Current conditions have forced landlords in the North West to be a little more creative, but there is life in the market yet, says LUCY TESSERAS.
The property market, as with everything else today, is going through a period of change. “The market is not the best at themoment,” says Jason Print of Cushman& Wakefield, “but that’s stating the blindingly obvious. There has undoubtedly been a tail off in demand, but there is still activity out there and a number of deals being done. On the plus side, the industrialmarket has not been hit as hard as othermarkets. There is still life in it yet.”
Generally speaking, the level of enquiries in 2009 has dropped by around 30 per cent compared to 2008, so landlords are having to offer more flexible deals in order to satisfy occupiers’ needs, and while headline rentals have remained static, the level of incentives has increased. Print says: “Many are nowoffering two or three years rent free, or 18 months on a ten-year lease.”
Steve Johnson of King Sturge suggests landlords are having to respond quickly to changing market trends. “Previously, landlords on new builds were only prepared to do long-termdeals and were offering properties as they are, but now shorter-term, flexible leases and rentalised fit-outs are being offered.”
However, several big sheds are rumoured to be under offer in the area. A third party logistics contractor is thought to have put inanoffer ona freehold basis forManor Park 360, a 360,000 sq ft facility in Runcorn, and a 208,000 sq ft property at Trafford Park is believed to be under offer on a leasehold basis.
Retailer JD Sports is in the midst of another big deal and is looking to move into a 600,000 sq ft site at Kingsway Business Park in Rochdale. A decision is due to bemade shortly.
Johnson says: “There have not been any deals on new builds so far this year, so thiswill give themarket a huge boost of confidence.”
In fact, despite land values dropping by around 40 per cent, (an acre of land at Trafford Park which would have gone for between £350,000 and £400,000 a year ago is now only worth around £250,000) the number of new builds in the area has not increased.
Print says: “Developers would dearly love to be buying sites now, but they can’t get the funding. Others that do have the finances are looking, but it’s really only the big regional developers that are in a position to invest. Many are aware that land values are down but the problem is existing investments are also very good value at the moment and the likelihood is developers are going to go for the one that is producing rent now.”
It’s a worrying situation. Print adds: “In 18 to 24 months time we will get to a point where there will be no new builds available. It’s crystal ball gazing, but I would be very surprised if there were any spec builds in the NorthWest at that time.” Johnson has a similar view of the market, and says the only new build currently under construction in the area is the 128,000 sq ft Manor Park development in Runcorn, which is due for completion in June.
Available now is Unit 69 at the Stakehill Industrial Estate, which has recently undergone major refurbishment. The three-bay detached distribution unit totals 102,855 sq ft, incorporating 98,895 sq ft ofwarehouse space and 3,960 sq ft of ground and first floor offices. It is located with frontage and access to bothWhitbrookWay and TouchetHall Road in north Manchester and is on Junction 20 of theM62motorway, lying 1.5miles to the north via the A627(M).
The facility features an eaves height of 10.10 metres, seven cross dock loading doors on the western elevation and four on the eastern elevation, alongwith two level loading access doors for northern and southern elevations. The unit is being offered as a fully rackedwarehousewith the capability of holding 7,800 pallets, subject to the lease/covenant and has space outside for approximately 54 cars. Joint letting agents are King Sturge and CB Richard Ellis.
Developer Brixton has a number of smaller sheds up to 41,181 sq ft available at its Premier Park development in Trafford Park. The warehouses offer up to eight metre clear eaves height to the underside of the haunch and have floor loading of up to 40kn/sq m and a single leg point load of 80kn/sq m. Facilities also have electrically operated sectional up and over loading doors, which are five metres high and 3.5 metres wide, and dedicated yard and car parking areas.
The scheme is one mile to the south of Junction 2 of the M602 motorway and one mile east of Junctions 9 and 10 of theM60motorway.More information can be obtained from Brixton’s Leasing Centre or joint agents King Sturge and P3.