UK warehouse occupiers cautioned to plan ahead
December 2nd 2009 Warehouse occupiers have been warned the collapse of the new-build warehouse market will push prices up in the medium term, especially for good quality, modern units. The finding comes as occupiers are enjoying a strong negotiating hand with landlords as demand has slumped due to the recession.
Sally Bruer (pictured), partner at property consultant Gerald Eve said: "We anticipate the availability of new and modern quality warehouse space to contract in three to five years. As supply contracts the ability of occupiers to negotiate strong deals should diminish.
"Occupiers are currently enjoying a very good period, with lots of competition and discounts from landlords to customers. However, this is something they should bear in mind now, they may want to tie up deals while the climate is favourable."
According to the findings released by Gerald Eve in its Prime Logistics report, only 2.8 million sq ft of space was completed in the first half of 2009. This contrasts sharply with a recent peak of more than 30 million sq ft in 2006. Take up of warehouse space has also declined but at a much slower pace, with the four quarter total to Q2 2009 – at 30.1 million sq ft – only just below the ten year average, the first time it has fallen below the average since mid-2007.
As well as the recession, the rescinding of empty rates relief has cooled the speculative market. Breur added that Gerald Eve did not expect a change of government at the next election to result in a change of position over empty rates.
Bruer also identified sustainability as a key trend, with the marketing of sustainable measures changing considerably due to the recesison.
"We’re no longer seeing sustainability marketed as green measures per se, but rather in terms of cost cutting, which appeals to occupiers.We’re also seeing a clear emphasis on measures that have demonstrable cost cutting value.” More articles from Handling & Storage Solutions: | 
