As we look ahead to 2019 and what the property market might bring for occupiers in the Midlands, our Regional Managing Partner on the ground there, Carole Taylor, takes a look at what to expect in the industrial and office market.
Speaking of demand for industrial space, Carole said:
“There remains very strong demand in the industrial market right across the Midlands, from the big centres like Birmingham and Coventry, through to the wider Black Country too. But supply still isn’t meeting this demand and we are seeing the effects of this in rising rents which have spiked over the last 12-15 months.
“Rents in Coventry and Warwickshire have often been higher than those in Birmingham itself, which is unprecedented, and for smaller industrial stock of 2,000-3,000 sq. ft. in particular, rents have leapt up into double figures for the first time.
“Unless we start to see some supply to stem the flow of demand, we can expect to see this rise continue well into 2019.
“There are few new builds in the pipeline in the Birmingham area, but we’re seeing more projects start to come out of the ground in Coventry and Warwickshire, such as Antsy Park and Wellesbourne, with schemes coming forward in the Lichfield to Derby corridor too, including the next phase at Burton Gateway Industrial and Logistics site, as well as the 80 acre Burnaston Cross site which is currently going through the planning process .
“For businesses seeking the best possible rents, it’s worth looking to the A38 corridor where rents remain around the £6-7 per sq. m, whereas in Birmingham and to the south of the region, you can expect to pay up to £8 per sq. m for new schemes.”
When it comes to the office market outlook, there have been a number of fantastic schemes come forward in Birmingham, but there is a lack of wider supply to meet demand, as Carole discusses.
“Schemes in Birmingham such as the Paradises and Snowhills of the world are now attracting rents of up to £35 per sq. ft., but there remains a shortage of good quality office space in the Wolverhampton, Walsall and wider Black Country areas.
“To justify the build of new office stock and for them to work in the long term, there need to be businesses that can afford the rents to support them, and this is unfortunately lacking in these areas.
“We also continue to see strong demand for office space into Warwickshire, particularly around Warwick/Leamington Spa due to its location around the M40 and M42, which we expect to continue into 2019 and beyond.
“However, there remains a shortage of supply here too and rents are creeping up as a result – not only in the newer stock but also in medium quality, older quality stock, where top rents are going over the £20 per sq. ft. mark.”
If your business is looking for the next strategic office move in or around the Midlands area, our team of expert property advisers can help you to plan for, source and secure the right opportunity – fit for your existing and future needs.
To an informal chat with one of our advisers about your requirements, don’t hesitate to get in touch.