Prime industrial rents grew by 11.1% during the first half of the year in Edinburgh, according to the latest Industrial and Logistics Snapshot report by Colliers International.

Elsewhere, Glasgow and Manchester performed positively with an increase of 10%, while Bristol improved by 8.3%.

Tim Davies, Head of EMEA Industrial and Logistics at Colliers, said: "The supply of quality product remains limited in the UK, and this fact combined with increased demand, has led to a rise in rents across all locations for prime stock in H1 2015."

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He added: "The UK continues to lead the way in terms of increased activity, but the rest of Europe is beginning to follow suit.

"All UK markets report increasing rental levels which reflects the fact that levels of supply are being eroded and occupational demand is increasing.  Inevitably with funding more readily available speculative development will occur throughout the regions' strongest locations."

Strong yield compression took place in all UK markets, with the sharpest falls (-100 bps) recorded in Manchester, Bristol, Edinburgh and Belfast.

Tim Davies concluded: "Investors' appetite and record-low interest rates continued to drive compression of prime logistics yields. In the first six months of 2015 we saw prime yields tightening in more than half of the markets we monitored.

"In the next 12 months, further tightening of yields is expected across the Netherlands and UK, as well as in Dublin, Central Poland, Warsaw and Bucharest."

(LM)