Rentals near landmark £7 per sq ft

RECORD-BREAKING rental levels of £7 per sq ft for prime industrial properties in the Midlands are now in sight, according to a property consultancy.

IM Properties recently achieved £6.75 per sq ft at Birch Coppice in an 80,000 sq ft pre-let to bathroom products supplier HiB.

According Jon Ryan-Gill, who heads Knight Frank’s Midlands industrial agency team, one deal on a 40,000 sq ft unit has already been done off-market at £7 per sq ft and he believes others are in the offing.

He said: “It’s not that long ago that landlords and developers would have been more than happy with rents starting with a six. Now, they are aspiring to seven.”

A number of factors have combined to push up industrial rents, including pressure on stock availability, said Knight Frank.

The agency’s latest research report, Logistics And Industrial Occupier And Investment Market Commentary, shows that prime stock levels in the region have now diminished to around nine months’ supply.

Existing new build stock in excess of 50,000 sq ft is now just shy of two million sq ft across 12 buildings.

Take-up of units larger than 50,000 sq ft reached 6.04 million sq ft in the first half of this year, 34 per cent up on the same period last year and 37 per cent up on the H1 five year average.