The South East In My View
By Will Merrett-Clarke, Partner at Hollis Hockley LLP ploughed a furrow in this segment of the market are being rewarded.
What is your take on current market conditions across the South East? The industrial market has undoubtedly been through a challenging 12 months, by contrast to the boom era that was witnessed both before, during and after the Covid-19 pandemic. New Development
has been limited, with higher
borrowing and build costs making it unviable for a number of schemes. Those that are coming out of the ground are those which were already committed.
As an unintended consequence, the slow-down in building of new stock has maintained an imbalance between supply and demand which has aided the continued rental growth seen across the South East. This is particularly true of Grade A, new build units, which continue to set new record levels across the Home Counties.
Where are you seeing the most occupier activity? Hollis Hockley are active across the South East, giving us a strong regional view across a range of active sub-markets. Whilst activity inside the M25 has abated somewhat in the past 12 months, we have seen a notable increase in demand in established regional towns in the Home Counties. Occupiers faced with significant uplift at renewal or expiry are taking the decision to move further out in search of better value and quality; and are often finding they can secure both!
Pre-lets are less common at the smaller end of the market, but with limited delivery of multi-let schemes over recent years, those that have
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What are the biggest barriers to transactional activity? Occupational demand has remained strong in the mid-box and multi-let segments of the market, however the past 9-12 months have been characterised by extremely slow decision making. This in turn has led to longer marketing voids although, many Landlords are still achieving strong headline rental levels if they have the patience to wait for an occupier to sign on the dotted line.
A sense of optimism around the economy is beginning to return with interest rates starting to come down and with a new Government now in office, we are hopeful the decision making process for occupiers looking to take new space will speed up.
Where do you see opportunity in the coming 12 months? 2023/2024 has been a quieter year for the Big Box (100k sq ft +) sub- market in the South East with many occupiers taking the opportunity to rationalise their network’s and utilise ‘grey space’ within their existing buildings. The conclusion of this rationalisation coupled with a more positive economic outlook provides cause for optimism
in 2025. contracts Both
international and domestic 3PLs are talking of increased numbers of
being
tendered, and we anticipate this will lead to an increase in take-up across the South-East.
Gus Haslam T: 07885 596877 E:
gus.haslam@knightfrank.com
gl i
tz.proof.s tray
Charlie Perkins T: 07974 366158 E:
charlie.perkins@
knightfrank.com
Will Merrett-Clarke T: 07774 269443 E:
william.merrett-clarke@
hollishockley.co.uk
Freddie Chandler T: 07935 769627 E:
freddie.chandler@
hollishockley.co.uk
01189 680650
www.hollishockley.com
DRAFT
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