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Property Times

UK industrial: Grade A availability falls over 2013 - Q4 2013

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A research produced by DTZ

Prime availability continued to decline throughout 2013, dropping by 5,3m sq ft. This is expected to be one the main drivers for prime rental growth in the industrial market, with increasingly confident occupiers competing for the limited grade A space that is left. Steady rental growth is expected, with an average of 1.3% per year over the next five years. Rent gains are already under way in regions with the tightest supply, such as the North West and the Midlands.

Take-up across 2013 reached 29.1m sq ft, just 533,000 sq ft short of last year’s total, with the bulk of activity coming in Q2 and Q3. The UK Industrial sector rounded off 2013 with a quitter Q4, with a total take-up of just over 5.4m sq ft. Grade A take-up reached 1.8m sq ft across the UK in Q4 which accounted for 34% of the total take-up volume. A lack of build-to-suit deals in Q4 caused the grade A percentage to drop from 52% in Q3. However the absence of build-to-suit transactions is expected to be an anomaly in the long terms records, as enquiries for this type of transaction are still plentiful, with more deals of this type expected in 2014.

Over £1bn was invested to the industrial market in Q4 for the second consecutive quarter. This contributed to a 2013 total of over £4.1bn, which is well above the annual average of 3.5bn. Domestic investors comprehensively dominated in 2013, with 80% of the total volume invested, compared to 56% in 2012.

Source : DTZ (Groupe UGL)

Keywords : DTZ