The arterial routes north from the Midlands are exciting interest from tenants keen to secure space. Developers are equally keen to bring forward a plethora of sites but will it be enough? Liza Helps reports.
There will always be demand for warehousing close to the main arterial routes in the UK but for a number of years this has been focussed ideally along the M1 corridor south of Leicester, the M6 and around the M25 motorways.
Now with economic recovery and growing consumer confidence demand for warehousing space outside the core areas is apparent and the M1 and A1 motorway corridors to the north of the Golden Triangle are affecting keen interest but occupiers could be in for a shock – there is suddenly very little available space.
Andrew Gent of Gent Visick says: “South Yorkshire alone had upwards of 4.4 million sq ft of built space in 2008/9 and of that there is nothing left. We have gone from a situation of oversupply to huge undersupply.”
Mike Baugh of CBRE agrees: “Existing stock is rapidly diminishing. In fact we have just been appointed by Helical Bar on the only unit currently available in the South Yorkshire market of 100,000 sq ft plus.”
The property known as ASPECT at West Moor Park Doncaster is currently occupied by retailer NEXT and will not be vacant until November. Such is the pent up demand says joint agent Toby Vernon of CPP, that the unit is being marketed at a rent of £4.95 per sq ft, some 70 pence per sq ft more than when it was originally let. “The response has been really strong and we are confident of having a tenant lined up at that rent or close to that. It is a testament to where the market has been and the existing tenant has not even moved out of it yet.”
This is good news too for the only other available new building in the region, the 535,732 sq ft Sherburn 550 mega shed at Anglesea Capital’s 1.4 million sq ft Sherburn Distribution Park. It is being marketed by joint letting agents CPP, DTZ and Moriarty & Co.
Recent lettings have seen building and plots snapped up along both the M1 and A1 corridors with Howdens snapping up the 137,000 sq ft Strata Building, marketed by CBRE and Gent Visick, at Thorne on a five-year lease at £4.50 per sq ft. In addition the last unit at Standard Life’s First Point scheme is under offer and there has been two huge pre-lets recently recorded with Poundworld taking a 525,000 sq ft pre-let at PPG and Marshalls’ XL unit at the 108-acre Link 62 scheme in Normanton on a 15-year lease at a rent of £2.5 million per year, equating to £4.85 per sq ft; and TK Maxx signing up for 638,000 sq ft unit at Caddick Developments’ Crosspoint Wakefield scheme in Knottingley just off Junction 33 of the M62 close to Junction 40 of the A1(M) on a D&B basis.
Rob Oliver of Bilfinger GVA says: “In essence we are running out of bigger space on these corridors [in Yorkshire] – there is quite a few requirements.”
Similar stories are told further down both arterial corridors with standing stock being taken up and readily available space being in short supply. Amazon agreed terms with Logicor to take a 10-year lease at the 257,855 sq ft GT257 building in Bardon, Leicestershire. Burbage Realty and Moriarty & Co advised Logicor.
This demand has led to some developers looking to speculatively develop but only in locations where demand is strong. Nigel Dolan of Goodman says: “We’ve looked at demand levels and they are strong along the M1 arterial route and we’ve realised there is very little competition in vicinity of our development – it’s a no brainer market opportunity for us.”
Goodman is developing two speculative units; one of 133,000 sq ft in Bardon in Leicestershire known as Interlink130 just off Junction 22 of the M1 motorway in conjunction with Wilson Bowden, and one totalling 325,000 sq ft with Anglesea Capital on Derby Commercial Park near Junction 24A. Letting agents at Bardon are North Rae Sanders and CBRE while the speculative building at Derby Commercial Park is being marketed by CBRE, DTRE, Moriarty & Co.
Further north Verdion is speculatively developing two units on the first 3 million sq ft phase of its £400 million iPort scheme in Doncaster of 131,750 sq ft and 214,850 sq ft, which will be ready in the second quarter of 2016.
A few junctions up in Wakefield, Yorvale, Kier Property and Maple Grove Development is building a 142,000 sq ft unit known as Tri-Link 140 on a six-acre site in Normanton, Wakefield Europort which is being marketed by Carter Towler, BNP Paribas Real Estate, and AWS.
Stoford and Mountpark have started construction on a 133,000 sq ft speculative facility to be known as Mountpark Wakefield. Letting agents are DTRE, Moriarty & Co and JLL. There are also two newly refurbished buildings being marketed in this area – IDI Gazeley’s 281,976 sq ft G.Park Wakefield Europort warehouse, and Edinburgh-based Property Investment Company Parabola’s 190,000 sq ft cross-docked logistics warehouse known as Wakefield Eurohub.
Those developers and investors reluctant to commit to speculative development are busily putting sites together and securing planning wherever possible to capture the very real demand for larger warehousing requirements.
St Paul’s Developments, in conjunction with the HCA, could accommodate a single unit of 450,000 sq ft at its 44 acre 31 East at Junction 31 of the M1 motorway near Sheffield. The site could accommodate a single unit up to 450,000 sq ft. Letting agents are CPP and CBRE.
Verdion’s 337-acre iPort can accommodate units of 500,000 sq ft plus and infrastructure works are well forward. Letting agents are Gent Visick, Cushman & Wakefield and CBRE.
IDI Gazeley’s 115 acre G.Park Doncaster site can also accommodate a 500,000 sq ft plus shed while Henry Boot’s Markham Vale scheme at Junction 29A of the M1 in Chesterfield can accommodate units up to 600,000 sq ft. Letting agents are JLL and Burbage Realty.
Sladen Estate’s 45-acre Summit Park at Junction 28 of the M1 motorway could take a single unit of up to 700,000 sq ft. Letting agents are CPP, North Rae Sanders and Moriarty & Co. Similarly, db symmetry’s newly acquired 48 acre Symmetry Park scheme at Junction 34 of the A1 (M) in Nottinghamshire could take up to 721,000 sq ft of space. Letting agents are Savills and Dove Haigh Phillips
Muse Development’s Logic Leeds scheme at Junction 43 of the M1 could hold a unit up to 1 million sq ft as could Network Space’s 130 acre Manton Wood scheme near Worksop at Junction 31 of the M1.