Confidence high in Glasgow's industrial market
Monday, 18 April 2016
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Bilfinger GVA’s latest Industrial Intelligence report shows that the industrial lettings market in Glasgow is performing well with noticeable growth in demand across all size ranges. Although the recent announcement that empty industrial property in Scotland is now subject to a 90% empty property rates levy has taken the market by surprise, Craig Semple, Bilfinger GVA’s Senior Surveyor and Industrial specialist within Business Space Agency, says the recent changes also offer opportunities.
“The focus in the industrial property sector will now move towards getting rid of poor quality industrial stock and growing the market. Overall, the lack of available quality stock allied with improvements to infrastructure has led to increased take- up in secondary areas such as Cumbernauld, Coatbridge and East Kilbride whilst higher than anticipated rents are being achieved in Cambuslang and Hamilton International due to occupier demand for good quality space in strong strategic locations.
“There are also a number of speculative developments on the way in Bellshill, Hillington and potentially Rutherglen with quoting levels varying from £7 – £8 psf, which is much higher than the £6.50psf we have seen traditionally for speculative development. As a result, confidence in the Scottish industrial market is high.”
The report also shows that strong occupier demand continues across the UK with take-up of modern distribution units over 100,000 sq ft amounting to 21.8 million sq ft during 2015, 5% above the five year average. As in the previous quarter, industrial land values continue to show strong growth, with the average price rising from £528,846 an acre in Q1 2014 to £751,923 in Q1 2016; a 42.2% increase.
Competition for industrial investment opportunities remains strong, with UK institutional investors accounting for around 37% of the value traded in 2015, while overseas buyers made up 18%.