Nigel Rowe, head of industrial property at Weatheralls said: "Fortunately, continuing low levels of stock has ensured a semblance of demand and supply balance in most areas, ensuring rental stability. " But he warned: "With little pressure on rents to grow over the next few years, we are forecasting an average increase of 3.2% per annum across the UK until 2007, although a fall in national and international confidence could trigger a release of second hand property causing market saturation."
However investor interest in the industrial market remains high and will continue into 2003, and Chris Gilchrist-Fisher, from Weatheralls' national investment agency said: "The limited supply of stock coupled with strong demand has held prices up across the whole sector. Particularly strong prices have been achieved for distribution warehouses let to good covenants on long leases and despite the slowing occupational market, we've seen no impact on yields as yet, with prime yields holding at 6.75%."
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