The continued shortage of industrial space in the South West has resulted in rents for large units experiencing the greatest increase year-on-year in the UK, new research has revealed.
The 2018 Industrial & Logistics Spring Barometer from commercial property specialist Colliers International, shows the regions which have experienced the highest increases over the past 12 months for Grade A units of over 100,000 sq ft were the South West at 6%, London at 5% and Yorkshire and Humber at 5%, compared to a UK average of 4.4%.
Tom Watkins of the Industrial & Logistics team in the Bristol office of Colliers International, said: “Industrial stock in the South West declined to its lowest level ever in 2017, and this combined with increasing demand for premises has continued to drive industrial rents higher across all size ranges.
“The most significant increases in open market rents in the South West over the past 12 months have been for units over 100,000 sq ft in Bristol and Exeter, with rents for prime units rising by 11% and 24% respectively, and secondary units achieving increases of 18 per cent and 25% respectively.
“We anticipate some supply pipeline will be replenished by new speculative schemes now underway at locations including Bridgwater Gateway in Somerset, Vertex Park at Emersons Green in Bristol , and Symmetry Park in Swindon, which will help to meet demand for prime industrial units in prime locations.
“However, judging by the level of enquiries we are already seeing and the demands of e-commerce requirements for extensive warehouse space, we expect these new builds will have short void periods.”
Mr Watkins added that 2017 had been an outstanding year for the Industrial & Logistics team in the South West office of Colliers International, with deals including disposal of a 90,000 sq ft freehold industrial premises at Drakes Court in Plymouth, Devon, on behalf of the Angel Foundation; disposal of the 83,000 sq ft Dezac Building in Cinderford, Gloucestershire, on behalf of Dezac Group; and representing Selco in the acquisition of 35,000 sq ft of space at Horizon 38 in Filton, Bristol.
The Colliers International 2018 Industrial & Logistics Spring Barometer also shows that a record £1bn of industrial assets were transacted in 2017, an 80% increase year-on-year. Overseas investors accounted for 44% of UK industrial investment last year, compared to 18% in 2016.