Nicky Jones is our MD of NSM, and we manage over 4.1msq. ft feet of space in over 459 properties across the north.
Current demand is outstripping supply on available commercial space with sub-5,000 sq. ft being at a premium. The situation has been exacerbated by additional demand caused by the Covid outbreak.
“At the end of 2019 we saw the UK economy flatline due to Brexit and General Election uncertainty, but no one could have predicted current events that have shaped commercial needs in 2020, with seismic shifts in demand felt across the north.
There continues to be significant increase in demand for SME space across key market areas in the M62 corridor such as Liverpool City Region, Greater Manchester, and Yorkshire. We experienced a dearth in small industrial space throughout last year but the gap between supply and demand is now being felt even more acutely in the sub 5,000 sq. ft sector where quality space is getting snapped up as quickly as it comes to market – or even before marketing details are off the press in some cases.
It isn’t unusual for the team to have double figure waiting lists for viewings in this category, and recently we had logistics giant Hermes take space at Vector 31 in South Yorkshire with a deal that was completed in just 5 days – that was from initial enquiry to moving in. For those who weren’t successful the search continues in an ever-dwindling supply of suitable accommodation.
Despite Covid, we still have waiting lists of businesses throughout the Northern Powerhouse region which wish to expand – some urgently due to increase in demand in their sector, such as healthcare and hygiene product production.
Development has yet to catch up; although there are some bright spots on the horizon with Magna 34 near Rotherham, for example, bringing some much-needed new units, sub 4600 sq. ft, to the market by the end of the year.”
Stephen Barnes, MD of NSM’s sister company Network Space Development agreed:
“It is a recognised worry across the industry that there is a lack of new SME floorspace coming forward. One of the big deterrents is the cost of delivering this type of space as it’s 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 against other higher values users compete.”
A search for sub 5,000 sq. ft space across, Liverpool City Region, Greater Manchester & Yorkshire reveals that there are fewer than 800 properties currently available across the M62 corridor. Yorkshire has less than 250 currently listed on online portals and many of these are old stock or sub-divisions of considerably larger single units which are often the least desirable options for tenants.
“Taking Sheffield City as just one example, we have waiting lists of businesses interested in this region but there are only circa 45 properties around Sheffield being marketed that fall under 5000 sq. ft. Around 25% of our vacations have been pre-let before existing tenants leave – that’s how strong demand is at the moment – and we have more units at Magna 34, Rotherham, ready to be marketed in Q4 this year and they are all sub 4600 sq. ft so we anticipate strong interest there too.”