Industrial property rents in Worcestershire will continue to grow in the final quarter of 2018 and beyond, driven by high demand and low supply of manufacturing, warehouse and storage space, according to one of the county’s leading commercial property agents.
Andrew Lewis, Head of Agency at Worcestershire commercial property consultancy and Chartered Surveyors GJS Dillon, says that industrial property rents are expected to grow on the back of one of the lowest vacancy rates in the country.
He says: “Industrial vacancies across Worcestershire are 3.5%, less than half the national average, caused by a healthy demand and a lack of new stock over recent years. However, when we break this down the vacancy rate the large industrial market is 5%, but only 0.5% for the smaller (less than 5,000 sq ft) and medium markets (less than 15,000 sq ft).
“As a result we will see growth in both the average rents of £5.10 psf for the big shed market and of £6.75psf in the smaller and medium market.
“There is significant demand for all sizes of industrial property, particularly freehold, where we have seen a 25% increase in enquiries this year, however there are many fewer industrial premises for sale than for rent.
“Developers have reacted to the shortage of industrial property, building 200,000 sq ft of new accommodation in 2018 to date, with a further 637,000 sq ft under construction. However, this is weighted very heavily to larger properties of over 45,000 sq ft.
“Worcestershire LEP, property agents and developers are all aware of the current shortage of smaller units and are working together to see how more can be built. We hope to see the first results of this initiative sometime next year.
“In the meantime there are still industrial units available, but occupiers needs to remain flexible on size and location in order to find the best current fit for their business.”