scotland |


INDUSTRIAL UNIT PRE-LETS SET TO INCREASE AROUND GLASGOW


by Gregor Harvie, Industrial Agent, Ryden


20,000 sq ft new build unit at Rutherglen Links available now for immediate occupation


n the west of Scotland, like many areas, the industrial market has strengthened over the last 24 months. Low levels of available supply, a limited development pipeline and good demand has seen available supply eroding on a monthly basis. Rents are rising with the standard rent for new product established at £7.50- 8.50 per sq.ft, with some variation depending on size and specification. This will rise


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further as a pre-let market becomes more common. Speculative


industrial Gregor Harvie


development has historically been at low levels and only now are we seeing


some small scale projects coming forward, but it is a slow reaction.


Recent active projects have been in the form of terraces of smaller units, or stand- alone units, of 20,000 sq.ft to 30,000 sq.ft. Long term patterns suggest any new space will be absorbed quickly and the rate of development is insufficient for a market of this size.


For example at Rutherglen Links, Harris Finance have completed a 20,000 sq.ft unit, a 10,000 sq.ft unit - let to Screwfix and


COMMERCIAL PROPERTY MONTHLY 2018


The demand for industrial investments is strong and the changing political scene in Scotland has encouraged buyers from elsewhere in the UK to re-consider Scotland in an effort to secure better value.


Eurocell - and recently secured a pre-let on a 13,000 sq.ft unit to Trans Canada Turbines at £8.50 per sq.ft. They now have a fourth new build 15,000 sq.ft unit on site due to complete in June 2018 which is attracting interest.


One of the main constraints to increasing the speed of new construction is too few prime sites ready for development. Most opportunities require significant investment in infrastructure and these may not come forward without public sector assistance. That said, we are seeing interest in development land increasing rapidly. It is anticipated that unsatisfied demand will lead to pre-lets and bespoke


builds where a modern distribution facility is required and where secondary poorer properties will not suffice. Demand levels for this are good and would strengthen even further with greater certainty on Brexit.


The demand for industrial investments is strong and the changing political scene in Scotland has encouraged buyers from elsewhere in the UK to re-consider Scotland in an effort to secure better value. Industrial investment sales of sub 4% have been reported in England whereas similar investments in Scotland have been in the order of 6%. The pricing differential is not solely political. There is also a lack of prime Scottish industrial product which is of sufficient scale for the funds and larger scale property company investors, hence active bidders have tended to be second tier and private individuals seeking smaller lot sizes.


New product let to good covenants on longer leases is likely to attract the interest of the funds and see further reductions in Scottish prime yields.


Ryden is the most active industrial agent in Scotland. The industrial team in Glasgow transacted almost 1.25m sq.ft in over 100 deals in 2017.


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