GVA report: 2015 business park review
The latest Business Parks Review from GVA/Bilfinger has calculated that, in the first two quarters of 2015, a total of 2.3 million square feet of take-up was recorded. This was a 6 per-cent increase on the half year average of 2.2 million documented over the five year calculation period. Of this take-up, Yorkshire, Humberside and the North East showed the highest performance, with average levels documented as over 470,000 square feet for the first two quarters of 2015, which is the highest recorded take-up since June 2009.
The Midlands showed a 19 per-cent increase over the half year, a five year average of 386,000 square feet documented, and business parks situated near Manchester Airport – specifically, Atlas Park, Concord Business Park and Manchester Business Park – have all reported higher levels of European occupier enquiries.
Construction activity has decreased since the last survey, with figures showing a 0.2 million drop, although completions during the half year have reached a collective 730,000 square feet – the highest documented level since December 2009. This activity is in comparison to a low of 350,000 square feet in 2012, as well as a noted high of 4.5 million square feet in 2008. Availability has fallen over the last five consecutive surveys, down to 15.4 million square feet by the end of the second quarter. This is in comparison to 15.7 square feet at 2014’s year end, with a peak recorded in 2012 of 18.6 million square feet.
With increased demands and a stock increase of less than 789,000 square feet, vacancy rates also fell in the first two quarters, from 16.2 per-cent in December 2014 to 15.8 per-cent by June 2015. This is in comparison to the peak rate of 19.3 per-cent documented by the end of 2012, and the low rate of 12.4 per-cent by 2007’s year end. It is important to note that the vacancy rates have not fallen uniformly across the regions, with the Midlands, Scotland, the North West and North East seeing decreases, whilst Wales and the South West remained static. The South East and East saw a minor availability increase yet Scotland, despite showing a stock increase, saw availability drop to 33 per-cent. Rental performance rebounded with the strongest rate since 2000, inspiring predictions for a 14 per-cent return over 2015 as a whole, to be followed in 2016 by an 8 per-cent return driven by rental growth, rather than yield movement.