Supply in the North West is drying up fast following a burst of interest in prime industrial stock towards the end of 2009.
During the course of the year, take up for properties over 100,000 sq ft totalled more than 2.3 million square foot in the North West, which Steven Johnson of King Sturge reckons is “far greater than any other region”.
Of the deals completed at the end of 2009, headline quoting rents of between £4.25 – £4.72 were generally maintained, but deals have been highly incentive based.
Consequently, there is now evidence of a shortage of supply in some size ranges, most notably 100,000 – 200,000 sq ft, which Johnson says accounted for 60 per cent of all enquiries in the region last year.
“We’re finding that there is now a chronic shortage of supply in the new build market. In fact, there are only four buildings currently available in the whole of the North West in the 100,000 – 200,000 sq ft range.”
These include the Matrix building in Chester, a 102,000 sq ft facility with ten metre clear working height, ten dock and two level loading doors; and Northern Gateway in Knowsley, a 148,000 sq ft property with nine dock levellers and one level access door. There is also 175,000 sq ft of space at One 175 in Winsford and 200,000 sq ft at R2 The Revolution in Chorley.
And it’s a similar story above 200,000 sq ft; Patrick Properties’ 478,105 sq ft Galaxy facility in Knowsley and Gazeley’s 360,000 sq ft warehouse at G.Park Liverpool are the only two buildings currently available near the M62.
Galaxy has 15m minimum clear headroom, 48 dock and eight level access doors, and a floor loading up to 65kN/sq m. It is located at Junction 4 of the M57 motorway. Agents are GVA Grimley and King Sturge.
Unit 1 at G.Park Liverpool is six miles from Junction 6 of the M62 motorway. It boasts a haunch height of 14m with 31 dock levellers and two level access doors, as well as room for 257 car parking spaces and 34 HGV spaces. There are two other units available on the site on a build to suit basis offering 100,000 – 500,000 sq ft of space. Agents are CBRE, Colliers CRE and King Sturge.
As supply dries up Johnson also reckons we will see a return to design and build towards the back end of the year, particularly at locations such as Trafford Park where there is now nothing over 100,000 sq ft.
Electric
As it stands, Johnson says there are only two D&B sites available at Trafford Park. Segro has detailed consent for a 110,000 sq ft property at Electric Park on Westinghouse Road, which is on a six-acre site, and there is St Modwen’s ten-acre Avro Park site, which has the capacity to accommodate occupiers’ requirements for new purpose built facilities from 100,000 – 200,000 sq ft. King Sturge is the sole agent for Avro Park and is also acting for Segro.
Sara-Jane Preston of BNP Paribas Real Estate, says: “JD Sports is reported to be in the market seeking finance on its proposed major new distribution facility at Kingsway Business Park, which will see a major site taken out of the market when it is completed.”
Other than that she says there are only a few sites along the M62 which are prime for development. These include Hareshill Distribution Park in Heywood where Peel Developments recently secured planning consent for B8 development. BNP Paribas Real Estate & Colliers CRE are agents. Segro’s Heywood Distribution Park and Marshall’s Gemini 8 are also available.
“All of these sites are strategically located and have the necessary land provisions and planning consents to accommodate large logistics and distribution requirements,” says Preston “While there is very little available in terms of speculatively built stock, these sites represent prime D&B opportunities for occupiers. We wouldn’t expect to see any speculative development before the end of this year but these sites all have the potential to provide bespoke solutions to incoming occupiers.”
There has been considerable interest in smaller units in the region too where landlords have adapted to changing market conditions by offering more flexible lease terms.
Caterpillar Logistics has taken a 40,000 sq ft unit at Gildersome Spur industrial and distribution estate in south Leeds. “Cat downsized from 100,000 sq ft to 40,000 sq ft,” says Paul Mack of DTZ, which is marketing the scheme. “It’s an interesting trend in the local logistics market, and one that we could see more of.”
