They may not be mega sheds topping 750,000 sq ft but big sheds are still popular with developers in the North West, with some 15 schemes providing sheds over 300,000 sq ft. In fact so strong is the market that there is a frenzied trade among developers and investors to secure these properties before they have even been let.
This can make it difficult for occupiers who are also looking for freeholds. John Sullivan of Knight Frank says: “There are quite a lot of people looking to buy freehold especially those looking at around 100,000 sq ft. However investors and developers want to let. There are one or two properties for sale but prices are high as developers outbid to acquire then to turn and let.”
Bilsdale Properties has sold its newly refurbished 470,352 sq ft Magnum @ Walker Park warehouse in Blackburn to Beva Investments for £10.5m without a tenant.
The building, which formed part of the Walker family’s original steel stockholding warehouse, built in the seventies and eighties, has 8-12m eaves; the potential to incorporate substantial dock level loading provision; floor loadings of up to 50 Kn/sq m; office accommodation of up to 32,430 sq ft; as well as the ability to accommodate both industrial and warehouse users.
The development which has been renamed, Beva @ Walker Park, adjoins Junction 5 of the M65 motorway network, which in turn provides rapid access to the regional motorway network. Beva is offering the building on a freehold or leasehold basis, either as a whole, or sub-divided into units from 80,000 sq ft upwards.
Fred Chadwick of Beva says: “The development will offer occupiers the rare opportunity to acquire virtually new warehouse accommodation on a freehold (or leasehold) basis, at a substantial discount to new build prices.”
King Sturge and Taylor Weaver acted for Bilsdale Properties on the sale and have been retained by Beva as joint marketing agents for the new scheme.
And it’s not just national developers getting in on the act. Manchester-based Russells Construction has recently launched Excalibur at Kingmoor Park in Wrexham. The 260,000 sq ft distribution facility has just had 8,000 tonnes of concrete poured into an area the equivalent of four premiership football fields to create a floor with a 50kn/sq m loading suitable for high level racking.
Letting agent David Newman of Matthews & Goodman already reports strong interest in the premises, which is available on leasehold or freehold terms.
Not quite on the same scale but certainly reflecting the huge demand from investors, comes recent news that North West property company Hollins Murray Group snapped up a 35,000 sq ft unit known as Ripley House in Knowsley just days before it was due to go under the hammer in a property auction.
Nick Casson of HMG says that the 35,000 sq ft unit is currently vacant but “its popularity has already been proven by the amount of interest we have had from potential tenants.”
He adds: “This deal also highlights our belief that rents in areas of Merseyside, such as Knowsley are capable of strong growth and we will be looking to make further acquisitions in the region in the future.”
And it is this that really makes sense of all the speculation. Rents are rising, as are land values. Newman says: “Rent levels and freehold values are rising in the North West. This is driven by an increase in land values and increase in build costs, principally because of the increase in steel prices and conforming to new building legislation.
“The Valley Court scheme at Midpoint 18 is an example of rising values as since conception to practical completion, capital values have probably increased from circa £65 per sq ft to £80 per sq ft and we anticipate achieving values beyond this in the next phase. Although this is only a small scheme we have sold or let nearly all the accommodation at Valley Court.”
Valley Court consists of 11 units built ranging in size from 3,750 sq ft to 7,500 sq ft. Joint agents are Matthews & Goodman and Lamonts.
Andrew Pexton of GVA Grimley says: “Land prices have risen, quite simply due to a shortage of land. About two years ago values were in the order of £150,000 to £300,000 per acre. In the intervening period land values have increased more in poorer locations due to the simple fact that there is more land available, which therefore enables the development of larger buildings. We now see normal land values of £200,000 to £250,000 per acre up to in excess of £400,000 per acre.”
“Rents have risen marginally,” adds Mr Pexton, “but the main premium being achieved is as a result of yield compression, which has enabled developers to pay more for the land.”
It is this that allows the developers to build, and to build speculatively at that, providing occupiers with more choice. Pochin is well underway with its 350,000 sq ft warehouse at Midpoint 18 with financial backing from Northridge Capital. Lamonts and Matthews & Goodman are joint agents at the site. The cross-docked property boasts 14m eaves to underside of haunch, a 60kn/sq m floor loading with parking for 30 trailers and 150 cars. There are currently 36 dock levellers but there is planning for up to 48. Both yardage and the number of trailer and car parking spaces can be expanded says Mr Newman. “There is also planning for a gatehouse, vehicle wash and fuel station. We are quoting £4.75 per sq ft.”
