Up to 2 million sq ft of speculative development could be built this year said Cameron Mitchell of Jones LangLaSalle at the company’s annual Property Predictions event in London.
With one exception – a development by MUSE at the Eurocentral site in Mossend Scotland – there has been no new speculative development involving large (100,000 sq ft +) logistics development since 2008. As a result the supply of speculative space has fallen by more than 70 per cent from a pre-recession peak of 28.8 million sq ft in 117 units to around 8.1 million sq ft in 36 units currently.
At present there is some 24 million sq ft in active requirements many of which cannot be satisfied.
Mr Mitchell is not predicting a sweeping return to speculative development rather a selective return by developers in absolutely prime markets only such as The Golden Triangle in the Midlands, London and the wider South East.
While this is good news the company also sees an increase in rent levels although confined to a small number of core markets, such as West London, parts of the Thames Valley ‘Western Corridor’ and certain prime regional markets.