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Swindon Industrial Market Review – February, 2015

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Swindon Industrial Market Review – February, 2015

We have started 2015 in a similar position to the second half of 2014 with dwindling levels of quality stock, hardening rents and slightly reduced incentives. Speculative development is restricted to small unit schemes with only one exception (see below) and this trend is set to continue.  

Total availability remains steady at approximately 1.5 million sqft whilst take up in 2014 was just 550,000 sqft; a 40% reduction on the previous year and the longer term average. However, the number of transactions (70) was in line with the ten year average and the fall is easily explained by the fact the largest transaction was only 55,000 sqft.

With several larger units currently under offer and TNT having a 70,000 sqft facility built at G-Park, 2015 is likely to see the highest level of take up for several years. We also predict that availability will fall significantly, possibly below 1 million sqft, as few new opportunities come to the market. In particular the 100,000 sqft plus size range looks undersupplied with only two facilities likely to be available from the spring. 

This ongoing tightening of the market should continue to increase rents and reduce incentives throughout 2015. Rental levels in Swindon have oscillated around the same level for 25 years and better quality stock could pass highs last seen in the late 1990’s. Refurbished second hand stock will also see rises which should be an incentive for landlords to comprehensively refurbish units when they become vacant.  

At the smaller end of the market, there has been steady and ongoing demand including from purchasers. The first phase of the new Glenmore Business Park has just completed and four units have already sold or let with a further unit under offer. A design and build on part of the remaining land has been agreed while phase two will commence construction in the spring. This will include a unit of c.30, 000 sqft and whilst this could be subdivided, it will be the first speculative development of its size since the late 1990’s.  

Elsewhere in Swindon there will be some other small unit developments taking place later in 2015 including Rockhaven Developments scheme on Kembrey Street and Global Business Parks scheme at South Marston Park. However, any other larger speculative development remains unlikely.  

As previously reported, lack of land supply is becoming an increasing concern. This is not just restricted to delays associated with the bigger strategic sites such as the land south of the A420 where infrastructure deficiencies must be addressed. A Lack of small to medium sites between 1 and 10 acres may also hold back economic growth in Swindon if not addressed. As rents increase and developers wish to speculatively develop larger units of say 10-50,000 sqft they will have very limited options in the town as it currently stands.

 Alastair Andrews

Partner – Industrial Property

Loveday

Alastair@loveday.uk.com

01793 438938

 

 


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