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Return of the pre-let in South Yorkshire?

Ed Norris

2011 take-up of industrial property across South Yorkshire has been dominated by the highest levels of pre-let activity since 2004, according to our latest research.

Pre-let 10 year cycle

At the start of the 90s, South Yorkshire’s industrial property development cycle was in full swing and pre-let activity was almost non-existent. However, in 2003, take-up rose sharply and pre-let activity increased – accounting for around half of total take-up. This was replicated again in 2004, when the proportion of pre-let space rose to almost 75%.

In stark contrast, there was no pre-let activity between 2005 and 2008, and its contribution has been subdued ever since, accounting for less than 10% in 2010.

Ed Norris, Industrial and Logistics agent in our Sheffield office, said: The lack of development finance, combined with increasing occupier sentiment, has halved the region’s supply of good quality, well-located industrial stock. As a result, pre-lets have increased significantly.

Large deals have reduced quality stock

He added: “Several large deals completed during the second half of 2010, considerably reducing stock. These included Amazon’s 415,000 sq ft at First Point Business Park in Doncaster, ASOS’ 530,000 sq ft at Crossflow 530 in Barnsley and Next’s 122,000 sq ft at West Moor Park in Doncaster.

“These factors have contributed to a significant change in South Yorkshire’s pre-let market. In the three quarters to September 2011, the amount of pre-let industrial space stood at 213,500 sq ft, accounting for 43% of South Yorkshire total ‘big shed’ take-up for the year.”

Three years of big shed supply remaining in South Yorkshire

Ed concluded: “We predict that South Yorkshire has approximately three years’ supply of big sheds remaining. The demand for pre-lets will no doubt increase as larger occupiers, who are frequently drawn to the region, continue to look to re-locate or expand.”

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