M7 Real Estate sets new U.K. industrial record rent of £30 per square foot
Indicative of the heightened state of the local industrial property market, M7 Real Estate has set what it believes to be the highest rent ever achieved for a standard open-market industrial unit letting in the United Kingdom at £30 (€33) per square foot (0.09 square meters).
The manager has completed the rebuild and letting of three units totalling 6,755 square feet (627 square meters) at Parkfield Industrial Estate, Battersea, in London. The units were destroyed by fire in 2016, with its previous leases expiring within the rebuilding period.
Sotheby’s, the auction house, has completed a new 10-year lease at an annual rent of £63,090 (€70,082) on 2,100 square feet (195 square meters), equivalent to £30 (€33) per square foot. Food Stars Limited, a provider of flexible commercial kitchen space, has also completed a 25-year lease, with 10 years term certain, at a rent of £30 (€39) per square foot on 4,600 square feet (427 square meters).
The estate extends to a total of 69,000 square feet (6,410 square meters) and is contained within 20 units.
Daniel Roberts, senior asset manager at M7 Real Estate says: “Rental growth in London has accelerated further in 2018 with double-digit increases seen in most areas. This represents a 65 percent increase in rental tone for the estate and is a clear demonstration of the impact of supply being taken out of the market through conversion into residential space, coupled with increasing demand for high-quality industrial space.”
John Murnaghan, head of real estate in the U.K. and Ireland for M7, adds: “These lettings have set a milestone both for Battersea and the wider market as the race for well-located industrial space continues.
“We are seeing rental levels hitting new heights across the U.K., fueled by the supply/demand imbalance and overall structural changes in the market. It is a mixed picture in some parts of the country, but estates that have strong fundamentals like Battersea continue to drive performance.”