Supply and demand imbalance continues across Midlands Industrial market

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The Midlands industrial market reflected strong performance throughout 2022 as occupier appetite for high-quality robust spaces continued to increase across the region, alongside a shortage of suitable existing spaces. Both build-to-suit and speculative developments proved to be key features across the market.

Availability of industrial property reached 8.5 million sq ft (units over 50,000 sq ft) towards the end of 2022, reflecting an increase of 1.6% from 2021 which remains low.

James Clements, Head of Logistics and Industrial at Knight Frank Birmingham, said: “It would always prove to be a challenge to replicate the success during 2021, however the level of demand remained strong with 15 million sq ft of industrial space transacted across East and West Midland regions. 2022 saw increased levels of activity across the ‘Golden Triangle’ securing 58% of transactions compared to 42% in 2021. 

“With speculative development slowing towards the end of 2022, we anticipate demand to thrive from existing spaces throughout the coming year”.

Ashley Hudson, Partner and Head of Knight Frank Birmingham, added: “The Midlands industrial market proved to be resilient throughout 2022, with investment reaching £2.4 billion. Whilst this was a decrease of 36% on the record volumes seen in 2021, this is still ahead of the five-year average with overseas buyers accounting for 39% of investment. With growing occupational demand, limited new developments and changing supply markets, the Midlands have attracted solid investment opportunities as we start 2023.”

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