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Looming shortage of small industrial units in Peterborough

Aug 21, 2014

With demand generally having increased for commercial property over the last 12-24 months and with a gradual shift towards a growing economy we are starting to see the first signs of a shortage in some commercial property types.

There is now a very limited supply of new (or nearly new) small industrial units in Peterborough of less than 2,000 sq ft and small businesses seeking space in this sector may struggle to find new premises in the short to medium term.  Part of the problem stems from the fact that, in recent years, very few new developments have taken place as a result of lack of development finance and rising construction costs.  Locally there have been limited exceptions, notably Enterprise Court, Yaxley, which itself has only one unit remaining, available to rent or buy.  Both this estate and Talon Court (also on Eagle Business Park) have proved to be very popular when released to the market.

Looming shortage of small industrial units in Peterborough

Existing stock will of course prove more popular if a more modern equivalent is unavailable. At one point, recently, 6 small units were available at the same time on the Second Drove Industrial Estate……we now only have one. 

So…….does this mean that we are going to see an increase in speculative industrial developments such as this or are we going to see a shortage of stock resulting in an increase in values/rent?  It is our opinion that we will see a shortage of stock given that any new developments currently coming to the market are for larger, self-contained units as the construction cost for smaller buildings may be prohibitive.  It is probable that prices will inevitably rise.

With demand continuing to improve incentives granted on new lettings will continue to reduce.  As an example, the latest letting of a unit of around 1,000 sq ft reflected a 1 month rent free period in exchange for a 3 year lease, compared to around 6 months at the height of the recession, evidence of an improving market and an improving economy. 

We need to ensure that premises are available for both new and expanding businesses to ensure Peterborough’s continued success as a major employment centre and so new development is key. 

Cameron Park, Barker Storey Matthews, Peterborough Office – 01733 897722


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