South Yorkshire’s industrial property market continued to see improved activity during the second half of 2015, says commercial property agents Knight Frank.
In line with improving economic fundamentals, occupier demand from a wide variety of sectors including warehousing, general industrial and manufacturing, remained strong with retailers and associated logistics operators dominating demand for the larger units.
Knight Frank’s latest Logic report highlights how multi-channel retailing has become more relevant to the distribution sector resulting in some occupiers seeking premises with larger yard areas. Parcel carriers continued to expand to cope with the growth of on-line retailing.
As a result, Knight Frank has seen increased occupier requirements often for low density, bespoke sites at a local and regional level.
Rebecca Schofield, who heads up the Yorkshire industrial team from Sheffield, said: “There is a shortage of units across all size ranges within the South Yorkshire Region. There is currently only one modern building of over 100,000 sq ft immediately available.
“We have started to see a developer response to the shortage of stock with Harworth Estates on site with a speculative 75,000 sq ft at Gateway 36, Barnsley and Verdion are on site with two units at I-Port in Doncaster.
“There continues to be good levels of demand for small to medium sized units of good quality. Rebecca added that construction costs will continue to be a barrier for this type of speculative development.”
She added: “Schemes which have come forward have witnessed good levels of demand but have had local authority or grant support for them to be viable.
“Overall, incentives are reducing, headline rents are hardening in certain size brackets and lease terms are lengthening as evidenced by recent deals and will continue to do so.”