Business parks in the North West showed mixed performance in the first half of 2007, with strong take-up contrasted against low rental growth and increasing vacancy rates, according to figures from GVA Grimley.
Figures published in GVA Grimley's Business Parks Review Autumn 2007 show take-up of major business park space in the region was 268,000 sq ft, up from 99,200 sq ft in the preceding six month period and nearly double the six-monthly average over the last five years. The figure represents 8.5% of the UK total take-up of major business park space.
The most active business parks in the region for occupational transactions included Kings Business Park in Merseyside (48,000 sq ft), Daresbury Park, Cheshire (38,000 sq ft) and Birchwood Park, Warrington (31,000 sq ft).
Demand for small to medium sized lettings and sales across the region was also strong, particularly within the established business parks at Daresbury Park, Cheadle Royal, Lingley Mere and Kings Business Park.
Whilst the quantity of business park space under construction in the period fell from 527,000 sq ft to 189,000 sq ft, over 85% of the space currently under construction was speculative including two of the region's largest developments at Central Park, Manchester (43,000 sq ft) and Liverpool International Business Park (40,000 sq ft).
However the report also highlights that of the 974,000 sq ft available business park space in the region 18.3% remained vacant. This figure remains higher than the national average of 13.1% and also represents a continuation of a rising trend in the region over the preceding two years.
The prime out-of-town rental growth in the region remains well below the national average of 2.8% at 0.9% with the leading rents achieved at £19.50/sq ft in Salford and £18.50/sq ft in Chester and South Manchester.
The report indicates that national availability rose by 3% in the six months to June 2007 at 10.5m sq ft, its highest level since GVA Grimley began monitoring the market in 1995. Average business park rents are forecast to increase nationally by 3% in 2007 rising to 4% in 2008 and averaging 3.5% over the next five years.