A critical shortage in availability of small industrial space across the Northern Powerhouse is threatening to stall the growth of small businesses according to a leading developer and property management firm.
Nicky Jones, MD of NSM, the property management arm of Network Space, which manages over 10 million sq ft feet of space in over 150 properties across the north, explains that the demand for small space is at an incredibly high level.
“During the last 12 months, there has been a perceptible ratcheting up of demand for space across our key market areas of the Liverpool City Region, Greater Manchester, and Yorkshire.
“This is being felt most acutely in the sub 5,000 sq ft bracket where quality space is getting snapped up as quickly as it comes to market. We have an example this month whereby we had a waiting list for the return of a unit in Salford, the first day it became available we had eight viewings in one day. We obviously had disappointed customers who we were unable to accommodate elsewhere.
“We don’t need to incentivise tenants who can see the competition to secure high-quality space in the right location. In are desperate to sign up for high-quality space in the right location. In fact, we have waiting lists of businesses throughout the Northern Powerhouse wanting to expand but can’t due to the lack of appropriate accommodation. Rents are as a result increasing but unfortunately not enough to attract developers to build the space required to meet the demand.
Stephen Barnes, MD of Network Space Development added, “It is recognised across the industry that there is a lack of new SME floorspace coming forward and there are a number of reasons for this. Primarily, the cost of delivering this type of space is generally quite high and often exceeds the capital value that the completed space commands. This situation is exacerbated by a lack of suitable small urban fringe sites that can be secured at values which can support such development when other higher values uses compete. That said, we continue to look closely at opportunities in this area.”
A search using Rightmove for sub 5,000 sq ft space across, Liverpool City Region, Greater Manchester, West Yorkshire, South Yorkshire and East Yorkshire / Humberside, reveals that there are fewer than 300 properties available. Many of these are old stock and are sub-divisions of considerably larger single units which are often the least desirable options for tenants.
Network Space has been providing industrial workspace and warehousing for over 35 years and intends to deliver 2.5 million sq ft of industrial property over the next five years.