Yorkshire Counties
South Yorkshire and East Derbyshire – responding well to occupier demand!
Rebecca Schofield, partner at Knight Frank in Sheffield an d
h ead of Rebecca Schofield
Yorkshire Industrial and Logistics, looks at the popular South Yorkshire and North East Derbyshire region’s performance and outlook. Improving sentiment coupled with a supply of immediately availa-
ble buildings has positioned South Yorkshire and North East Derbyshire well to respond to occupier demand in 2025.
Take-up across the regions totaled 986,000 sq ft for 2024 (all quality units 50,000 sq ft plus) behind the long term average as a result of a challenging year across the market.
2024 take-up was characterised by units sub 200,000 sq ft across 9 transactions of which manufacturing accounted for 24per cent of
take-up, distribution accounted for 27 per cent and retail 18 per cent.
Transactions included BAE Systems acquir- ing 96,000 sq ft at Sheffield’s Bessemer Park, marking the third letting at Phase 2 of the development, following earlier lettings to ITM and Dormole.
Only one 294,000 sq ft unit remains availa- ble at the park which has been delivered to the UK Green Building Council’s Carbon Net Zero standard. In addition, Octopus Energy acquired 91,923 sq ft at Catalyst in Sheffield, where a new headline rent in Sheffield was achieved at £9.00 per sq ft.
Prime rents in Sheffield, where supply is now tightest, rose by 9.8 per cent annually on 50,000 sq ft plus units to £9 psf, with prime rents in Doncaster and Rotherham standing at £7.75 psf. Further growth is expected.
The regions saw an increase in supply during 2024, following a number of new develop- ments reaching completion and a number of second-hand buildings returning to the
market. The vacancy rate rose to 12.7 per cent as at the end of Q4. Despite these fig- ures indicating a healthy level of supply, some parts of the region face challenges. Sheffield is experiencing a shortage of new stock, with just two new-build units available.
The South Yorkshire and North East Derbyshire region is well-positioned to cap- italise on occupier requirements for immedi- ate space, and we are seeing good demand in the market from both the B8 and B2 sectors.
Looking at the year ahead we have seen an uptick in enquiry levels and viewing activities across the market.
Sentiment and occupier confidence has improved and we are seeing requirements move forward to transactions. We have already seen a number of transactions com- plete in Q1 and there are a number of build- ings under offer which we expect to move for- ward to swift completion. Occupier take-up for the region is expected to be much stronger this with Q1 figures already almost surpassing the take-up for the whole of 2024.
North and North-East Lincolnshire commercial property market overview
It is pleasing to report that over the last 12 months, the commercial property market within North and North East Lincolnshire has continued to perform well. In particular a number of notable transactions have been concluded, and we are currently involved with a series of large industrial development pro- jects which are ongoing involving energy and waste. Also, we have a number of new indus- trial development schemes proposed, which once completed will serve to provide much- needed industrial accommodation across the region, given the fact that industrial occupa- tion levels are presently in the order of 98%. Development, does however, remain difficult owing to viability issues currently.
PPH Commercial has recently been instructed on a number of major development sites, including 227 acres of land at Stallingborough, on behalf of Associated British Ports, 12 acres of land being developed by Lindum Developments at Doncaster Road in Scunthorpe and the former Lincolnshire Lakes site, Scunthorpe which is to be developed by Hargreaves Land and rebranded as Forge Point, which comprises an industrial/employ- ment development site of 76.8 acres approx. adjacent to the A1077 leading to the M181.
Demand remains strong for industrial prem- ises, both freehold and to let, across all size
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ranges throughout the region. This is one of the critical reasons that developers are now looking at the North and North East Lincolnshire area for development to meet pent up demand.
Demand for office accommodation has also improved over the last 12 months and in particular there has been significant take up of out of town office accommodation in North Lincolnshire, with Queensway Court and Berkeley Business Centre, Scunthorpe all being fully occupied. In North East Lincolnshire, demand for such accommo- dation has improved with Acorn Business Park, Grimsby also now fully occupied and there is good occupation levels at Genesis Business Park, Europarc, Grimsby and Hewitts Business Park at Humberston. Demand for town centre office space remains lim- ited, where accommodation lacks car park- ing, is older and if open plan layouts can’t be provided.
The retail market has improved in terms of secondary locations, we have seen a number of instances where freehold retail premises have achieved good levels of interest and we have had to call for ‘Best and Final’ offers, however, the town centres do still remain dif- ficult with a high degree of vacant accommo- dation. Rents have dropped to try to stimulate
occupation. Demand for outer town retail accommodation remains good, and occupa- tional levels remain high.
In terms of large development sites, along the Humber bank, we are seeing significant interest for a range of energy, waste and data centre related uses.
At this juncture, It is too early to comment on any of these transactions specifically but I am confident that a number of which will be concluded in the near future and will be noteworthy of further media coverage which will follow as these are all significant scaled transactions.
Looking forward, it is hoped that the remain- der of 2025 will continue in a similar vein as it has done for the first quarter. Despite economic uncertainty following the Autumn Budget, interest rates have reduced, yet there has been increases in energy prices, national insurance contributions and the minimum wage increase. The region benefits from a solid industrial backbone and benefits sig- nificantly from the South Humber Ports of Immingham and Grimsby, together with those on the north bank being Hull and Goole, which are increasing in popularity, in terms of methods of transportation throughout Europe and the rest of the world.
COMMERCIAL PROPERTY MONTHLY 2025
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