Strong demand reduces availability of industrial and warehouse units
PUBLISHED: 09:27 28 September 2017 | UPDATED: 09:27 28 September 2017
The industrial and warehouse market in Norwich, and elsewhere in Norfolk, has seen strong demand in the last two years with the availability of larger buildings halving over an 18-month period.
Roche Chartered Surveyors monitor the availability of buildings over 10,000sq ft in the Norwich area. In September 2015, total availability of such buildings stood at a peak of 393,000sq ft. By April 2017, the figure had dropped to below 152,000sq ft.
The reduced availability during this time has restricted take-up and therefore a modest increase in availability in the last six months, largely a result of re-structuring by a small number of occupiers, has helped to meet market demand.
The underlying trend of reduced availability is causing upward pressure on capital and rental values which will hasten the day when new speculative development is likely to occur. Recent new developments have been restricted to owner-occupiers and starter units.
Refurbishment of old sites in established locations meet a ready demand, a prime example being Unit 2 at Burton Road Business Park off Fifers Lane, Norwich, which was virtually re-built by Harber Properties to create a high-specification 16,760 sq ft that was let to ERIKS, a national engineering services business who relocated from Union Park. This was the largest letting in the first half of the year.
Demand for smaller units of less than 10,000 sq ft has been equally strong with few available units on the principal estates at Bowthorpe, White Lodge, Sweetbriar and Hellesdon Hall. With most of Norwich’s industrial estates being owned by pension funds and other landlords, there is a pent-up demand for freehold units and buildings. Demand for property on the north side of the city has been boosted by the prospects of better accessibility with the imminent opening of the Northern Distributor Road.
With little new development in recent years, availability rates are also low in the main centres throughout the county including King’s Lynn, Great Yarmouth and Dereham, with few freehold opportunities in most of the market towns.
The sustained improvement in the market over the last two years bodes well but the availability of sufficient immediate choice for businesses wanting to expand will become a concern if new development does not increase the supply. The provision of new buildings is essential and it must be hoped that economic returns and other factors enable developers to respond accordingly.