The industrial market shows no signs of slowing despite political challenges

Despite the ever-mounting challenges of our political landscape, amidst Brexit and the visible slowdown in both the office and retail sectors, the industrial market appears to defy logic and continues to go from strength to strength. The UK industrial market had an impressive overall total return of 15.5% in 2018, which substantially outperforms the other traditional sectors. The Midlands market in particular, principally because of our central geographic location within the country, continues to attract the majority of demand.

Such strong demand does lead to challenges and the market now faces a significant lack of suitable land to develop new grade A stock to meet occupier’s requirements. The market appears to be especially strong in both the ‘big box’ sector and the sub 100,000 sq ft sector, however, little speculative development is happening on smaller unit schemes. To make these schemes economically viable, one has to be able to acquire the land at sensible values given the increased costs in relation to smaller unit schemes, lesser covenants etc.

Opus Land are well positioned to capitalise on these opportunities that exist within the industrial sector in the Midlands, being positioned geographically in exactly the right area with the local knowledge required to unlock these sites; many of which we acquire off market, can match those with suitable occupiers and investors to facilitate development in our area.

Being based in the Midlands, we have seen the continued and stable increase in demand continue to eat away at supply, which in turn is forcing rents and land values upwards. This is good news for investors, however, it does cause obvious challenges for some of our occupier partners as they seek to obtain certainty over their business expenditure into the future.

Looking into 2020 and beyond, despite the challenges faced politically, we do not see a cessation of demand in the industrial sector and we believe there will continue to be a strong need for further good quality stock to be constructed for occupiers, either on a design and build basis where occupier requirements are bespoke (as they often are in today’s market), or on a speculative basis for smaller unit schemes to help house the many smaller businesses seeking good quality space in the area.

During 2019 alone, Opus Land have developed 1 million sq ft of industrial accommodation, including, Meggit at Prospero Ansty, the 490,000 sq ft industrial/office development; CONNEQT the 283,000 sq ft speculative development in Cannock; and Ace 135, the 135,000 sq ft site in Tamworth. Opus Land are at the forefront of this type of development in the Midlands and we are continually on the lookout for more opportunities in this sector.

To find out more about Opus Land and our projects, see our projects page here.