Wednesday 26th Oct 2016 - Logistics Manager

Come fly with me

Talk about property in the air cargo business and everyone thinks of Heathrow and high rents. But regional airports like East Midlands and Manchester have big plans for growth, Malory Davies reports.

In the end BAWC decided to stick with Stansted but even if it had made such a dramatic change, the impact on the property market would have been limited simply because the UK air cargo market is dominated by Heathrow. Heathrow accounts for some 60 per cent of all the air cargo traffic in the UK and Heathrow-based forwarders control much of the freight flown from other airports.

There has been some positive news at Heathrow in recent weeks with a number of high profile lettings. Brixton has let three of the units at X2, its double-deck warehouse, right next to the airport perimeter. Units 1, 2 and 3, totalling 82,683 sq ft, have been let to cargo support services company Airworld Services on a five-year lease at a headline rent of £13.61 per sq ft with the equivalent of 12 months rent-free.

However, to enable the letting, Brixton has agreed the surrender of three units at The Heathrow Estate producing £773,000 pa expiring in December 2010, and one at Fairway Trading Estate, Heathrow producing £444,000 pa expiring in November 2011. There are now five units totalling 151,698 sq ft still available at X2. Brixton has reached an agreement to lease Units 11 and 12 at The Heathrow Estate, totalling 42,018 sq ft, at £11.80 per sq ft, to Swiss Post International until February 2015. Swiss Post will benefit from three months rent-free on Unit 11 and four months on Unit 12.

Brixton’s operations director Steve Lee, says: “These lettings demonstrate a good level of activity in the market despite the difficult economic climate. In particular the transactions demonstrate our ability to work with our existing customers to help them plan and meet their space needs.”

And ProLogis has leased 75,000 sq ft to parcel carrier City Link at ProLogis Park Heathrow, a 294,000 sq ft distribution park less than two miles from the airport. City Link will use the new building as its primary distribution centre in West London.


“City Link had several facilities from which to choose in the Heathrow area and had been searching for some time,” says Andrew Griffiths, managing director for ProLogis in the UK.

East Midlands might be well behind Heathrow but it can legitimately describe itself as “The UK’s number one pure cargo airport”. It’s well positioned for such a role with its Castle Donington site next to the M1 just south of Derby. DHL and UPS both have UK hubs there while Royal Mail and TNT have support operations.

Just down the road is Wilson Bowden’s East Midlands distribution centre with some 1.4 million sq ft of space available for development. There are more major development sites around Derby including Langley 255 and Burnaston Cross.

A key part of Manchester Airport’s strategic plan for the period to 2030 is creating sites for inward investment and logistics. Manchester moved a step forward with its plans following a £15 million deal in March with property group Burford to buy 30 acres of land near the airport. The intention is to create the UK’s first “Airport City” including retail.

There are a couple of developments on the horizon that could have a major effect on the market over the next few years. Just up the road from East Midlands near Doncaster is Robin Hood, Peel Group’s newest airport. It is only four years old and £100m has been invested in creating a facility capable of handling some 50,000 tonnes of freight a year by 2014.

And Eddie Stobart has bought both Southend and Carlisle airports. Stobart reckons that Southend has the potential to become an established niche air freight destination, specifically for high-value goods. It is also well located for DP World’s huge London Gateway project at Shellhaven. The Carlisle deal gives Stobart a 460-acre site, which includes Carlisle Airport. It is planning a 360,000 sq ft warehouse to be a northern hub.