Market commentary for May 2011

The pattern which has been evolving this year continued during May. There are good interest levels in property – particularly in the range from 300 m2 through to 1000 m2, from both tenants and owner-occupiers.

Often however, that interest has to be flushed out, and those agents who maintain the most active contacts in the industrial community are the ones who get the enquiry. Often, there is no better way of getting enquiry than the old fashioned way of knocking on doors.

We are seeing a shortening of the time lag between interest and commitment – in other words it is quicker to get people on paper. Possibly this has been helped by the fact that deals are being done, and often tenants who have delayed too much have missed out.

Leasing incentives are still being offered, but we have noticed that these are becoming less of an issue as more tenants realise that the right building in the right location is more meaningful that incentives. Rentals are tending to be flat. One interesting trend is a move towards more properties being offered on an overall square metre rental – rather than a split between warehouse and office/amenities. We see some merit in this, as increasingly tenants are being burdened with unwanted and un-needed (expensive) office space, which would be more useful as functional warehouse/factory.