Industrial take-up in the Western Corridor soared by 20% on the 10-year average in H1, according to new research from Jones Lang LaSalle.
High occupier demand has left availability of Grade A stock in the region at its lowest level since mid-2009, according to JLL’s annual Western Corridor Industrial and Warehouse report.
Availability was down 14% from last year, with speculative building standing at 300,000 sq ft in the 12 months to mid-2013.
The research also found that investor sentiment was strengthening, with yields moving in by around 50-75 basis points.
Yields in west London moved in from 5.5% to 6%, while in the Thames valley they stood at 5.75% compared with 6% a year ago.
The report also highlighted the potential effects of two major infrastructure decisions – the third runway at Heathrow and HS2.
Jones Lang LaSalle said the firm expected London and the South East to “lead the way” as the economy gathers momentum.
“To capitalise, developers and investors should consider speculative development as Grade A supply continues to dwindle,” said the firm
JLL industrial and logistics director Andy Harding said the potential infrastructure upgrades would “increase pressure on an already diminishing supply”.
“The robust demand for occupational and investment stock means that the Western Corridor will lead the UK’s industrial property market recovery,” said Harding.
chris.berkin@estatesgazette.com
