With dwindling supply, what options are there for occupiers in the West Midlands?
The latest research doesn’t make for good reading for occupiers looking for good quality immediately available space in the West Midlands. To be blunt only a handful of buildings remain on the market and even some of those are now under offer.
According to DTZ’s latest Property Times report Grade A availability stands at just 2.7 million sq ft in 11 buildings over 100,000 sq ft.
David Binks of Cushman & Wakefield says: “To put it frankly there is a distinct lack of availability, there isn’t enough about and there is very little choice.”
Recent deals reducing the Grade A supply further include the letting of Goodman’s 213,240 sq ft First Point warehouse in Burton-on-Trent, Staffordshire to arts and crafts retailer Hobbycraft.
The speculative building boasts 18 dock and two level access doors as well as a 12m eaves height. It has a 50m yard and a floor loading of 50kn/sq m. It was being marketed with a quoting rent of £5.25 per sq ft. It is thought Hobbycraft has taken a 15 year lease.
BNP Paribas, Jones Lang LaSalle and Savills are leasing agents on First Point, Burton. Hobbycraft was represented by CBRE.
Neil Starkie of Savills says: “There has been a lot of activity recently and there are a lot of buildings under offer and if they were all to go there will pretty much nothing left…”
These include Gazeley’s G.Park Blue Planet at Chatterley Valley. The 387,762 ft warehouse has 15m eaves and 38 dock and two level access doors with a floor loading of 50kn/sqm. Joint agents are CBRE and Lambert Smith Hampton.
Then there is PRUPIM’s 120,150 sq ft The Hub at Witton Road being marketed by Knight Frank and CBRE; and F&C REIT’s 104,000 sq ft Eagle at Fradley Park which boasts eight dock and four level access loading doors with canopy, 12m to underside of haunch and secure service yard. It also has 2,500 sq ft of offices and 99 car parking spaces. Letting agents are GVA, CBRE and Kingston.
With so much under offer and so little available Ranjit Gill of BNP Paribas notes that occupiers could face tricky lease negotiations: “Buildings are scarce and even on second hand units occupiers will get very little incentive on a five year lease. The market has moved on significantly from days gone by with most landlords with good buildings holding out for higher rents and stiffer lease terms. Even non-prime location buildings are being held for full rents.”
Indeed Simon Norton of Colliers says: “Landlords are being a lot more bullish; the standard incentive of a 12 month rent free for every five years of lease has dropped to only six to nine months’ rent free.”
According to DTZ, incentives will continue to harden with the erosion of Grade A and good quality second hand stock. “Tenant friendly deals for these grades will be increasingly hard to come by.” The research predicts 1.4 per cent a year rent increase across the board until 2016 with some areas of short supply looking to expect even higher rent increases.
That is, of course, if you can find a suitable building that is not already under offer. The majority of buildings available in the West Midlands can be found in Staffordshire and include Goodman’s Citadel at Junction 10 of the M6 motorway totalling 321,000 sq ft. It has 12m eaves, two 50m yards as well as 28 dock and four level access doors and a 50kn/sqm floor loading. Letting agents are Bulleys, Knight Frank and Jones Lang LaSalle.
There is also Standard Life’s 302,693 sq ft The Duke on Wellington Road in Burton on Trent, built in conjunction with Anson Properties, boasting a 12m eaves height, 24 dock and four level access doors, a 50m deep yard and 15,000 sq ft of two-storey offices. It is being marketed by CBRE and GVA.
One of the larger modern buildings available in the region is Alto415 in Newcastle-under-Lyme. The 415,000 sq ft warehouse boasts 15.6m eaves, 36 dock and two level access doors, 56 HGV and 205 car parking spaces on a 20.4 acre secure site. Letting agents are Moriarty & Co, CBRE and Jones Lang LaSalle.
Close by is Blackstone’s 184,910 sq ft Radial Point warehouse at Stoke on Trent – a fully fitted out unit with 12 m eaves 17 dock and three level access doors and fully fitted office accommodation. It is available through joint letting agents Dowley Turner Real Estate, Moriarty & Co and CBRE.
There is also the 105,000 sq ft Maximus building being marketed by Lamonts and Jones Lang LaSalle and ProLogis’ 180,000 sq ft MW180 unit at Midpoint, Middlewich which is being marketed by Lambert Smith Hampton.
John Ryan Gill of Knight Frank points out that Kingswood Lakeside 127 near Cannock is still available. The property totals 127,538 sq ft has 12m eaves as well as 10 dock and two level access doors. Letting agents are Knight Frank and BNP Paribas.
Second hand sheds offer more scope for occupiers but any that are of good quality are quickly being snapped up. Gerald Eve is marketing the 603,000 sq ft Peugeot facility known as Coventry DC and already has strong interest. Quoting rents are believed to be in the region of £2.75 – £3.50 per sq ft.
North Rae Sanders is marketing one the largest second hand buildings in the country the 594,000 sq ft former Focus warehouse in Tamworth on behalf of London & Stamford. The building has had a £6 million fit out and is fully racked with 50,000 pallet spaces. It has 10.4m eaves as well as 64 docks and 10 scissor lifts and boasts a 60m yard and parking for over 100 trailers and currently being refurbished to bring it up to standard. Joint agents are Dowley Turner Real Estate. Quoting rent is £5.25 per sq ft on a 10 year lease.
