According to King Sturge’s latest UK Industrial and Distribution Floorspace Today survey, speculative development of industrial property in the UK is at its highest level for five years and large distribution facilities account for over 70 per cent of it.
As at December the overall available industrial floorspace stood at 19.198 million sq m. Availability of large properties (units of 10,000 sq m and over) stood at 4.847 million sq m, an increase of 18 per cent in six months.
Michelle Ross of King Sturge said: “Speculative development of “big box sheds” is currently buoyant due to the weight of investment money in industrial property. Twelve months ago, there was just one facility of 50,000 sq m under construction on a speculative basis, compared with six units at January 2006. The development of these very large units is having a significant impact on the overall availability figures.”
Speculative construction is at its highest level in the East Midlands, West Midlands and the North West.
The East Midlands in particular has seen a substantial increase and currently accounts for 26.5 per cent of all industrial development in Great Britain. In addition, East Anglia, the South East (outside Greater London) and the South West have all seen significant rises in construction, continuing the trend of dispersed geographical spread of development, as the pressures of finding suitable land, infrastructure and labour supply force developers to diversify away from traditional industrial hubs.
David Gladman of Gladman Developments said: “We only build speculatively and have built a successful business on this. We know that speculative development is the best way to attract new companies to our developments and new employers to an area. In today’s fast moving business environment, most companies cannot wait for buildings to be specially built for them.
“Distribution companies are increasingly often in the position of having to commence new contracts less than six months after winning them.”