Knight Frank ‘encouraged’ by logistics and industrial forecast

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South Yorkshire’s logistics and industrial market saw an ‘encouraging’ first half of the year – and the forecast is looking promising for the rest of 2012, according to research by Knight Frank.

For units in excess of 50,000 sq ft, the market saw take-up of 835,200 sq ft in from January to June - almost on a par with the full year total for 2011.

Key transactions included Next taking 263,000 sq ft at Hurricane unit, Redhouse Interchange in Doncaster and Home Décor taking 110,000 sq ft at Woodhouse Link in Sheffield.

Knight Frank partner Rebecca Schofield said: “The results for the first half of the year have been encouraging. As recent pre-lets such as Home Décor at Woodhouse Link and Andrew Page at Markham Vale demonstrate, occupiers are now pursuing design and build to satisfy their requirements.

“In broad terms, however, design and build remains uncompetitive in the region as favourable terms are on offer on standing stock, particularly in premises of 150,000 sq ft plus.”

Most of the activity for the first half of 2012 involved second-hand buildings, and take-up comprised a mixture of both leasehold and freehold deals.

“Some local occupiers have a preference to buy rather than rent,” said Rebecca, “and those who are able to secure the necessary funding are in a strong position as they can source their accommodation relatively cheaply in the current market.

“The supply of good quality stock of up to 25,000 sq ft is diminishing steadily and, while we have not seen an improvement in headline rents, incentives are beginning to harden.”

Rolls Royce has recently started on site at a new Advanced Blade Casting Facility at the Advanced Manufacturing Park, in a move that was welcomed by Knight Frank.

Rebecca added; “As well as creating 150 jobs on the site, the development is also likely to start to generate activity in the local supply chains and we can expect this to manifest itself in property market activity.

“Rolls Royce’s commitment to the area is very positive as it demonstrates the region’s growing capability as a centre for advanced manufacturing.

“There are also currently a number of buildings under offer from a broad range of sectors, including distribution, manufacturing and recycling, suggesting that the solid activity witnessed in this first half of the year is likely to be repeated in the second.”