A tenfold increase in container shipping costs and China continuing to increase its prices for goods is driving a sea change in land usage in the West Midlands.
Commercial property agent Siddall Jones is reporting that the price of industrial land is exceeding residential values in some parts of the West Midlands.
A surge in reshoring – bringing the manufacturing of goods back to the UK – is also helping to drive record industrial land prices.
Managing director Ed Siddall-Jones said: “We recently sold a half-acre site fronting Mucklow Hill in Halesowen to a developer for well in excess of the guide price of £500,000 – and they plan to use the site for industrial use.
“We have seen demand for industrial land and buildings soar over recent months but there is a severe shortage of small to medium sites and buildings to satisfy demand from SMEs.”
He said that UK manufacturing was receiving a major boost as China continues to increase its costs and the cost of shipping containers has increased tenfold.
With supply chain problems also a major issue, companies are also looking to hold more stock, which requires more space.
“Competition for industrial buildings and sites has never been greater in my experience and this is driving demand.
“It used to be a given that industrial or brownfield land would be snapped up by residential developers, if planning permission could be achieved, but that is not necessarily the case now.”
The deal follows the sale by Siddall Jones of a huge industrial site in Greater Manchester for £7.2 million which was on the market for less than a week.
The self-contained, 160,000 sq ft manufacturing and warehouse facility known as No 2 Works, on the established Kenwood Road Industrial Estate in Reddish, near Stockport, was purchased by Birmingham-based Mercia Real Estate which plans to refurbish and rent the property, with Siddall Jones retained to market future lettings.
The deal follows the recent sale by Siddall Jones of a small industrial estate in Sydenham Road, Birmingham, for a price close to £1 million.
Ed Siddall-Jones said: “These are just a handful of examples of how hot the Midlands industrial market is at present.
“Whether it is companies looking for additional premises, or looking to consolidate two or three sites into one larger one, the demand is there.
“We are urging anyone across the region who has valuable industrial property or better still a vacant site to get in touch with us as we have purchasers waiting to buy the right sites in the right locations.”