Thursday 8th Dec 2016 - Logistics Manager

It’s a long, long road

Liza  Helps looks at the opportunities available along the M6 corridor for the savvy occupier.

The northern M6 has seen a bit of a renaissance in the last couple of years as developers seek to secure development sites to fulfil growing and perceived demand.

This has been boosted by news that planning consent has been granted for a £90m post-Panamax container terminal at the port of Liverpool, which is expected to double container activity by 2011. In addition there has been improved road and motorway networks in the area that have made sites along the M6 more accessible, increasing the desirability of even the less glamorous locations.

These alternative, comparatively cheaper locations include areas of Cheshire and locations along the M6 such as Middlewich, Northwich, Wigan, Skelmersdale and Haydock.

Land values in locations around the M6 are slightly lower than in Trafford Park and Warrington, which are in the region of £350,000 plus per acre.

Further enhancing the desirability of these locations is the labour availability as occupiers are finding that in the prime areas labour is more transient, which has its own inherent problems of retaining staff on a regular basis and having to pay a higher hourly rate to attract new staff. These problems are not encountered in areas such as Cheshire which tend to secure a much more loyal labour force.

HelioSlough has its 128-acre Revolution site in Chorley, where it has already secured Wolseley UK and Multipart. Two high quality buildings are now available; R2 comprising 198,000 sq ft, and R4 totalling 232,000 sq ft.

Sustainability is a key aspect of the development, each building incorporates leading architectural design, and achieves a BREAMM “very good” rating. Sustainable construction and design features are integral.

Specification

R2 boasts 12m eaves, 18 dock and two level access doors with a yard depth of some 60m as well as 23,817 sq ft of offices across three storeys. It also has 105 car and 28 HGV parking spaces within a secure 10.46-acre site. R4 has a similar specification but has 20 dock, two level access and two retro fit doors. Joint letting agents are M3, King Sturge and Bailey Deakin & Hamiltons.

HelioSlough has also secured a 35-acre site as preferred developer on the Preston East Employment Area located on Junction 31A of the M6, four miles east of Preston.

Plot A3 and Plot B, for which HelioSlough bid £12 million, has outline consent for approximately 700,000 sq ft of industrial/distribution. The developer is fine-tuning the plans and could be on site by summer 2009 once issues regarding the widening of the motorway junction have been sorted.

According to Gerald Eve’s Prime logistics report: Merseyside and Cheshire currently suffer the highest availability rate out of all the regions – mostly due to a spate of speculative development that have come to the market in the past few years – with some million sq ft recently completed or due to complete soon.

Gazeley and ProLogis both have units of 360,000 sq ft underway at G.Park Liverpool and ProLogis Park Crewe respectively. On completion they will be competing with Gladman’s recently completed 360,000 sq ft G-Space360 at Manor Park Runcorn.

Gazeley’s speculative unit in Liverpool boasts 35 dock levellers, 15m eaves, a 50m yard as well as host of eco initiatives. Letting agents are CB Richard Ellis and King Sturge.

There is planning for 890,000 sq ft in total but Gazeley has said it is seeking pre-lets on the remaining units. A single unit of up to 600,000 sq ft could be accommodated.

The approved plans for the buildings include a number of eco-effective measures such as rain water harvesting and recycling, energy efficient lighting, solar panels, low water use appliances and FSC-approved timber, all provided as standard fit out by Gazeley.

These environmentally friendly features of the design will not only reduce the environmental footprint of the buildings, but also deliver significant annual operating cost savings of over £10,000 to customers through reduced energy consumption.

Eco initiatives

Gazeley is also marketing its 45-acre G.Park Skelmersdale site close to Junction 26 on a pre-let basis only. It has planning permission for two D&B warehouses; one of 247,000 sq ft, which would boast 20 dock and three level access doors and one of 488,215 sq ft, which would have 32 dock and four level access doors. Both units would benefit from 12m eaves, a 50kN/sq m floor loading and a yard depth of 50m as well as a host of eco initiatives. Letting agents are GVA Grimley and Colliers CRE.

ProLogis’ unit at Crewe is known as ProLogis360 and comprises a 336,906 sq ft warehouse with 15m eaves, two-storey offices of 18,804 sq ft, a 4,000 sq ft hub office and gatehouse. There are two level access doors, 32 dock levellers, a 50m service yard, 51 trailer parking spaces and parking for 262 cars; secure, fenced yard and landscaped surroundings.

