Rents continue to be robust and in many locations are rising across the South East industrial market, according to SHW’s Q1 2024 South East Industrial Focus.
David Martin, SHW’s Partner and Head of Sussex Coast, comments: “On the whole, 2023 saw a good level of take up in most areas across the South East, across all size ranges, with lower take up levels generally in locations where availability of good quality stock is restricted. As expected, the majority of demand is linked to logistics / B8, rather than B1 manufacturing, however this sector did slowdown in 2023 compared with 2022 and the larger (over 75,000 sq ft) size range also saw a reduction in demand and resultant transactions.
“Rents continue to be robust despite occupiers pushing back and, in many locations, continue to rise. However, the rate of increase has slowed, albeit incentives have increased marginally.”
On the Sussex Coast, rental levels have remained level due to the continuing low levels of availability and no new development. In Bognor and Chichester, rents stayed at £12.50 per sq ft, although take up increased from 20,6000 sq ft to 56,600 sq ft. Availability stands at 80,000 sq ft and vacancy rates at 1.5%. Logged demand is very high, totalling over 3.6 million sq ft.
In Brighton and Hove, rents stayed at £16.50 per sq ft, although increasing to £21.50 per sq ft for units of sub 5,000 sq ft, with take up dropping from 75,500 sq ft in 2022 to 60,000 sq ft across 2023. Availability is up slightly to 76,5000 and logged demand remains high at over 2.5 million sq ft. In terms of refurbished space, Brighton Trade Park has just 13,720 sq ft of availability and demand for new, high-quality space remains high. Panattoni park Brighton, available to occupy this year, will bring 257,000 sq ft of new space to help serve demand.
Similarly, Eastbourne, Hailsham and Polegate rental levels stayed at £12.50 per sq ft, but take up increased in 2023 to 134,000 sq ft. With just 33,000 sq ft of availability and 890,000 sq ft of logged demand, any new space coming forward will be in high demand.
In Hastings, St Leonards and Bexhill, rents tipped up very slightly from £8.50 to £9 per sq ft, but only 11,000 sq ft was let in 2023. 179,000 sq ft remains available, albeit 109,000 sq ft of this is currently under offer, and logged demand is still high totalling 2.19 million sq ft.
Lewes, Newhaven and Peacehaven also saw an increase in rental levels by £1 per sq ft to £12.50 per sq ft. Take up remained fairly level with 29,000 sq ft transacted. Availability stands at 50,000 sq ft (1.6% vacancy) and, although far outweighing availability, logged demand is relatively low at 230,000 sq ft.
Rents stayed level in Rustington and Littlehampton at £12.50 per sq ft, with take up increasing slightly to 31,000 sq ft in 2023. Logged demand totals 365,000 sq ft, with 184,000 sq ft of availability. And in Worthing, although rents moved upwards by £0.50 per sq ft to £12 per sq ft, only 5,500 sq ft was transacted in 2023. Availability is relatively high at 294,000 sq ft, mostly in a single building of 261,000 sq ft, with logged demand totalling 660,000 sq ft.
Finally, in Shoreham and Lancing, rents remain level with 2022 levels at £14.50 per sq ft, with an increase in take up to 90,000 sq ft (62,000 sq ft in 2022). Just 28,5000 sq ft is available (1.2% vacancy) and logged demand is significantly higher than this, totalling 620,000 sq ft. Panattoni Park, Brighton, located at Brighton/Shoreham Airport will bring much needed Grade A stock to the area and is likely to see rents hit the £18 per sq ft mark.
David adds: “In terms of investment and development, with yields softening, developers are having to re-price land purchases in order to make appraisals stack up, but many newbuild schemes are still continuing at pace in prime locations where supply is low, which is good news for occupiers seeking new space with lower running costs and higher sustainability credentials to meet many companies’ ESG targets.”