It seems as if the prediction that speculative development would dry up if the government applies 100 per cent rates for empty industrial buildings is already coming true.
King Sturge’s latest Industrial Floorspace Today survey states that the level of speculative development under construction across Great Britain at January 2008 decreased some 14.1 per cent since the company’s previous survey, falling to 13,361,025 sq ft across 113 schemes.
Indeed, in Lambert Smith Hampton’s National Industrial and Distribution Report 2008, the property adviser warned: “The abolition of empty rates relief could lead to less speculative development. Indeed there is already evidence of this, with Evans Easyspace announcing it would postpone two new developments proposed for Merseyside and Staffordshire. At XL in Skelmersdale, Gazeley is now offering design and build options [where once it had thought it would develop speculatively].”
Despite this, however, according to King Sturge’s survey there is more available space than ever before standing at 230,457,680 sq ft as of December 2007.
This is an increase of 0.8 per cent since June 2007 and represents the fifth consecutive six-month period of upward movement in floor space. The highest percentage increases were recorded in Wales (4.1 per cent), the North West (2.9 per cent) and Yorkshire & Humberside (2.3 per cent). Availability in the West Midlands rose by two per cent, Scotland by 1.9 per cent and the South West, 1.4 per cent.
Of this the availability in new buildings also continues to rise with a 7.4 per cent increase since June resulting in 30,095,720 sq ft being available at December 2007. The rise of 2,076,680 sq ft since June 2007 means new floor space accounted for 13.1 per cent of total availability at December 2007.
The availability of floor space in buildings over 100,000 sq ft also showed an increase. A rise of 6.5 per cent or 4,078,040 sq ft since June, made the total floor space available in these buildings rise to 67,045,560 sq ft or 29.1 per cent of the overall available floor space.