The current rise in speculative development will help replenish an undersupplied market, according to research from Cushman & Wakefield.
Eight million sq ft of speculative development was underway across 44 buildings over 50,000 sq ft at the end of 2018, while the average void period for spec built space fell to nine months in the final quarter of 2018.
Cushman & Wakefield estimates that at current take-up rates, vacant newly built space will reach 14 million sq ft by the end of 2019.
However, the research said that low vacancies (around 5 per cent), scarcity of land in prime locations and a restrictive planning regime are likely to prevent any over-supply while pent-up demand for Grade A space will continue to fuel rental growth.
Simon Lloyd, partner, national logistics & industrial, said: “While there will continue to be demand from occupiers for built to suit solutions, particularly in the manufacturing sector, the availability of speculative buildings is important in this dynamic market sector. The immediacy of a building solution for an occupier means they can focus on the operational aspects of their requirements, and therefore satisfy the demands of their customers. The current supply of new buildings does not represent many months’ take-up, and consequently occupiers will still need to focus on building solutions at an early stage.”
