LEASING activity in the Yorkshire logistics property market has been virtually stagnant since the start of this year – with greatly reduced occupier take-up, according to new research.
The study by property agency Jones Lang LaSalle blamed weakening consumer confidence for the decline in take-up of depots and distribution centres – affecting demand for space from retailers.
Richard Harris, director for Jones Lang LaSalle’s national industrial and logistics team, said: “This reduction in demand is causing lengthening empty periods in the available stock and increasing holding costs for landlords.
“The increase in holding costs, because of empty building rates, security, maintenance and insurance, means that landlords are willing to offer greater rental incentives to attract occupiers.
“In the few deals to have been completed since January on new and secondary logistics properties, headline rents have generally held up and in agreeing terms in this way, landlords can protect their investment value and tenants can maximise any incentive package.”
The study, which looked at the market for units of 100,000sq ft and above, said Yorkshire accounted for 4% of UK top-grade floorspace take-up and 17% of availability during the third quarter of the year.
Mr Harris said that the level of supply in Yorkshire and Humber was sufficient to meet short-term demand and that it was likely there would be no speculative development for the foreseeable future until logistics space requirements increase.
He said: “While the overall number of retailers active in the market has fallen, a number of leading food and non-food retailers have ‘live’ requirements for distribution centres in the UK which could come to the North.
“These reflect a range of factors including store expansion, growth in internet sales and the re-design of distribution networks.”