The Midlands is spearheading the highest level of speculative development of industrial property in the UK over the last five years, according to new research from property consultancy King Sturge.
The firm's latest survey, which says that large distribution facilities account for more than 70 per cent of all floorspace under construction in the UK, indicates that just more than 40 per cent of all speculative industrial development is taking place in the Midlands.
Birmingham-based Carl Durrant, who heads up King Sturge's logistics-industrial agency in the West Midlands, said: "There has been a substantial increase in speculative construction over the past few months - fueled by the fact that the development of 'big box sheds' is buoyant due to the weight of investment money in industrial property.
"There is demand for industrial property from both occupiers and investors, with the result that yields for industrial property have continued to harden," he added.
The latest UK Industrial and Distribution Floorspace survey from King Sturge reveals that prime yields in the West Midlands are currently between six and 6.25 per cent for industrial estates and between 5.75 and six per cent for distribution warehouses, while prime industrial rents are £67.30 per sq m in Solihull, around £61.90 per sq m in Birmingham and between £51.10 - £53.80 per sq m in the Black Country.
Of all speculative development now under construction, 26.5 per cent is taking place in the East Midlands, where the largest such scheme in the UK - a massive 699,976 sq ft warehouse - is being built at Kettering in Northampton-shire by developer ProLogis. Scheduled for practical completion in May, it is likely to be occupied by a leading supply chain specialist.
Although the West Midlands only accounts for 13.6 per cent of all spec-build, floorspace availability in large units has risen from 5,575,700 sq ft to 8,697,231 sq ft and now provides more than 35 per cent of the region's total available stock.
The largest single speculative unit under construction in the West Midlands is at Stafford, where ProLogis is building 549,981 sq ft of space. Two smaller units totaling 190,004 sq ft are also under construction on the same site.
Other developers include Sladen Estates developing 170,000 sq ft of space at Radial Point, Stoke on Trent; Eden Park Developments, 209,992 sq ft at Centrum 100 Business Park, Staffordshire; Mucklow 89,996 sq ft in Birmingham; Boultbee Land 85,002 sq ft in Birmingham and Wrenbridge 39,998 sq ft in Solihull.