Industrial floorspace

Citation

(1999), "Industrial floorspace", Property Management, Vol. 17 No. 1. https://doi.org/10.1108/pm.1999.11317aab.014

Industrial floorspace

Industrial floorspace

Keywords Property market, Statistics

The amount of industrial floorspace on the market in England and Wales has increased for the first time in five years, according to the latest survey by King Sturge & Co., the International Property Consultants.

The increase of almost 2 per cent in the second four months of 1998, compares with a reduction of almost 5 per cent in the first four-month period.

The increase of 214,000 m² brings to 11.355 million m², the total amount of factory and warehouse property available for sale or to let throughout England and Wales.

The amount of space on the market had reduced steadily from a peak of almost 17 million m² in August 1993.

King Sturge & Co. confirm that this survey is the first tangible reflection of recent movements in the industrial property market.

There are, however, distinct regional variations with Greater London down 3.8per cent, West Midlands down 6.6 per cent and the North-West continuing to show a decrease at 4.8 per cent. The highest increases are recorded in Yorkshire and Humberside at 13.6 per cent and the rest of the South-East at 9.0 per cent. This region being the largest individual market in floorspace terms. It is noted that Scotland shows an increase of 11.7 per cent to 1.542 million m² of which 292,000 m² is in the large buildings category of over 10,000 m².

According to Bob Thompson, Research Partner at King Sturge: "These figures reflect the worsening economic climate. However, there is still a lack of good quality, vacant property on the market".

Large buildingsLarge buildings, defined as over 10,000 m², record an increase of 2 per cent compared with a 5 per cent fall in the last survey directly in line with the overall figures. Up by 48,000 m² the total now stands at 2.102 million m², representing 19per cent of the floorspace available in England and Wales.

Regional variations show an increase in the East Midlands of 37.4 per cent, East Anglia of 55.3 per cent on a small stock, rest of the South-East of 16.4 per cent and the North 16.5 per cent. Conversely reductions are noted in the North-West of 24.3 per cent, Yorkshire and Humberside of 4.2 per cent, West Midlands 10.9 per cent, Wales 8.5 per cent and Greater London 29.6 per cent.

New propertyNew industrial and warehouse floorspace built speculatively for the market shows an increase of 8 per cent compared with a 5 per cent reduction four months earlier. In floorspace terms an increase of 56,000m² produces a total of 739,000m², moving up just one percentage point to 7 per cent of the available floorspace in England and Wales. This materially assists in improving the quality of overall stock on the market.

The South-East and North-West regions are the principal sources of increase at 44 per cent and 38.6 per cent, respectively, with more modest rises in Yorkshire and Humberside and the North of 5.6 per cent and 5.2 per cent. Reductions are recorded in the Midlands, the South-West, Wales and East Anglia. Greater London shows a massive 150 per cent increase but this is from a minimal 14,000m² recorded in April to a still modest 35,000m².

In their publication "Industrial floorspace today", King Sturge & Co. provides regional summaries of the industrial and warehouse property market based on reports from their 14 offices in England, Scotland and Wales.

David Brooks, Industrial Partner at King Sturge and Co., says of the latest findings: "Although this is the first upturn in the overall figures since 1989 and follows a long period of reduction, the market is very different this time round. There is not the substantial amount of speculative buildings overhanging the market as in 1989 and the differential in rents between new build and existing space is more realistic which should lead to a more stable market".

The King Sturge & Co. industrial floorspace survey is conducted three times a year in April, August and December.

The survey covers the total area of buildings on the market over 500m² in area, but excludes properties at or near site value as well as semi-derelict properties unsuitable for refurbishment.