Demand for power signals manufacturing upturn.

25th July 2011

Growing demand for premises with larger power supplies has sparked optimism of a rise in manufacturing that could boost market recovery.
Recent increased uptake of shed premises nationally is seen as a positive sign of a manufacturing upturn for the economy. Leading Midlands commercial property specialist Andrew and Ashwell confirms the trend, with a spate of sales and lettings across Leicestershire reflecting rising demand for premises in the manufacturing sector.
DTZ Industrial research has shown letting activity nationwide up slightly over the latter end of 2010. Levels of grade-A lettings continue to hold firm, despite a slight overall fall in take-up levels compared with the previous year. Retail and manufacturing are the dominant sectors, accounting for 90% of all activity.
Tony Barrie, Andrew and Ashwell industrial property specialist, said that while warehousing and distribution property had dominated the industrial sector throughout the recession, the past few months have shown an upsurge in demand for manufacturing premises.
“Favourable exchange rates continue to boost the export-driven manufacturing sector and although the market is currently challenging there is demand for the right premises in the right location.”
“While property companies and private property vehicles still govern much purchasing activity, low yields, combined with weak rental growth prospects in the office and retail sectors, currently highlight the relative attractiveness of industrial property.”
He added that although the balance of negotiating power remains with tenants, supply constraints are beginning to tip the balance towards landlords.
“Availability of grade-A stock continues to fall as speculative development remains generally slow and demand is therefore enhanced.”
Refurbished industrial units at Old Dalby, near Melton Mowbray, have gone well. This year Andrew and Ashwell has let three units: to East Midlands Pharma, Funbikes and Echotechnics.
The firm has also recently completed the letting of the 44,671 sq ft of space at Wharf Way, Glen Parva, to All Weather Windows. The move enables the long-established Leicester company to consolidate its operation under one roof, enhancing production and boosting employment by 50%.
At Tigers Close Wigston, local developer Hammond Grange Ltd has built eight new units, all of which are now taken.
On the ten-acre site of the former government skills centre in Troon Way, off Humberstone Lane, refurbished industrial units and office space is going well with many let and further offices coming up soon.
Mr Barrie said: “Although the challenging market continues there are some encouraging signs out there.
“For those holding the right stock and able to afford to lease at attractive levels, there is growing proof of the lettings market also improving. If you buy at a good price, you can lease at competitive levels to the market.
“During every downturn there needs to be evidence of increasing letting activity, even at the lowest levels, to re-ignite the growth cycle. Tentative signs are that we could