By Peter Castle
Managing Director
Hadland Chartered Surveyors
THE industrial property market, which underpins Northamptonshire’s position as one of the leading logistics hubs in the UK, continues to grow stronger as outlined in our new report prepared in conjunction with property information analyst CoStar.
Our data shows that robust occupier demand and a relative lack of new supply continued to drive the industrial market. That dearth of available space is likely to change very soon, however, with significant development either already under way or planned for the county in the near future.
The Industrial Market Report shows that positive net absorption – indicating that more commercial space was being leased than was made available on the market – currently stands at 769,000 square feet. This shows a relative decrease in the supply of commercial space available to the market, borne out by a vacancy rate of 2.6 per cent, well down on the peak of 2010.
Although almost 3.5m square feet of industrial space has been delivered since the beginning of 2016, robust demand has enabled the vacancy rate to remain at a low level.
Increasingly, investors have taken note of the sector’s strengths, and increased demand has led to a sharp fall in yield, with average yields falling to 6.5 per cent by the end of 2017, drop of over 400 basis points since 2012.
Development activity has ramped up recently. While new deliveries were thin on the ground between 2012 and 2014, averaging less than 250,000 square feet per year, during the three subsequent years almost six million square feet hit the market. As of May 2018 there is around 3.5 million square feet under construction in Northamptonshire – more than any other UK market – which could cause vacancies to rise in coming years.
A number of new schemes are due to deliver before the end of this year, providing new operational options for online retailers and 3PL operators.
As a result of all this activity, average asking rents have grown strongly, moving on by a further eight per cent in the 12 months to July 2018, with only Milton Keynes, Shropshire, Staffordshire and Peterborough outperforming Northampton.
The Industrial Market Report shows a positive outlook for the county and suggests the recovery is likely to continue in a healthy fashion for some time.
To find out more about the report, contact Hadland Chartered Surveyors on 01604 639657 or visit the website www.hadlands.co.uk