Sheffield, UK – Large scale accommodation leased by big brands including Asda, Amazon and ASOS in South Yorkshire contributed to a ‘significant improvement’ in take-up in the second half of 2010, according to research by Knight Frank.
Data from Knight Frank’s new online research publication LOGIC – which provides a regional level assessment of the UK logistics and industrial market – reveals the second half of the year out-performed the first, with more than 1.7million sq ft of large distribution accommodation leased between June and December 2010 alone.
Fashion retailer ASOS’ leasing of 530,000 sq ft of new large distribution accommodation at Crossflow 530 in Barnsley was the largest transaction, with other key developments including Vulcan at First Point in Doncaster letting a 412,000 sq ft facility to retail giant Amazon.
Supermarket Asda took the 260,000 sq ft Hurricane unit at Redhouse Interchange in Doncaster in August last year and in September Scotts Miracle-Gro took up a tenancy at Quattro West Moor Park.
Rebecca Schofield, associate with the Sheffield office of Knight Frank, said: “The latter half of last year was a significant improvement in terms of large scale product and positioned the market well for 2011.”
Headline rents for large scale distribution space remained in the region of £4.25 to £4.50 per sq ft and £4.50 to £5.00 for prime accommodation in the 10,000 to 20,000 sq ft category.
Small to medium sized stock also saw a healthy level of take-up, particularly in traditional industrial locations along the M1 and M18 corridors.
Rotherham transactions included the letting of 27,000 sq ft at Magna 34 to UK Mail while in Sheffield two premises at Thorncliffe Business Park, both measuring 15,000 sq ft, were let to Blowplast Sheffield and Premier Hytemp.
Elsewhere in Sheffield, 50,000 sq ft at Foremost Industrial Estate was let on behalf of TT Group to Ferrari Piston Services as part of the car parts provider’s expansion.
At Parkway One business centre on the Parkway Industrial Estate 27,000 sq ft was let on behalf of John Lewis Pension Fund to large exhibition organiser SDD who join tenants including Aquaculture, the UK’s leading hydroponics suppliers.
Added Rebecca: “We are continuing to see increased demand from occupiers and a reduction in supply into the new year.
“We expect take-up of large-scale distribution space to remain buoyant in this first quarter of 2011 as occupiers continue to take advantage of relatively attractive terms and incentives as a result of landlords competing to fill their voids.
“But terms will begin to harden on good quality small to medium sized stock such as along the M1 corridor where stock is depreciating. With an absence of speculative development, we expect incentives to harden within six to 12 months and we are already starting to see enquiries for prime locations where there is no available stock.”
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