Rental growth in the regional industrial sector is set to lag behind retail and offices this year, with more than half the UK’s major towns and cities failing to increase rents.
Of 32 industrial markets studied by Lambert Smith Hampton, 18 including Bristol, Croydon, Luton, Leeds and Reading will fail to see any rental growth in the first six months.
LSH predicts strong growth in just four areas: Glasgow, where prime rents are expected to increase 8.3% to £6.50 per sq ft; Guildford, with rents up 7.3% to £11 per sq ft; Swansea, up 6.3% to £4.25 per sq ft; and Enfield, with a 5.9% hike to £9 per sq ft.
Offices will show the largest increase in individual rents, with three markets showing double-digit growth.
Dublin rents will rise 11.4% to £39 per sq ft, while rents in the City and West End will increase 10% to £55 and £82.50 per sq ft respectively. Birmingham will see an 11% rise to £30 per sq ft.
Charles Rowton-Lee, head of office agency, said: “The impetus behind rental growth is recovery in occupier demand and diminishing supply levels.”
Despite challenging retail conditions, rents in 65% of the 29 regions studied are predicted to increase.
Grafton Street in Dublin will top the bill, with a 6.5% increase to £570 per sq ft, followed by Leeds (5.3%), Manchester and Bristol (both 5%).
References: EGi News 30/01/06