Another large second hand unit is the former Co-op building at Valley Central in Rugby totalling 334,000 sq ft. It has 12m eaves, 30 docks and a quoting rent of £5.25 per sq ft. Letting agents GVA and Savills say the lease length can be flexible.
At Nuneaton the receivers have Attleborough House, a 163,581 sq ft warehouse on a 9.8 acre site through letting agents White Druce & Brown and North Rae Sanders. The property has 14,554 sq ft of offices, 10 dock levellers as well as 12m eaves.
Cushman & Wakefield have a 279,000 sq ft former Sainsbury’s warehouse available known as the Triangle in Coventry.
The facility boasts 7.3m eaves, 14 level access doors, heating, PIR lighting and roof mounted sprinklers as well as four overhead Mattison cranes. It also has fully fitted offices. Outside the property is served by a 60 m deep yard and has parking for 438 cars. There is also the potential to expand the yard and rear site boundary subject to planning. Joint letting agent is North Rae Sanders.
“With buildings dwindling away, occupiers are being forced to consider Build-to-suit,” says Binks. Luckily adds Starkie: “there are a number of sites with planning or in planning awaiting decisions.”
Deliver fastest
Those able to deliver fastest include Hamdon Gate’s 16 acre Central Park scheme in Rugby which it acquired off ProLogis.
The site includes the three remaining development plots on the park. Two plots have detailed planning consent for distribution facilities of more than 93,400 sq ft and approximately 119,700 sq ft, although buildings of up to 140,000 sq ft can be accommodated subject to planning. The third plot, which is located at the front of the site, is suitable for industrial buildings from 20,000 to 60,000 sq ft subject to planning consent. ProLogis has completed the site infrastructure works, which include development plateaus and entrance points for the main plots.
Matthew Small of Hamdon Gate says: ““We are focusing our attention on sites that are ready to be developed in prime locations, where there is a shortage of available buildings. We are looking for further opportunities to position ourselves for the next development cycle. We have already appointed contractors and we are able to deliver industrial/warehouse buildings within a 28 week timetable.”
Letting agents North Rae Sanders, Drake & Partners and Jones Lang LaSalle are quoting from £5.65 per sq ft.
Another site that could offer an immediate start is Opus Land and new development partner St Francis Group’s Blueprint scheme at Junction 9 of the M6 Motorway. There is planning for a 474,500 sq ft facility on the 22 acre site. Letting agent are Jones Lang LaSalle, Cushman & Wakefield and DTZ.
There are other sites that could deliver in an 18 month to two year schedule these include IM Properties Birch Coppice that could accommodate up to 600,000 sq ft through letting agents CBRE and Colliers while ProLogis has just acquired a further 33 acre site from Ryton Properties, extending ProLogis Park Ryton to a total of 98 acres. Infrastructure work is already underway opening up the site for buildings in a range of sizes. It has planning for three units of 300,000 sq ft, 375,000 q ft and 500,000 sq ft. Jones Lang LaSalle, Gerald Eve and North Rae Sanders are joint letting agents.
ProLogis Park Sideway can take a cross dock unit of 530,000 sq ft and its plot at Fradley Park known as ProLogis Park Lichfield can take up to 800,000 sq ft.
Gazeley has several sites in the West Midlands including G.Park Stoke that could take 562,000 sq ft; G.Park Tamworth which could accommodate an 80,000 sq ft unit on a 4 acre site and G.Park Ashby which could accommodate up to 850,000 sq ft on a 60 acre rail connected site.
Other large schemes include Bericote Properties’ Bericote Four Ashes at Junction 12 of the M6 motorway totalling 53 acres that could accommodate a million sq ft in a single unit. Jones Lang LaSalle and DTRE are letting agents then there is First Industrial’ Prime 10 scheme at Junction 10 which could take units over 400,000 sq ft. It is being marketed by Jones Lang LaSalle and Leighton High. IM Properties could accommodate up to 600,000 sq ft on its Birch Coppice scheme through letting agents CBRE and Colliers. St Modwen has sites at Longbridge, Coventry; Barton near Burton upon Trent, Hilton, Swadlincote, Worcester and Washwood Heath.
In Birmingham PRUPIM has 60 acres of developable land remaining at The Hub that could accommodate up to a million sq ft. Letting agents are CBRE and Knight Frank
Around Coventry Roxhill is promoting its Coventry gateway scheme with joint venture partner Rigby Family Holdings which is headed by Sir Peter Rigby the owner of Coventry Airport where the development is proposed.
Controversy
Plans for the £250 million business park have been submitted to the Warwickshire Council and Coventry Council for consideration and include up to 4.4 million sq ft of development. The scheme is made up of two separate plots. The southern 180 acres is capable of providing 3.6 million sq ft of large B2/B8 warehousing, while the 67 acre plot facing the A45 has the potential for a variety of B1 a) b) and c) configurations, along with hotel and other ancillary uses.
The plan has caused controversy not least because much of it is proposed on green belt in addition there could be a conflict of interest with Coventry Airport owner Sir Peter Rigby who is also the chairman of the Coventry and Warwickshire Local Enterprise Partnership (LEP).
Roxhill also has a 90 acre site in Rugby known as Rugby Gateway which it intends to bring forward with joint venture partner SEGRO. The site has a resolution to grant outline planning permission, subject to the conclusion of negotiations on the Section 106 Agreement. The planning application limits the floor space to 904,000 sq ft of B8 and 506,000 sq ft of B2 accommodation.
