Decent standing stock along the M1 and A1 corridors south of Milton Keynes and Peterborough are as rare as hen’s teeth. The only options are to look elsewhere, accept lesser quality or else hunt down build-to-suit opportunities.
The last 12 months have seen buildings being snapped up as finally pent up demand could no longer wait. Amazon took the 20.22 acre Mammoth site on Maylands Business Park from J Murphy & Sons who acquired it for £6.4 million in 2009 for heavy plant storage. It is believed the internet retailer has secured a 15 year lease at a rent in the region of £6.50 per sq ft on the 450,000 sq ft building.
Food and drink distributor Palmer & Harvey secured G.Park Hemel. The 167,730 sq ft warehouse was let on a 25-year lease at an initial rent of £5.95 per sq ft. Letting agents are Savills and CBRE.
And SEGRO let an 88,000 sq ft warehouse at its Maylands Wood Estate to Gyron Internet for a new data centre. Brasier Freeth and CB Richard Ellis acted for SEGRO.
James Swallow of Jones Lang LaSalle says: “There is little if any quality stock.” He has let 1.3 million sq ft in buildings over 100,000 sq ft mostly secondhand or indeed secondary buildings to owner-occupiers seeking to take advantage of the market.
The deals include a 145,000 sq ft deal with removal firm Cadogan Tate, a 157,000 sq ft letting of a 1960s warehouse to Travis Perkins which intends to refurbish the unit for its own use and the relocation of print works for the Daily Express from London to Prime Point in Luton, a 150,000 sq ft shed near Luton Airport.
Of the stock that is available the majority is second hand and even that is going fast. DTZ is marketing Orion an 119,280 sq ft warehouse at the bottom of the M1 motorway. The former JVC headquarters on Staples Corner which boasts 11m eaves and 12 docks is already believed to be under offer.
Knight Frank is getting interest in the former ASOS facility in Hemel Hempstead known as Dot.com 160, a 160,000 sq ft warehouse with 230,000 sq ft of mezzanine space. The property comes with a multi-level racking system with goods lift and conveyors.
Moving up the M1 corridor there is not much in way of space. Indeed, Swallow says: “There is one building in Milton Keynes; the only speculatively built one that is left.” He alludes to Volume and PPG’s Paragon:MK warehouse totalling 139,000 sq ft being marketed by Burbage Realty and Lambert Smith Hampton.
Darren Cheeseman of DTZ notes: “Most markets are now tight, there is not a huge amount available and as usual now it is a game of trying to seek pre-lets.”
Swallow agrees: “If an occupier is looking for quality they had better go down the D&B route.”
Most locations have land available but, says Toby Green of Savills: “There are only a few key sites with planning.”
Indeed, in Hemel, says Ben Wiley of Strutt & Parker: “There is land however the problem is how to unlock it.” The land in question is held by the local authority which has in the past resisted development for distribution. However the town is extremely well connected for logistics and there are a number of enquiries.
Luckily, developer Bericote has a site in the town known as Boundary Way, which is being marketed by Dowley Turner Real Estate and Lambert Smith Hampton. It could accommodate up to 150,000 sq ft of space.
Then there is G.Park Bedford just off the newly built A421 which links the A1 with the M1 motorway. The road improvements mean the site is just 8 minutes from junction 13 of the M1. Around 13 acres remain for build to suit development up to 260,000 sq ft. Letting agents are Savills and Brown & Lee.
In Dunstable there is G.Park Dunstable where there is planning permission for a 761,000 sq ft distribution centre. The £90m scheme has been forward funded by Cardiff-based Julian Hodge Bank and Deutsche Hypo Bank. Savills and Colliers are joint agents on the 32 acre site. Canmoor also has a site in Dunstable which could take 150,000 sq ft. It is known as Quantum and is being marketed by Lambert Smith Hampton and Savills.
At Milton Keynes there is the 200-acre Magna Park located between junctions 13 and 14 of the M1 motorway. All infrastructure and services are designed and installed and with outline planning permission in place, buildings can be delivered in as little as 6 months. Buildings can be accommodated from 100,000 to 1 million sq ft. Letting agents are Savills, Burbage Realty and Jones Lang LaSalle.
Developer Roxhill has also got a site in Milton Keynes, in a joint venture with Hampton Brook the developer is looking for pre-let up to 220,000 sq ft at its 10.4 acre Centro scheme at Wymbush. Letting agents are Budworth Hardcastle, Burbage Realty and Lambert Smith Hampton.
Over on the A1 the focus is on Roxhill’s massive Peterborough Gateway scheme which could take up to 5 million sq ft. The 240 acre site can accommodate buildings up to 1.3 million sq ft. A detailed planning application has been put forward by Roxhill for a £18 million facility for Stobart Group which would include a 175,000 sq ft cross dock warehouse.
Liza Helps is Logistics Manager’s Contributing Editor, Property
Logistics Manager, January 2012