Midlands’ mid-box rents will breach the £7 a sq ft barrier in spring 2018, Birmingham surveyors are predicting.
Specialist agency KWB say that rentals of Midlands’ medium size industrial sheds (35,000 to 50,000 sq ft) will hit £7 very soon thanks to increasing demand and falling supply of units.
Kenny Allan, Director of Industrial Agency at KWB said: “Leasehold prices of these medium size industrial and manufacturing units have been climbing steadily from around £4.95psf to £6.25 - £6.50 psf over the past three years. However, except in one or two very well established, key locations, it is still largely uneconomic for developers to build new units of less than 100,000 sq ft.”
“Capital values of medium size units have increased, but bank valuations of freeholds are lagging behind owners’ and the market’s expectations, which means purchasers generally cannot get affordable mortgages, and cash buyers of sheds or more than 35,000 sq ft are very rare.
“So for businesses looking for new premises to expand into, leasehold is really the only prospect, and the on-going shortage will continue to push prices towards £7psf and above. However, for businesses requiring new or additional space, finding a suitable vacant unit remains the main problem in the present market.”
