A lack of grade A industrial space across Yorkshire has led to a slow-down in the market and a fall in investment in the sector, according to Lambert Smith Hampton.
LSH says the total investment in industrial property fell from £85 million in the first half of 2012 to just under £70 million for the same period this year.
The property consultants highlight a number of leading deals, including the acquisition of The Range at Nimbus Park in Doncaster by Tritax, which, at £37 million, accounted for more than half the cash invested in Yorkshire in the first quarter.
It also mentions the £11.5 million purchase of Maplin Distribution Warehouse at Brookfields Park by a UK investor.
LSH says there is a good supply of large, grade A warehouse and logistics facilities over 100,000 sq ft in the region, but less than a month’s supply left of traditionally more sought-after smaller sheds.
The director and regional head of LSH’s northern industrial and logistics agency, Rob Whatmuff, said: “We have reached a critical tipping point where we need new developments on site to ensure that SME and mid-box occupier demand can be met. There are several large-scale distribution units on the market, but we have little to offer those occupiers seeking any units less than 100,000 sq ft. It’s a dangerous situation as businesses that want to expand or move into Yorkshire will have no choice but to look elsewhere for existing buildings.”
Mr Whatmuff says strong demand for speculative development, coupled with the Government’s decision to exempt new commercial property that remains empty from paying rates for the first 18 months, should encourage new development.
“We would hope to see new facilities springing up in hotspots such as Leeds, Sheffield and Wakefield in the next 12 to 18 months,” he added.