businesses and a population of 800,000, with low unemployment.
“Occupier demand is being responded to, to some extent, with the delivery of more than 200,000 sq ft of much-needed industrial supply in the pipeline from the developers of 26-unit Bedrock Park, Ferndown Industrial Estate, Ferndown, and 14-unit Westcroft Business Park, Three Legged Cross, near Wimborne.
“Nevertheless, given the level of enquiries we are seeing, much more is needed if we are to ensure the regional economy can emerge from the pandemic on the front foot.”
Vail Williams has been appointed to market the two speculative industrial schemes at Bedrock Park and Westcroft Business Park, both of which are expected to bring high-quality industrial premises to market in 2022.