Improving sentiment coupled with a supply of immediately available buildings has positioned South Yorkshire and North East Derbyshire well to respond to occupier demand in 2025.
Knight Frank recently released its LOGIC report concluding take-up across the South Yorkshire and North East Derbyshire region totaled 986,000 sq ft for 2024 (all quality units 50,000 sq ft plus), which is behind the long term average as a result of a challenging year across the market.
2024 take-up was characterised by units sub 200,000 sq ft across 9 transactions of which manufacturing accounted for 24 per cent of take-up, distribution accounted for 27 per cent and retail 18 per cent.
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 which has been delivered to the UK Green Building Council’s Carbon Net Zero standard. 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 per cent annually on 50,000 sq ft plus units to £9 psf, with prime rents in Doncaster and Rotherham standing at £7.75 psf. Further growth is expected.
Rebecca Schofield, partner at Knight Frank in Sheffield and head of Yorkshire Industrial and Logistics, said: “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.”
