Average prime and secondary rents in the Midlands’ logistics and industrial sector have remained static in the past 12 months.
According to Colliers International’s latest Logistics and Industrial Big Sheds Rent Map 2011, of the 12 locations in the East and West Midlands which came under the spotlight, rents have not moved in any of them.
Five years ago, however, prime rents for 200,000 sq?ft plus sheds ranged from £4.50 to £6.00 per sq?ft, while the range now is £4.25 to £5.00 per sq?ft.
Secondary space has also seen average rentals decline over five years. Top rents in 2006 were £4.75 per sq?ft, but have fallen to £4.00 per sq?ft in 2011.
Colliers’ Rent Map also revealed land values across the Midlands. Lot sizes of 10 acres or more averaged £484 per acre in the West Midlands and £531 per acre in the East Midlands in 2006. These values have now fallen to £221 and £200 respectively.
Despite the stability of rents and land prices over the past two years, Colliers believes there to be a current upward trend.
Simon Norton, joint head of logistics and industrial in the agent’s Birmingham office, said: “Take-up of grade-A space in the past three years has started to eat into existing supply, resulting in signs of severe stock shortage.
“The lack of speculative development, due to the scarcity of funding and the general downturn in confidence resulting from the recession, has exacerbated the situation. For the first time in years, landlords are beginning to feel they may just have the upper hand and are holding out for better rental terms.”
He added: “As far as land values are concerned, developers and speculators have seen the way the market is going, so demand is improving. As a result, land prices will soon start to escalate.”
lisa.pilkington@estatesgazette.com
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