Design and build activity to rise as large logistics opportunities remain scarce – CBRE
Logistics occupiers are being driven to consider design-and-build opportunities as the supply of buildings shrinks, says CBRE in its H1 2011 UK Industrial Market View. The firm says there are currently only two properties of more than 500,000 sq ft under a single roof – one is at Crackerjack in Corby (528,000 sq ft) and the other is the former Focus DIY warehouse at Tamworth (590,000 sq ft). This means that logistics occupiers with large requirements are expected increasingly to design and build their own space – particularly in core distribution locations.
Paul Farrow, head of industrial agency at CBRE, says logistics deals of 100,000 sq ft to 250,000 sq ft became more dominant during the first half of 2011 as the supply of large, ready-to-occupy buildings diminished. “The erosion of available best-quality stock is expected to continue to have an impact,” he adds.
CBRE says the availability of logistics property continued to fall overall during H1 2011, to 31.2m sq ft, which is a decline of 28% over the past 12 months. Demand remained strong during the first half, with a total of 10.39m sq ft acquired during the period. The firm says aggregate prime rent figures remained stable during H1 2011 but expects to see upward pressure on prime rents during the second half of the year, given the demand/supply conditions.
