Jones Lang LaSalle notes increase in industrial property take-up
Take-up of industrial commercial property rose during the first three months of this year, a report indicates.
The popularity of industrial real estate surged as 2010 got underway, according to new research.
In figures released by Jones Lang LaSalle, the total take-up of this type of commercial property during the first three months of 2010 was revealed to have risen by 70 per cent from the same period of time in 2009.
With such an asset class accounting for 4.3 million sq ft of developments by the end of March, the figure is also shown to be an improvement of around 40 per cent from activity recorded between October and December last year.
The rise in take-up of this kind of commercial development was especially prevalent in the Midlands - the region accounted for almost 60 per cent of activity in the quarter, while Birmingham was the only major prime distribution warehousing market were headline rental rates have remained stable for the past 12 months.
Such growth has been driven by increases in industrial production, while retail companies adjust their distribution network in an effort to plan ahead for changing trends in the market.
And as companies are keen to make supply chain efficiency improvements and increase the sustainability of their operations, Jones Lang LaSalle claims that modern, good-quality developments located close to large cities or strong transport locations will be most sought-after.
Cameron Mitchell, joint head of the firm's national industrial and logistics team, states: "With a lack of speculative development activity, the volume of vacant large scale modern distribution floor-space continued to edge down in Q1 2010."
However, vacancies in older second-hand units are "relatively high across the UK", as such properties no longer meet the requirements of modern occupiers.
Meanwhile, a study by CB Richard Ellis noted that investment in industrial property in the European market surged by some 52 per cent between July and December 2010, with the UK accounting for around half of all deals done.
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