According to developers the warehouse is part of a commitment to deliver the scheme following an increase in requirements ranging from 275,000 to 375,000sq ft.
Jim Nicholson, director at Pochin says: “Developers must respond to current market conditions and cater to the larger requirements of distribution companies. We are delighted to be doing that with the new unit, which will strengthen Midpoint 18’s standing as a true distribution destination.”
Howard George of DGI Davis George agrees: “Occupier requirements in the North West distribution market have changed this year, with tenants looking for properties in the 200,000 to 400,000 sq ft region. This is particularly relevant with schemes such as Rosemound’s Pioneer Point in Ellesmere Port, where we have noticed our enquiries gearing towards 300,000 sq ft and upwards.
“Pioneer Point is situated in an excellent location and potentially offers all of the requirements of a regional distribution centre, with the added bonus of low cost labour and a large supply of employment. We have noticed from our research and enquiries that RDCs tend to be at the smaller end of the scale and are therefore prepared to tailor the building to the relevant tenant.
“That said, the market still needs the option of a so-called super shed and we continue to market the product as a 625,000 sq ft unit on a national basis, as the scheme is one of only two of this size in the region.”
Pioneer Point is a 625,000 sq ft cross-dock facility with 62 dock levellers and 18 level access doors. It has 55m yards and 76 lorry trailer and 316 car parking spaces.
The building also boasts 20,000 sq ft of offices as well as 18m eaves, which can accommodate128,000 pallet spaces with VNA racking or 70,000 pallet spaces with a reach truck. DGi Davis George, Lamont and Co and M3 are joint agents at the building.
The other mega shed in the vicinity is Gladman’s The Vault, which it recently launched on the market with the benefit of being able to acquire the whole building on a freehold basis.
The £35m development totals 618,839 sq ft and is at Peel Holding’s Liverpool International Business Park, next to Liverpool John Lennon Airport in Speke, South Liverpool. “We are the only developer with a large new distribution warehouse in the North West, prepared to sell the freehold,” says Kevin Edwards, director of Congleton-based Gladman Developments.
The Vault has 15m eaves, 54 dock levellers and 2 level access doors with a floor loading of 65kn/sq m. It can accommodate up to 159,980 pallets with a narrow aisle configuration. In addition, it boasts 15,481 sq ft of modern office space with suspended ceilings. Outside it has 110 lorry and 370 car parking spaces within a secure fenced yard. It is available for lease at circa £4.25 per sq ft through letting agent DGI Davis George. The scheme is expected to provide up to 600 new jobs.
Edwards says: “The North West in general, and Merseyside in particular, provides excellent value for logistics companies looking for large distribution warehouses. Declining manufacturing and process industries are providing skilled workforces used to working a three shift pattern which are ideally suited to distribution labour requirements.”
Edwards continues: “The site is strategically located at the edge of the Liverpool conurbation. Its proximity to Liverpool docks is a major advantage for retailers, many of whom now import a large proportion of their products.”
Liverpool International Business Park is close to the M62 and the national motorway network.
So strong is Gladman’s belief in the strategic nature of The Vault that it is planning to speculatively build a 360,000 sq ft unit at Manor Park on the A558, close to Junction 11 of the M56, which Gladman acquired from English Partnerships. It will be known as G.Space 360 and sole letting agent is Lambert Smith Hampton.
David Gladman of Gladman, says: “Manor Park is a well established and strategic location on the national motorway network and close to the Irish Sea ports.”
David Newman of Matthews & Goodman reiterates the importance of location: “Drivetimes, the proximity to motorway junctions and good labour supply are all-important factors in logistics providers’ decision-making process. Midpoint 18 ticks all these boxes – Pochin’s landmark site is excellently located within two miles of junction 18 of the M6 motorway, and the possibility of reaching Glasgow and parts of Devon from Midpoint 18 within a 4.5 hour drivetime is key for HGV tachographs regulations.”
It was just this that helped in the decision making process of Blackburn based Inter Link Foods when it secured Evans Property Group’s South 62, a 179,200 sq ft warehouse in Warrington.