Positively, take up of industrial property in Q2 2013 was 9.9m sq ft, the highest level since Q3 2011, according to new research by BNP Paribas Real Estate, the leading property adviser.
UK take up for the first half of 2013 reached 17.1m sq ft, almost 2m sq ft higher than the first half of 2012. Interestingly, design and build deals accounted for 5.06m sq ft of take up in H1 2013, a rise of 69% compared to H1 2012.
Commenting on the data, associate director at BNP Paribas Real Estate, Kevin Mofid said: “The first half of this year has proven that the industrial and logistics market remains to be one of the more robust sectors, with positive take up levels. However, the market has been boosted by several large deals, such as a pre-let to M&S at London Gateway, which was 900,000 sq ft.”
In terms of regions, the Midlands continues to lead the way, achieving the highest amount of take up in the second quarter of this year at 2.4m sq ft. Elsewhere, take up in London and the South East in Q2 2013 was 1.96m sq ft, in the North West it was 2.31m sq ft and in Yorkshire and The Humber it was 1.35m sq ft.
Head of industrial agency at BNP Paribas Real Estate, Nick Waddington, said: “The level of new logistics units available on the market continues to decrease across the UK. Nationwide, supply fell 1.8m sq ft to 142.1m sq ft, whilst the level of new stock in all core regions also continues to fall with just 20m sq ft available nationwide. The occupational figures suggest that it may be the right time for new, larger sized, speculative developments, due to the serious lack of supply.”
Ed Cornwell, senior director in BNP Paribas Real Estate’s national investment agency, added: “Investor appetite remains strong and prime yields are potentially hardening with a focus on multi let estates and long dated distribution income with indexation. Furthermore, the BNPPRE/IPD Logistics Index shows rental growth for the first quarter of 2013, which is being reflected in pricing.”