Pictured is Muse’s Logic Leeds development
The industrial property market in West Yorkshire remains strong, despite fears that the sector would be badly hit following the uncertainty caused by the Brexit vote, according to global property consultancy Knight Frank.
Knight Frank’s latest Logic Report reveals that the industrial occupier market across the West Yorkshire region continued to perform well in the second half of 2016 and into 2017.
Iain McPhail, partner with Knight Frank’s industrial property team in Leeds, said: “As with other regions, high-quality existing and new build industrial stock in the small and mid-size range remains in short supply. Current market conditions have led to continued pressure on developers to speculatively develop in the region.
“The Pendle Projects/Russells Construction JV has benefitted from building out Phase 2 of their Baildon Business Park scheme, with all units, bar one either sold off plan or under offer. This speculative development reached practical completion in January and consists of a five- unit industrial development with units ranging from 8,500 up to 15,000 sq ft.
“There is a dearth of good quality second hand modern warehouse units in the region, certainly in the 30-60,000 sq ft bracket. In November, Knight Frank negotiated and acquired Unit 3 Stourton Link in Leeds on behalf of client RSL Steeper. The property was formerly occupied by Leeds College of Building and extends to 52,000 sq ft,” he said.
Looking ahead, Mr McPhail said: “Prime rents for mid-sized distribution / warehouse units are now achieving levels of £5.50 – £5.75 per sq ft. We hope to see a further increase in rents in the near future, with quoting rents for units under construction and design and build options now being marketed at levels ranging from £5.95 to £6.25 per sq ft.
“In terms of the larger end market, since Knight Frank secured the recent letting of the 190,000 sq ft Wakefield Eurohub premises to Allied Glass earlier this year, notably there is now no availability of existing Grade’ A’ stock in West Yorkshire of around 200,000 sq ft plus.
“There remains however a small handful of buildings located close to Junction 31 of the M62 ranging from around 110,000 – 142,000 sq ft, including the two new build units, Mount Park Wakefield (133,000 sq ft), and Tri-link 140 (142,000 sq ft) and two modern second hand units Gilcar 31 (111,000 sq ft) and Normanton 108 (108,000 sq ft). Quoting rents range from £4.95 – £5.75 per sq ft.
“The lack of stock in certain areas has also contributed to an increase in design and build requirements, as companies struggle to identify existing units that can accommodate their needs. The development sites within the Leeds city Region Enterprise Zone in the Aire Valley are well placed to accommodate this demand, such as Muse Developments Logic Leeds, which is a 100 acre industrial and manufacturing scheme which can accommodate requirements from 30,000 sq ft to over 500,000 sq ft and has attracted occupiers such as Amazon and John Lewis.
“Given prevailing market conditions we envisage more design and build projects continuing to accommodate requirements that cannot be satisfied by the existing stock on the market and further pressure for developers to commit to speculative development.”