Why Derby: ‘Demand for city’s industrial space remains resilient’

Demand for well-located industrial units across Derby continues to remain strong, particularly for assets offering yard space and strong road connectivity, according to agents at BB&J Commercial. Here, surveyor Cameron Godfrey and partner Mark Richardson explain why.

CAMERON GODFREY

Recently, I was involved in the completion of an off-market industrial letting at 772 London Road, Derby, where BB&J Commercial acted on behalf of the landlord to secure a new occupier after the surrender of a long-term lease.

The transaction, which involved a 21,170 sq ft industrial unit with substantial external yard space, was completed within five months despite a complex lease restructuring process.

The deal was agreed against a backdrop of constrained supply and sustained occupier demand for functional industrial accommodation within the city.

It reflects wider conditions being seen across the Derby industrial market.

We are consistently seeing strong demand for well-located industrial units, particularly those offering secure yard space and good access to Derby’s arterial road network.

Opportunities of this nature are becoming increasingly scarce, which is placing upward pressure on rents and reducing void periods where assets are correctly positioned.

Much of the current activity is being driven by occupiers seeking to consolidate operations or relocate from secondary stock into more operationally efficient premises, rather than speculative expansion.

What is notable is the speed at which good quality stock is being absorbed, often through off-market or discrete processes.

Many occupiers are prepared to move quickly when the right opportunity becomes available, particularly in established locations such as London Road, Pride Park and Raynesway.

MARK RICHARDSON

Landlords are increasingly reassessing the performance of their industrial assets in light of market conditions.

We are seeing them take a far more proactive approach to asset management, whether that’s through re-gearing existing leases, exploring off-market demand or repositioning properties to capture rental growth.

In several cases, rents being achieved today are significantly ahead of historic levels.

While large-scale logistics parks continue to attract national and international occupiers, mid-sized industrial units remain a critical and undersupplied part of Derby’s commercial property ecosystem.

The strength of Derby’s manufacturing, engineering and service-based occupier base continues to underpin demand.

With limited new stock coming forward at this size range, existing estates are playing an increasingly important role in meeting business needs.

We would advise landlords and property owners to review their industrial holdings in light of current demand levels, particularly where lease events or underutilised assets present opportunities to enhance income or reduce risk.