The environmental specification includes a carbon neutral envelope, 15 per cent roof lights, minimised air leakage, lower energy light fittings in the offices and water harvesting measures and a BREEAM minimum “very good” rating. Joint letting agents are North Rae Sanders, Lamonts and CB Richard Ellis.

Julien Kenny-Levick of Colliers CRE says: “It is fair to say that some developers/landlords are beginning to feel rather anxious about their large vacant distribution units along the M6 Corridor. However, they are certainly not panicking yet as demand for circa 300,000 sq ft plus facilities has increased of late with at least three very serious requirements looking for this size or more.”

Steve Brittle of Atisreal adds: “Occupiers may be taking a little longer to secure deals but there are still contracts to serve.”

Following the successful letting of its 150,000 sq ft distribution warehouse at Orion Park to Bentley Highcross, Graftongate Developments has been keen to progress with the remainder of the site and has submitted a planning application for the final phase of development.

Tesni Rutherford of GVA Grimley, joint letting agent for the development alongside agents Lamont, says: “New developments like Orion Park are essential to the long term prospects of localised industry.”

Development

Kenny-Levick says: “In terms of new development activity this will be limited to key locations with good logistics links.”

Such a development is ProLogis’ Parkside scheme at Newton-Le-Willows close to Junction 22. The 672-acre site is being promoted as a rail freight interchange park and is strategically located at the cross roads of two main rail lines – the West Coast and the Trans-Pennine. The developer is looking to secure planning for almost eight million sq ft of warehousing.

Kenny-Levick says: “It is fair to say that as an occupier in this sector at present there is a good degree of choice along the M6 Staffordshire/North West border with the likes of Gazeley, ProLogis, Pochin and Gladman vying for this business.”

Gazeley has quite a few developments in Staffordshire. At present it is busy building Phase One of its Blue Planet scheme close to Stafford with completion due in December.

Located close to Junctions 15 & 16 of the M6, this 387,762 sq ft carbon positive development features its own bio-fuel micro power station fuelled by rape seed oil and other organic materials, 39 per cent energy usage savings, 60 per cent water usage savings, kinetic energy plates installed in the access road produce power when driven over by vehicles entering or leaving the site and an estimated operating cost savings of around £300,000 a year.

A little further south, the developer has the UK’s largest speculative industrial development currently under construction in Staffordshire.

‘Flair’ is a 700,000 sq ft speculative building at G.Park Rugeley, which is due for completion in November this year and could provide up to 700 jobs for the local area once operational.

Located at G.Park Rugeley, a joint venture between Gazeley and MetLife, this is the first warehouse to be delivered on the site and once completed, it will be the only distribution building of its size available in the Midlands as well as being the UK’s largest speculative development.

Investment

Nick Cook, development director at Gazeley, says: “This development further enhances our presence in a crucial logistics region in the UK, and signals our continued investment in the area. The site will prove to be attractive to our customers due to its strategic location and economic rental levels.

“G.Park Rugeley highlights Gazeley’s ability to secure and deliver key logistics developments and illustrates our continued confidence in occupier demand for speculative development within the UK industrial market.”

Flair at G.Park Rugeley will be available to occupiers on both a freehold and leasehold basis through letting agents M3 and Burbage Realty.

ProLogis also has a variety of units and development opportunities in the area including ProLogis Sideway near Stoke, which is being marketed by joint agents King Sturge and North Rae Sanders. The developer has detailed planning for the 532,631 sq ft cross-dock eco shed at a quoting rent of £5.25 per sq ft.

“In addition,” says Robert Rae of North Rae Sanders, “we have six acres to the rear for small units ranging from 3,000 – 25,000 sq ft totalling 106,000 sq ft on freehold and leasehold terms at £5.75 per sq ft or £80 per sq ft freehold.”

Immediately available is DC3 at ProLogis Park Stoke totalling 380,000 sq ft. The unit has 12m eaves height, 24 dock and two level access doors as well as 339 car and 39 HGV spaces. Letting agents are North Rae Sanders, Lamonts and GVA Grimley.

There is also DC2 and DC4 at ProLogis Park Stafford. Positioned at J14 of the M6, in the central M6 corridor, the park has already attracted Screwfix, which has occupied DC1 – 544,685 sq ft and Altecnic which has purchased DC3 – 70,270 sq ft. DC2 totals 127,845 sq ft and DC4 some 230,347 sq ft.

