Pictured above: Simon Lloyd, Head of Industrial Agency at
DTZ
Take-up of industrial space in the UK fell back again in Q3
marking the third successive quarter of falling volumes, according
to DTZ's latest Research UK Property Times Industrial market
report.
The report revealed that take-up of grade A and B stock
outweighed the release of space back to the market, with activity
largely driven by demand from retailers looking to take space to
service new business streams or expand their online retail
offering.
The shortage of grade A space in some locations has meant
attention has switched to good quality grade B stock, availability
in the latter having been reduced by 3% in Q3. The shortage has
also meant that many occupiers are having to be flexible about
location and building specification with a number opting for design
and build.
The report observes that whilst the number of enquiries received
remained low, they were more credible and as a result take-up is
expected to show improvement in Q4, with certain select locations
anticipating some prime rental growth in 2011.
In the West Midlands take-up was 36% lower in Q3 than Q2 as
occupiers proved wary of committing to space with take-up largely
driven by local companies taking secondary buildings or taking
grade A buildings in other parts of the country. In comparison to
other regions, current availability in the West Midlands is
concentrated around secondary stock. Q3 saw online grocer, Ocado
purchase 35 acres of land at Birch Coppice Business Park in
Tamworth which will be used to build a 350,000 sq ft distribution
centre.
Simon Lloyd, Head of Industrial and Logistics at DTZ, said:
"Whilst the reduction in take-up in the last quarter may be seen as
disappointing, in reality, it is a reflection of the limited amount
of available built stock available to tenants."