Report questions assertion that manufacturing industry is in recession

Report questions assertion that manufacturing industry is in recession

Keywords Home shopping, Industry, Property

While some parts of the UK are seeing factory closures, there is little evidence of a manufacturing recession in the south-east, according to a report by FPDSavills, if the take-up of industrial property is used as an indicator ­ up 41 per cent to 6.3 million sq.ft this year.

The report says that along the western corridor, take-up in the last 18 months has been significantly higher than during the period of high GDP growth in 1996. Altogether, some 2 million sq.ft of space has been let, mainly to logistics operators, retailers and electronics companies, with a further 500,000 sq.ft self-built by occupiers themselves. The main "hotspot" along the M4/M3 is Heathrow, which accounted for 35 per cent of total take-up.

Similar tales are told in the northern sector, which accounted for 55 per cent of the total take-up in the entire survey area, equating to 1.6-1.8 million sq.ft being let every six months. This is the result of a greater degree of availability, cheaper rents and better access to the M1, in comparison with the other sectors. Although take-up in the southern sector could not match that, it was more than double the take-up, at 0.95 million sq.ft, compared to the same period the year before.

Developers are cashing in on the fact that there is little modern space available ­ 1.9 million sq.ft compared to 12.8 million sq.ft of Grade C supply ­ and as a result there are currently some 30 speculative developments under construction, equating to an additional 1.6 million sq.ft. Although the traditional south-east industrial developers ­ Slough Estates and Brixton Estates ­ are currently active, they by no means dominate the market. Other developers include Land Securities, ProLogis Kingspark and Countryside Properties.

For further information contact: Fiona O'Callaghan, FPDSavills Research. Tel: 0171 409 8738, or Henry Angell-James, FPDSavills. Tel: 0171 409 8846.