It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Rebecca Schofield, partner and head of Industrial in Yorkshire at commercial property agents Knight Frank, Sheffield.
There continues to be a significant supply and demand imbalance at the small and medium end of the market as a result of the server shortage of new and second hand industrial and warehouse space across the region.
Very little new development of this size has entered the market and there continues to be a viability challenge to deliver such sized units as a result of the increasing construction costs. This continues to put upwards pressure on rents for both new and second hand accommodation.
Looking at the larger end of the market, for accommodation over 50,000 sq ft, again there is currently a shortage of immediately available space, with the vacancy rate for the region standing at 2.3% at the end of Q4 2022. However there is around 3.1m sq ft of speculative development in construction at the moment across the region to respond to this.
The occupier market remains active, however they are taking a little longer to make decisions on the right building, as they also face business rate revaluations in 2023 which, along with higher fuel and energy bills, will add to operating costs.
We expect that location and specification will be increasingly important for operators in 2023. Well-located, energy-efficient facilities that can help firms mitigate costs will be key to maximising efficiencies.
We are seeing good demand from general B8 occupiers as well as manufacturing and vertical farming.