Market Insight

What does 2023 hold for the BCP industrial market?

January 18, 2023
2022 was a year of two halves – one which saw the industrial development market in its prime during the first six months of the year – ‘hot property’ for both investors and developers.

However, by the end of 2022, a combination of interest rate hikes and build cost inflation hit land values.

Whilst we may have turned the page on 2022, some of the development challenges we saw in the last quarter of the year, will persist into 2023. So, what does the year hold for the Bournemouth, Christchurch and Poole (BCP) conurbation in industrial property terms?

Our Bournemouth industrial agents explore what occupiers, landlords, investors and developers can expect – the core message being that alongside potential challenges, there will also be opportunities. We enjoy a broad range of industrial stock in the BCP area – from high-quality new stock to lower cost second hand assets, but the main problem for the Dorset region is the supply Vs demand dynamic.

Historically, the conurbation, and in particular Poole, has suffered from a limited supply of employment land.

In recent years, the majority of speculative industrial development has been restricted to small unit schemes. These have always been very successful both on a freehold and leasehold basis, because of the high proportion of SMEs within the local economy.

However, speculative development of units in excess of 10,000 sq ft has been limited, which is feeding the supply/demand imbalance here.

Supply will remain a problem

The shortage of industrial stock that we experienced throughout 2022 and previous years will remain a problem into 2023 and beyond.

This is because occupier demand continues to outstrip built and available industrial supply, with pipeline supply also affected by some developers putting speculative development on hold due to build and funding costs increases.

Ultimately, this will prolong the shortage of supply we are already experiencing, so occupiers can expect to see an increase in rents on existing built stock this year.

However, timely delivery of the new 187,528 sq ft industrial scheme at Bedrock Park, Ferndown Industrial Estate, should alleviate some of the supply pressure with the units due to complete early in 2023. Nearly 45,000 sq ft of this scheme has been pre-let prior to practical completion, demonstrating the demand for high-quality units.

Despite some new development coming through, we are aware of occupier requirements which still cannot be fulfilled in the BCP conurbation due to a lack of appropriate stock, including a handful of mid-sized warehouse requirements (30,000 sq ft plus) where business owners are struggling to identify suitable properties.

An employment land shortage is exacerbating the issue, with delays to the Local Plan compounding the situation.

Following the merger of Bournemouth, Christchurch and Poole’s councils in 2019, the first BCP Local Plan was meant to have been adopted by summer 2023. However, due to delays, this has been pushed back and they are aiming to have it in place by winter 2024. If this issue is not addressed, it may force local employers to move their operations outside the area.

Ben Duly, Senior Surveyor, Vail Williams LLP.

Collaboration is key

If we are to overcome the employment land shortage in BCP area and wider conurbation, we need to see more collaboration between the local authorities and the commercial property agents on the ground.

This will help to establish where demand is coming from, what is needed, and where land needs to be allocated for industrial development.

We also need to see more done to address the planning challenges the area faces – specifically, an improvement in planning timescales from the Local Planning Authority, to allow industrial development to come through in a timelier fashion.

Where will rents go?

With demand continuing to outstrip supply, we are likely to see industrial rents continue to push on in 2023, but not at the same pace we’ve seen over the last three years.

For brand new stock (10,000 sq ft plus), we expect to see rents hit £11.00 psf in line with the wider South Coast region, whereas second-hand units will remain 20-30% lower.

Smaller unit stock is currently achieving £14.00 – £15.00 psf on high-quality/ new build units of in the region of 1,000 sq ft, but we expect this to increase this year, such is the level of demand.

As the heat comes out of the top of the market, this will put pressure on industrial yields, so landlords and investors will need to revisit industrial rents with this in mind.

Landlords of ageing industrial stock may wish to think about investing in their units, either through extensive refurbishment or complete redevelopment, to deliver a higher specification of unit to market, boasting green credentials.

Not only will this appeal to occupiers, but it will also help them to push rents on whilst answering to their own ESG aspirations – not to mention forthcoming EPC rating requirements.

What will occupiers do?

Increasing rents, alongside rising energy costs and the spectre of rising business rates which could increase by up to 26% in the BCP area, according to our business rates experts, will put pressure on occupiers to look at their property costs and building requirements.

Those occupiers of poorer quality industrial units with lease events in the next 18 months, are likely to consider moving to higher quality, better insulated space, to help with their energy costs.


However, despite this focus on cost, the flight to quality that we saw in 2022 will likely continue as occupiers seek high-quality units boasting green credentials, in line with their ESG policies and to support staff retention and recruitment. Indeed, some occupiers will be willing to pay a higher rent if the quality of the building and its ESG credentials are right, with the efficiency savings from a wider occupation cost perspective, reaping rewards.

Bryony Solan, Associate, Vail Williams LLP.

Chinks of supply light

Despite supply challenges, 2023 will see the delivery of nearly 200,000 sq ft of new high-quality industrial stock come to market.

Bedrock Park on the Ferndown Industrial Estate will deliver much needed high-quality stock with the 26-unit scheme offering a range of green credentials from solar PV panels and EV charging points to target EPC ratings of B.

Ferndown Industrial Estate, the premier industrial location situated just outside the BCP conurbation, home to Bedrock Park, is situated adjacent to the A31, providing easy access to the M27 and M3. Rents range from £10.00 – £14.50 psf.    

Here, there is a new 53,600 sq ft pre-let opportunity with planning consent – Ferndown 50. A self-contained site on 2.37 acres with a 63m fenced and gated yard, this brand-new detached unit has a 9-month construction timeframe, and could be delivered by the end of 2023, with quoting rents of £11.00 psf.

In Q1 2023, a 14,690 sq ft speculatively built unit is expected to be ready at Link Estate Holton Heath Trading Park, Poole.

The unit benefits from first floor offices, 8m internal eaves hight and double height glazed feature to front elevation with a 50k/n floor loading capacity and gated and fenced service yard with 25 car parking spaces, and quoting rents of £10.50 psf.

We are also due to launch a new scheme at Magna Park, Poole, in 2023, which will deliver c.50,000 sq ft over two units, subject to planning consent.

Opportunities will remain

There is no doubt that there will be choppy waters ahead in 2023, but there will be opportunities to take advantage of in changing market conditions.

Our property experts based in Bournemouth are on hand to help you make the most of them – whether you are an occupier, landlord, investor or developer.

We can advise throughout the lifecycle of your industrial property requirements – from helping businesses seeking premises in the region to locate premises and negotiate the best possible terms, to supporting investors and developers with the viability and delivery of new stock.

This includes everything from allocating land for development through the planning process and selling employment land, to providing development and viability advice and project managing the delivery of the scheme, to marketing the resulting units for let or sale either vacant or as an investment.

Vail villiams brand new office in Bournemouth