Occupational demand for industrial, warehouse and trade counter units across the central south coast remains strong. As a result, there is a good level of interest from industrial investors prepared to pay strong prices for the best assets.
Investment agent Ben Duly, who recently joined Vail Williams and is responsible for marketing multi-sector investment property across the Dorset and wider south coast region, discusses.
Industrial investment yields are as strong as they have ever been, fuelled by a prolonged period of low interest rates and the historic imbalance between supply and demand which has driven rental growth.
Over the last 12 months, industrial deals accounted for 26% of all investment transactions in the UK by value, and almost a third (30%) by volume.
However, most transactions in Dorset were in the sub-£10m range – symptomatic of the smaller scale of the industrial estates located here.
Indeed, with the rise in demand from owner occupiers, we have seen many of the larger estates be broken up into smaller investments, creating pent up demand for larger industrial estates under single ownership.
To date, investors have factored in future rental growth and have been alert to the potential growth of this market, which has reflected similar rental growth patterns experienced elsewhere.
However, we could see rental growth start to plateau as running costs increase and we are still monitoring the real impact of the recent interest rate hikes on commercial investment appetite.
Notwithstanding this, demand for industrial, warehouse and trade counters remains high in Dorset.
This, together with the region’s connectivity via the A31 trunk road and major infrastructure improvements at the Ringwood roundabout, reinforces the region’s industrial offer to manufacturing, distribution, logistics and e-commerce businesses, and by extension, industrial property investors.
Vail Williams is currently marketing a range of industrial properties throughout Dorset. Get in touch for more information.
Ben Duly, Senior Surveyor – Agency and Investment
Vail Williams is a leading commercial property consultancy, with South Coast offices in Bournemouth, Portsmouth, Southampton and Brighton.