South Yorkshire industrial market falls below average
Take-up across the South Yorkshire and North East Derbyshire region totalled 986,000 sq ft for 2024 (50,000 sq ft+), which fell behind the long-term average, a report from Knight Frank said.
A trend towards units of less than 200,000 sq ft characterised 2024, with nine transactions within that size bracket.
Of those nine, manufacturing accounted for 24% of take-up, distribution for 27%, and retail 18%.
Transactions included BAE Systems acquiring 96,000 sq ft at Sheffield’s Bessemer Park, marking the third letting at Phase 2 of the development, following earlier lettings to ITM and Dormole.
Only one 294,000 sq ft unit remains available at the park.
In addition, Octopus Energy acquired 91,923 sq ft at Catalyst in Sheffield, where a new headline rent in Sheffield was achieved at £9.00 per sq ft.
Prime rents in Sheffield, where supply is now tightest, rose by 9.8% annually on 50,000 sq ft+ units to £9/sq ft, with prime rents in Doncaster and Rotherham standing at £7.75/sq ft. Further growth is expected.
When asked which areas were most popular, Rebecca Schofield, partner at Knight Frank in Sheffield and head of Yorkshire Industrial and Logistics, said: “In Sheffield and around the M1, there is more limited supply here of units sub 200k.
“We have seen an increase in occupier requirements for larger lettings of 400,000 sq ft+. We are yet to see these translate to lettings but will hopefully do so in coming months.
“Smaller and mid-size lettings of 50k and below continue to see steady take up and incremental rental growth.
“Development of this size continues to be challenging from a viability perspective, so don’t expect a significant influx of supply.
“The South Yorkshire and North East Derbyshire region saw an increase in supply during 2024, following a number of new developments reaching completion and a number of second-hand buildings returning to the market. The vacancy rate rose to 12.7 per cent as at the end of Q4.”
Rebecca added: “Despite these figures indicating a healthy level of supply, some parts of the region face challenges. Sheffield is experiencing a shortage of new stock, with just two new-build units available.
“The South Yorkshire and North East Derbyshire region is well-positioned to capitalise on occupier requirements for immediate space, and we are seeing good demand in the market from both the B8 and B2 sectors.
“Looking at the year ahead we have seen an uptick in enquiry levels and viewing activities across the market.
“Sentiment and occupier confidence has improved and we are seeing requirements move forward to transactions.
“We have already seen a number of transactions complete in Q1 and there are a number of buildings under offer which we expect to move forward to swift completion. Q1 2025 occupier take-up for the region is expected to be much stronger.’’
