JLL: Shed market swings in landlords’ favour
Rents are set to rise in the big box market in the second half of 2014, according to research from JLL.
Occupier demand for industrial and logistics space over 100,000 sq ft fell nationally but held steady in the North West during the first half of 2014 compared to the last six months of 2013.
The report said: "Whilst headline rents remained broadly unchanged over the first half of 2014, net effective rents continued to harden as tenant incentives diminished. With a lack of available prime space the market is becoming more landlord favourable."
Take-up of new-build and speculative space stood at 1.2m sq ft between January and June, which was unchanged from the end of December 2013. Nationally, take up fell by 23% from 8.3m sq ft to 6.4m sq ft, which JLL attributed to the shortage of quality stock.
At the end of last year, the North West offered 19% of the UK's overall supply of prime stock but the figure slipped to 17% at the end of June 2014. The two 170,000 sq ft new build units at Lancashire Business Park are among the few schemes available in the region.
JLL said that rental growth is expected as supply continues to fall and economic growth gathers further momentum and the retail sector's ongoing investment into e-commerce.
Dan Burn, director of industrial and logistics at JLL in Manchester, said: "Demand for big box space has held firm in the region and with supply continuing to dwindle the balance is starting to shift ever closer towards landlords.
"This reflects a wider national picture where availability of new units remains scarce. We're expecting to see spec building return to the North West as developers look to capitalise on these favourable market conditions."
