Experts have warned a shortage of modern, good quality industrial buildings in the Midlands is threatening to scupper a manufacturing-led economic revival in the region.
David Binks, industrial partner at the Birmingham office of leading global real estate services firm Cushman & Wakefield, said there was now just a year’s supply of quality industrial buildings across the region, and only nine months worth in the West Midlands.
“It’s a real problem – demand is outstripping supply for good quality industrial buildings and there is going to be a real shortfall between now and 2014,” he said.
“Choice is already very limited – it’s great for landlords, however, as inquiries are being channelled towards the few good buildings which are available.”
Mr Binks said that one of the biggest problems was that manufacturers in the region who were picking up new contracts were struggling to find the premises they needed.
In addition, companies were not leaving themselves enough time to find alternative solutions to their property requirements.
He said that if businesses could not find a suitable existing building, the alternative was to have something built to suit, a process that takes a minimum of 12 months from identifying a suitable site to obtaining planning permission, and construction.
Among those struggling to find the premises they require are the booming automotive and aviation sectors, who are benefiting from the success of companies such as Jaguar Land Rover.
“There is going to be a drag on growth because those companies winning new contracts in these sectors won’t be able to find the buildings to operate from, and that means they won’t be able to generate the revenue for growth, or create jobs in the short term,” he said.
“There is a perception that the property market is on its knees – but times have changed, and that is not the case in the manufacturing and logistics sector.”
Mr Binks said that demand for industrial buildings was also being sustained by the logistics sector.