There is just over one year’s worth of industrial space left in the UK, according to Colliers, which says that growth in e-commerce and a renewed demand for British goods put increasing pressure on the country’s industrial stock.
Industrial availability has fallen on average 62 per cent since 2009; with London (down 63 per cent), Yorkshire and Humber (down 70 per cent) and the West Midlands (down 72 per cent) among the worst affected.
Overall, in the first half of 2017 industrial take-up over 100,000 sq ft has slowed 15 per cent year-on-year to 13 million sq ft from record levels in 2016.
Despite the reduction in availability and supply, just 17 million sq ft of industrial space is under construction. Speculative schemes account for just 28 per cent of all UK developments under construction and completions are expected to fall by 60 per cent in 2017, to 3.5 million sq ft.
Industrial supply is likely to fall further due to continued demand from e-tailers, lower levels of speculative starts, as well as the loss of industrial commercial land for other uses such as residential.
“Following the outcome of the European referendum, there has been stronger demand for industrial space from the manufacturing sector due to the weakening value of sterling encouraging a surge in demand for British goods,” said Bo Glowacz, senior research analyst.
“The sector now accounts for 27 per cent of the market, up from 19 per cent in 2016; second only to retailers and wholesalers who account for 33 per cent of demand.”
Len Rosso, head of industrial at Colliers, said: “There are vast opportunities within the sector as it continues to perform well for investors with rising rental values and potential for further growth. The lack of supply can only present opportunities for developers as there’s clearly occupational demand.”