A Looming Shortage of Property For Industrial Occupiers
4th October, 2012.
A Looming Shortage of Property For Industrial Occupiers.
By Neil Salde, Director, Commercial Agency.
It may sound an unlikely headline but we are fast approaching a situation in the Midlands property market where there is a shortage of available industrial property.
The shortage is such that there is barely a new 100,000 sq ft unit available in and around Birmingham, Wolverhampton and Coventry. Compare that situation to say 3 years ago when there were possibly 20 plus buildings available.
There has been building take-up certainly and the pace of take-up has quickened over the last few years. The issue is, that barely any property has been built. Aside from owner occupiers building to suit for their own occupation, the most notable being JLR’s new Plant at i54 in South Staffordshire. There has been barely any (and possibly zero) speculative development in the last few years. Worryingly there also appears to be nothing in the pipeline for speculative development – a symptom in part, of an ongoing credit crisis. If occupiers need manufacturing space it seems they are going to have to take a design and build, as opposed to speculative solution. The market could get busier and what is driving this is, in part, is highlighted by a report that has just been published.
The headline reads:- ‘Resurgent Car Industry Drives Into Golden Era’.
The report says, “Britain’s resurgent car manufacturing industry will enjoy strong growth over the next few years that will see it producing 2.2m cars annually by 2016.”
Research for the Society of Motor Manufacturers and Traders predicts auto makers in the UK will see growth of 9pc a year. The report, produced by KPMG and launched to coincide with the Paris Motor Show, added that the market for car makers’ suppliers would almost double from £11bn this year to £21.5bn in 2016.
This impacts considerably on the commercial property industry in how we adapt, react and provide the building solutions that cater to this demand that is giving so much potential for growth in the sector which will be welcomed as we become more reliant on manufacturing and exports to drive the economy.
Britain sells a greater proportion of cars to high-growth non-EU countries than any other European nation, at 55pc, which offers us more protection from the eurozone crisis than some of the UK’s rivals according to KPMG. This trend is expected to continue, with strong demand for premium cars among the growing middle classes in developing economies. The report cited Jaguar Land Rover, BMW, Nissan and Toyota among the companies which have invested heavily in Britain in recent times.
With so many manufacturers based around the Midlands our property markets will need to respond to this growing demand.
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