As well as brand new stock there is also Stafford 88, an 88,000 sq ft refurbished warehouse with ten metre eaves owned by LaSalle. Joint letting agents North Rae Sanders and Atisreal are quoting £4.50 per sq ft or offers circa £6m for the freehold.

Close to Junction 12 Wrenbridge and Gleeson has completed Kingswood Lakeside 127, a 127,500 sq ft warehouse with 12m eaves and ten dock-level and two level access loading doors. There are 7,000 sq ft of highly specified offices, secure parking for 126 cars and 40 lorries and the potential to increase the amount of parking and storage by expanding the current 50m rear yard to up to 114 metres giving an average depth of 80m.

Immediate

The warehouse is immediately available either freehold or at an annual rent of £5.50 per sq ft through joint agents North Rae Sanders and King Sturge.

Although not yet built Fradley Park boasts planning consent for a 430,000 sq ft unit known as Hercules. Letting agents GVA Grimley and North Rae Sanders are quoting £4.95 per sq ft.

A little further south Opus Land has just secured a letting at its Opus 9 scheme near Wolverhampton.

Gareth Williams of Opus Land says: “Point 1 has been let to BTC Active Wear, which is taking a new ten-year lease at £5.50 per sq ft. There is a reasonable rent-free period and a five-year break clause.

“We still have space available for a single unit of up to 460,000 sq ft but we will not be speculatively building it.”

However, the developer is rolling out enabling works so that, should an occupier be interested, construction could start immediately on a bespoke basis.

In Birmingham PruPIM has launched the first speculative unit at The Hub. Unit 1 offers 120,150 sq ft of high specification accommodation space on a landscaped, fully secured estate. Marketed by Knight Frank, and joint agents M3, it is set on a 90-acre site just three miles from the city centre and 1.6 miles from Junction 6 of the M6 motorway. The Hub can accommodate up to 1.5 million sq ft of warehouse and production space.

Recently completed is SEGRO’s Meteor Park, which is next to Junction 6 of the M6 and three miles from Birmingham city centre.

Suitable for B1, B2 and B8 Use Classes, the scheme comprises four self-contained industrial/warehouse units, which have been built on the former Delta Metals site. The units are 22,235 sq ft, 37,042 sq ft, 58,609 sq ft and 115,607 sq ft respectively. The range of unit size coupled with Meteor Park’s location has created a good deal of interest from a range of occupiers.

There is also Big Blue totalling 202,000 sq ft close to Junction 6 of the M6 motorway. It boasts 18.5m eaves with 16 dock levellers and is cross-docked. It is part chilled and part racked out. The owner is looking for an assignment or sub-lease on the property, which is surplus to requirements. Letting agent M3 is quoting £4.95 per sq ft.

Spaghetti junction

Just off the notorious spaghetti junction is another empty warehouse: Lynx Birmingham. The 148,816 sq ft building has 16m eaves, 12 dock and two level access doors, a secure 50m yard with gatehouse and a 50kN/sq m floor loading. It is available through joint agents M3 and CB Richard Ellis at a rent of £5.50 per sq ft. Another second hand building on the market is Bermuda 157, a 157,000 sq ft former Quinton Hazel warehouse owned by Deeley Properties.

Ranjit Gil of Atisreal says the building boasts 9m eaves has three acres of expansion land and that the owner is not necessarily looking for a premium rent. In fact it is offering the building on leases from six months and is quoting £3.75 per sq ft. Atisreal and North Rae Sanders are joint agents.

In Rugby there is ProLogis’ Central Park Phase II, totalling 25 acres, which has detailed consent for three units of 93,500 sq ft, 119,700 sq ft and 161,000 sq ft. Alternatively the developer would consider a scheme on a D&B basis up to about 200,000 sq ft. North Rae Sanders, Drake Commercial and Bidwells are quoting rent £5.95 per sq ft.

It is fair to say that as an occupier in this sector at present there is a good degree of choice along the M6 Staffordshire/ North West border with the likes of Gazeley, ProLogis, Pochin and Gladman vying for this business.

Point 1 has been let to BTC Active Wear, which is taking a new ten-year lease at £5.50 per sq ft. There is a reasonable rent-free period and a five-year break clause.