Prime rents on the rise

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The lack of grade A space in the industrial and distribution market has become so acute across the UK that rents for prime space have risen – according Lambert Smith Hampton’s latest National Industrial and Distribution Market 2012 research.

Prime rents increased in 27 per cent of the locations, with a further 39 per cent of the locations seeing prime rents stabilise.

Steve Williams, Director of Industrial and Logistics, said: “Our findings show that prime rental values are on the increase in strategic locations where there is little or no grade A space available.

“This market imbalance will cause the market to tip in favour of landlords who own quality space, allowing them to harden their stance on rent and incentives. Countering this, our research showed that rents for secondary space continued to fall by an average of 1.85 per cent across the UK.”

Grade A availability currently stands at the lowest it has been for five years. In most size bands this represents 12 months of supply, with the most acute shortage in the distribution warehouse sector, where supply is down to 6 months based on 2011 take-up levels.

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