The M4 corridor is beginning to see signs of improvement with a number of supermarkets showing serious interest in the area, plus the news that DIY retailer B&Q is seeking planning permission for a site at Gazeley’s G.Park Swindon.
The company, which is owned by Kingfisher, is set to build a new 797,000 sq ft distribution centre on the site as part of its plans to consolidate distribution in the south of England. It is also closing five sites in the North West and Midlands.
Additionally, there are still unsatisfied requirements for the Co-op and Asda, both of which are looking for 400 – 500,000 sq ft. “The area has been dominated by food retailers of late,” says Paul Baker of King Sturge.
The Co-op is thought to be more advanced in its search than Asda, but there are differing reports in the industry about exactly what stage it is at.
It is understood that the retailer currently has a shortlist of two to four properties around the Avonmouth area. It has been speculated that the Co-op will come to a decision by the end of the summer, if not before.
Asda is still believed to have four or five options on its shortlist but is likely to be at the due diligence stage over the course of the next few months.
“There is a definite buzz around Bristol,” says James Haestier of Colliers International. “The western end of the M4 is seeing quite a bit of activity. Things are still difficult but over the past three to four months there has been some positive activity out there, which can only be a good thing.”
Take up of industrial property in Bristol fell to 2.1 million sq ft during 2009 – its lowest level in five years, according to figures released by the Bristol branch of the Industrial Agents Society (IAS) in March.
Baker reckons the situation for 2010 will depend largely on the big supermarket deals. “If Asda and Co-op secure something this year it will have a huge impact, if not it will be a similar picture to last year. We haven’t got the overhang of space that some other regions do, so in a lot of respects what is needed is for existing stock to get taken up, which will mean people will start looking at design and build options.
“Speculative development will come – probably not in the next six months, but pressure is building as there’s very limited availability of existing space, with the exception of Crossflow 550, 4mation on Cabot Park and the old focus unit, but that’s pretty much it.”
ProLogis’s Crossflow 550, which is also at Cabot Park, has 12m eaves with eight level access and 50 dock level loading doors, along with 172 HGV and 403 car parking spaces. It is less than two miles from Junction 18/18a of the M5/M49 and ten miles from the M4/M5 interchange. It is available to let at a quoting rent of £5.75 per sq ft. Savills and Knight Frank are marketing the property.
The 4mation building offers 164,880 sq ft, and has 16 dock and one level access doors with an eaves height of 12m. It is available leasehold at a quoting rent of £6 per sq ft or freehold at £67.50 per sq ft. Joint agents are GVA Grimley and Colliers International.
On the second-hand front, the 246,696 sq ft Former Focus Facility has 12m eaves with 15 dock and two level access doors and is available at a quoting rent of £5.95 per sq ft. Joint agents are BNP Paribas Real Estate and King Sturge.
“Generally there is a shortage of stock in the market because no-one is building anything,” says Haestier. “Developers are holding sites as sites for the time being rather than building on them. Occupiers are realising that the amount of stock available and the deals available won’t be around in six to nine months.”
While space might be tight in Bristol, Baker reckons: “There is significant competition at places like Chepstow, and in Swindon where there has been the suggestion of rents as low at £2.50 per sq ft. If you can be flexible then there are more deals elsewhere.”
The Big Ram, the former Woolworths depot on the Dorcan Industrial Estate in Swindon, is now being offered freehold at £15 per sq ft. The 612,680 sq ft facility has been on the market for the past six months at £2.95 per sq ft leasehold.
It boasts 38 dock and six surface level loading doors with a minimum eaves height of 6.5m rising to 11.5m at the apex. It is located two miles from Junction 15 of the M4 motorway. Colliers International and CB Richard Ellis are joint agents.
Also in Swindon, Legal & General’s 7.1-acre K145 Keypoint site is available to buy or rent for a 142,500 sq ft design and build property. Whitmarsh Lockhart and DTZ are promoting the site.
Elsewhere, ProLogis has been granted detailed planning consent for 511,595 sq ft at ProLogis Park Newbury. The site is situated three miles south of Junction 13 on the M4 motorway and will offer a number of build to suit facilities from 36,000 – 180,000. Cushman & Wakefield, Lambert Smith Hampton and Colliers International are joint agents.