11th Nov 2014 09:48
LONDON (Alliance News) - A & J Mucklow Group, a real estate investment trust based in the Midlands, has seen its occupancy rate increase to 93.8% from 93.3%, with a further 1% of vacant space currently in legal hands, in the first four months of its financial year, according to Chairman Rupert Mucklow.
According to Mucklow, the Midlands industrial property market has continued to perform well during the period from July 1 to November 10.
"Quoting rents on our vacant industrial properties have hardened by around 25 pence per square foot over the last six months, due to a shortage of available space and steady occupier demand. Industrial rents are now averaging between GBP5.00 and GBP5.75 per square foot, depending on unit size, specification and location," Mucklow said.
According to the chairman, occupiers are starting to realise that rental levels on second-hand industrial space are rising for the first time in 15 years and likely to continue to do so, while demand outstrips supply.
"However, rental levels will have to rise above GBP6.00 per square foot before we consider speculatively developing any new space," Mucklow said.
According to the statement issued to coincide with the company's annual general meeting Tuesday morning, a 36,000 square foot industrial unit at Redfern Park, Tyseley, Birmingham was let in October 2014 at a rent of GBP5.75 per square foot, equating to GBP210,000 per annum, on a 20 year lease, without any break clauses. The vacant property was acquired and refurbished in the previous half year at a total cost of GBP1.74 million.
Terms also have been agreed and solicitors instructed on two further lettings at GBP5.75 per square foot at Forward Park, Birmingham, according to the statement. The 26,000 square foot industrial unit has recently been split and substantially refurbished at a cost of GBP170,000 and was previously let at a rent of GBP4.80 per square foot.
"We continue actively to monitor the regional investment market for suitable acquisition opportunities, but none were identified during the period. Industrial property values still appear to be rising on the back of strong investor demand, supported by prospects of rental growth," the chairman said.
A & J Mucklow shares were untraded on Tuesday at 480.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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