A total of 2.29m sq ft of new build accommodation remains available in the North West, according to CB Richard Ellis' industrial market update 2011.
CBRE's report said the figure could reduce to 1.5m sq ft by H2 2011 with more design and build transactions being agreed towards the end of the year and into 2012.
CBRE said the lack of good quality stock in prime locations, restrictions on new speculative development and reasonable levels of occupier demand are expected to contribute to an increase in take-up of many of the remaining new and existing prime good quality distribution during the course of 2011.
Jonathan Thorne, director in the industrial team at CBRE, said: "As supply diminishes over the next 12 months, we expect rents for larger distribution units to stabilise and incentives to decrease. With the shortage of existing facilities we expect to see more design and build transactions being agreed and this should hopefully lead to some rental growth and attractive funding/investment opportunities given the terms required to make such deals viable."
The report said take-up in the large warehouse/industrial market in the North West during 2010 was one of the highest of the past nine years, amounting to over 4m sq ft and exceeding the 2009 figure by 25%.
CBRE said the increase in activity was due to landlords showing a continued flexible approach to lease terms, including shorter lease periods, reduced rents and increased incentives. Landlords have also been more willing to dispose of larger facilities at vastly reduced market levels, sometimes below build costs.
Robin Jones, senior surveyor in the capital markets team at CBRE, added: "£265m was invested in the North West industrial market during 2010 – a 20% increase on total investment in the sector from 2009. The majority of activity is concentrated in the single let market as investors continue to acquire well located stock occupied by strong covenants. There is, however, a significant lack of prime and good secondary multi let stock despite continued demand from investors."
Meanwhile, the North West industrial team at CB Richard Ellis has seen a number of promotions and new appointments in recent weeks, further strengthening the firm's offering in the region. Jonathan Thorne has been promoted to director, and will now head up CBRE's North West industrial team, while Darren Hill has stepped up as a full time surveyor concentrating on industrial.
Joining Thorne, Hill and associate director Paul Cook is Stephen Capper, who has recently joined CBRE from Drivas Jonas Deloitte as senior surveyor.