The industrial property market in the West of England has reached tipping point, with indicators signalling the return of speculative development in the near future, according to a leading industrial expert in the region.
Russell Crofts, partner at Knight Frank in Bristol and leader of the distribution sector group of the West of England Local Enterprise Partnership (LEP), said: “There is no doubt that the market is improving with incentives reducing as a consequence. Confidence and headline rates are increasing and this combination signals the start of speculative construction in the very near future.
“The Industrial Agents Society 2013 half yearly figures indicate a return to pre-recession levels of uptake at 1.416 million sq ft.”
Russell Crofts believes Bristol must shortly follow the lead recently set in Gloucester, where he is one of the agents appointed to market Phoenix House at Waterwells Business Park. Glenmore Developments has started work on two speculative industrial/warehouse units there which will offer 21,900 sq ft of space at the beginning of next year.
“It’s now time for Bristol and the surrounding area to catch up,” he said.
While the distribution sector remains the key driver in the region’s industrial property sector, he believes the rising number of entrepreneurs is also starting to impact.
“Government initiatives mean that more demand is now coming from small-scale manufacturing businesses, driven by entrepreneurs who see funding loosening up and an opportunity to expand,” he said.
Russell Crofts has also challenged local authorities to ensure that their local plans reflect changing situations and do not hinder the new growth.
“Local authorities have been asked by the Government to review their plans for the next decade, and in some instances this has revealed anomalies which lead to arbitrary hurdles to growth and market confidence.
“For instance, South Gloucestershire Council decided upon a policy whereby any distribution activity greater than 10,000 sq ft has to be at Severnside. This means that a typical small business employing 15 people in somewhere like Yate will now have to move to Severnside if they want to expand. That should be challenged, as the 10,000 sq ft level has no link to what happens in the real market.
“If the policy is driven by concerns over traffic movements in residential areas it should be noted that the distribution sector is one of the best for avoiding rush hour pressures as traffic movements are spread more uniformly throughout the day.”