UK industrial supply tightest on record: King Sturge

Industrial occupier markets remain challenging and supply continues to rise as the UK economy emerges from one of the most difficult periods in decades, according to the latest edition of King Sturge's UK Industrial Floorspace survey.

However, the report says the increase in supply is slowing and there are some tentative signs of improvement in demand for both the industrial and distribution market.

Published twice a year in March and September, the UK Industrial Floorspace survey highlights the latest trends and provides a comprehensive review of availability, speculative development and prime rents for every UK region.

Available industrial floorspace reached 23.9 million m² at the end of 2009 and data from King Sturge shows that the supply pipeline is the tightest it has been since records began in 2001.

Against a fragile economic background, the overall market for industrial and distribution floorspace remains challenging, with demand generally patchy and thin. However, as speculative development continues to fall, the availability of new supply is gradually being eroded and as a result, certain markets are beginning to see a shortage of new, good quality stock.

In some markets the balance, which has favoured the tenant for the past two years, may start to tilt in favour of landlords and developers over the coming year, King Sturge said. In addition the distribution investment market is now very active for well-let properties to good covenants in prime locations, the firm noted.