PROPERTY experts have reported a slowdown in the take-up of industrial premises in Yorkshire.
The latest survey by agency DTZ showed that take-up in the region reached just 40% of the quarterly average during the first quarter of 2012.
Nationally, take-up fell by 1.9m sq ft to 5.9m sq ft during the final three months of 2011.
The new figure is the lowest quarterly level since the second quarter of 2009 and almost 20% below the quarterly average. A fall in the number of transactions from 60 to 49 largely accounted for the reduction.
Despite the fall in take-up, the lack of any sizeable space coming to the market resulted in availability falling by 1.5% to 165m sq ft – the sixth successive quarterly fall. Grade A stock fell by a massive 12.5% to 22m sq ft as prime take-up remained strong.
Mike Baugh, director for DTZ’s industrial agency in West Yorkshire, said: “The amount of space transacted in the last quarter has reduced compared with the previous quarter, which saw slightly above average take-up.
“However, the decreasing stock of Grade A buildings will have impacted on the take-up figures. Manufacturing companies continue to account for a significant proportion of take-up, even if reduced on a quarter by quarter basis.”
Take-up in Yorkshire reached 360,000 sq ft, just 40% of the quarterly average. Take-up was boosted by the 265,000 sq ft letting of Hurricane at Doncaster to Next.
The region boasts the second largest amount of prime space in the UK after London, the South East and Eastern England, at 3.9m sq ft. However, it is unevenly spread. The outlook for take-up is good with several requirements from manufacturers and distributors for space in excess of 600,000sq ft.
Mr Baugh said: “Although performance in the last quarter was disappointing, there are a number of companies in the market progressing acquisitions and we are hopeful that Q2 will show an improvement in take-up.
“There are, in certain size ranges, pockets of the region where supply is starting dry up and occupiers are having to consider design and build. As take-up continues against a lack of any speculative construction, we see interest in the design and build market increasing.”
The rental outlook for the quarter was similar to Q4 2011 with levels remaining flat and agents reporting a hardening of incentives on smaller prime units. Rental growth forecasts have been revised down, largely due to downward revisions to the economic forecasts.
Following a strong fourth quarter in 2011, investment activity across the UK fell by more than 60% to £620m in the first three months of this year.
Martin Davis, head of UK research at DTZ, said: “Looking ahead, there is only 800,000 sq ft of speculative industrial development scheduled to complete in the next 12 months, which coupled with existing prime availability, means most regions only have one to two years of prime supply left at average take-up levels.”