Interview with Craig Semple of CBRE Ltd (Glasgow)
Craig Semple Associate Director of CBRE Ltd (Glasgow) and Industrials and Logistics specialist recently shared his expert opinion on the industrial market of the region with NovaLoca.
How would you rate the overall situation of the commercial property market, particularly Industrial, in Scotland/Glasgow at the moment?
The take-up of industrial accommodation has been strong in the Central Belt during the past 24 months and we expect this to continue in 2020. There’s an improved level of confidence from investors, developers and landlords due to the performance of the market and the rental growth that has been achieved during the last couple of years.
The industrial market has split into four main bands of demand. Below 10,000 sq. ft., the market remains the most active with continuing levels of take-up and multi let industrial estates approaching 100% occupancy in strong industrial locations.
From 10,000 sq. ft. to 30,000 sq. ft. there is lower demand but a number of encouraging transactions, particularly in areas like Rutherglen, Hillington, Cambuslang and Glasgow (prime).
Above 30,000 sq. ft. the market has shown signs of improvement with several active requirements unsatisfied due to product shortages. The lack of supply in Glasgow, as well as improvements to road connectivity, has benefited surrounding towns, in particular East Kilbride, Cumbernauld and Ayrshire.
The fourth band of demand is the pre-let market. Generally, Glasgow and the central belt will achieve one pre-let every five years, however during 2019, the market announced 3 significant pre-lets all above 50,000 sq ft whilst several major supermarkets such as Aldi, Lidl and Farmfoods have also substantially extended or committed to new bespoke warehouse facilities. Developers that have speculatively built units have also benefitted from product shortages and in many cases have been able to secure an occupier / tenant prior to practical completion – particularly east of Glasgow.
There is a shortage of good quality stock available in the market to cope with the anticipated demand over the next couple of years and we expect several significant pre-lets to be announced this year which should continue to bolster market confidence and attract inward investment despite political uncertainty.
Have you seen any trends emerging at the start of the new decade?
We are only two months into the new decade and it’s difficult to report any ‘trends’ at this stage. What we can say is there is strong appetite for good quality modern and bespoke industrial buildings, therefore we expect to see more industrial construction this decade than we saw last decade.
The trends we anticipate from occupiers this decade are:
- Increased appetite for owner occupation
- Warehouses with increased yard requirements
- Environmental Awareness
- Sustainable buildings
- Renewable Energy solutions
We believe large scale commercial occupiers will steadily move towards electric vans and transport. The UK Government recently announced it has brought forward the ban of petrol and diesel cars by five years from 2040 to 2035. This will result in new developments providing sufficient electricity and renewable energy to cope with the increased power demand.
Occupiers are already implementing electric delivery vehicles and we expect this trend to continue over the next 10 years which will impact on future warehouse requirements.
For CBRE properties listed with NovaLoca visit here.
For a report by Scott Cameron of Whyte and Barrie read here