Pictured above: Helen Longstaffe

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 East Midlands take-up increased 166% after several large deals were completed. These included Marks & Spencer signing a pre-let on a 900,000 sq ft design and build scheme at East Midlands Distribution Centre, Travis Perkins taking an additional 490,000 sq ft in Northampton and Urban Outfitters taking two buildings in Rushden. Take-up this year is already up 90% on 2009 with retailers accounting for over half of all take-up. Looking ahead, places like Northampton and Lutterworth could experience speculative development if occupiers continue to focus demand in prime areas. 

Helen Longstaffe, Director of Business Space at DTZ in Nottingham, commented on the report: "Although overall take-up was down in the last quarter, take-up in the East Midlands increased reaffirming the region's strategic importance as a location for occupiers."