Rents on new Midlands warehouse developments will top £6.50 a sq ft, agents are predicting.
Rents at this level would surpass pre-recession heights, according to Colliers International’s latest research.
Already prices are creeping up. Syncreon’s agreement to lease the 127,500 sq ft speculative Prologis Park Midpoint is believed to have been agreed at a rent of £6.35 per sq ft, setting a new headline rent for the Midlands.
Further deals are rumoured at between £6.35 and £6.50 per sq ft. This is a significant increase when compared to the £5.75 per sq ft quoted before the recession in 2008.
Simon Norton, Director, Industrial & Logistics, Colliers International in Birmingham, says shortage of good new warehouses is pushing rents up: “The supply of existing buildings and indeed 'oven-ready' distribution sites in the midlands is in short supply. In fact, recent statistics indicate there are only approximately three to six months’ supply of existing good quality distribution warehousing of over 100,000 sq ft left in the Midlands, and no units at all readily available of over 250,000 sq ft.”
Colliers’ research went on to show that on average, rents across the UK as a whole have jumped considerably between June 2014 and July 2015 - by 18% for big sheds and 15% for smaller sheds.