A shortage of space and pent up demand is spurring developers to bring sites forward. Liza Helps reports.
Big lettings along the southern M1 corridor have seen the few available buildings snapped up – especially in locations close to London. Amazon secured the former 160,000 sq ft ASOS building known as DC160 at Prologis Park, Hemel Hempstead on the Maylands Estate on a 10-year lease.
Letting agents Knight Frank and Lambert Smith Hampton were quoting a rent of £7.50 per sq ft. CBRE advised Amazon.
Home, garden and kitchenware retailer Robert Dyas took AXA Real Estate’s 130,443 sq ft warehouse close by. The building was taken on a 10-year lease with no breaks. Lambert Smith Hampton advised AXA Real Estate while White Druce Brown acted for Robert Dyas.
According to Lambert Smith Hampton’s latest Industrial & Logistics Market Report: “The region as a whole has an availability rate of only 4.5 per cent, with Luton, Dunstable and Bedford experiencing even tighter market conditions.”
Steve Mitchell of Colliers adds: “Doing a search you are not going to find that much – it is challenging. However, all things being equal there are enough sites and the market actually looks a lot better than it did two years ago.”
While availability may be tight, research from Savills shows that supply has increased. “Current supply of industrial units over 100,000 sq ft is 1.53 million sq ft, which is an eight per cent increase from 2014 when supply sat at 1.41 million sq ft.”
The shortages have helped rent levels increase, says Andy Hall of Knight Frank. “Rents have moved on but how far they will increase has yet to be decided.”
The good thing about the shortages and rent increases, adds William Rose of Savills is that: “It will spur on developers to speculatively build.”
Already there are a number of speculatively built units on the market including a 310,108 sq ft unit being brought forward by developer Prologis at Prologis Park Dunstable in Bedfordshire. The property, located just 1.5 miles from Junction 11 of the M1 motorway, will boast 12.5m eaves and have 28 dock and four level access doors. Letting agents are Colliers International and Savills. Practical completion is expected shortly.
IDI Gazeley is speculatively developing a 97,672 sq ft warehouse at G.Park Enfield close to the A1. The building will comprise of 92,204 sq ft of warehouse space with 4,736 sq ft of two-storey office space. It will feature 12.5m clear internal height, 10 dock and 8 level access doors.
It is expected to be available at the start of July. Letting agents on the scheme are Lambert Smith Hampton, JLL and CBRE. IDI Gazeley is also preparing a speculative 180,000 sq ft warehouse at its Magna Park Milton Keynes scheme, while Roxhill is thought to be considering a speculative unit at its Peterborough Gateway scheme just of J17 of the A1(M) motorway.
On the second hand front there are a number of units including the former Co-operative warehouse in Huntingdon through DTZ as well as the 130,000 sq ft former Fujitsu warehouse in Stevenage, also on the market through DTZ. In Hatfield there is the 50,000 sq ft former City Link warehouse, which Mitchell “cannot conceive will be empty for long”.
There is the 120,000 sq ft former Movianto building in Bedford on the market through Cushman & Wakefield as well as DC1:MK totalling 209,949 sq ft in Milton Keynes, which has 12m eaves as well as 19 dock levellers. It is being marketed by Louchshaclock and CBRE.
There is also MK180, a 181,566 sq ft warehouse on the market through Burbage Realty and Savills. The fully –fitted warehouse has 10.5m eaves.
The potential for the southern A1 and M1 corridors is looking quite exciting with several sites being brought forward. These include Roxhill’s Peterborough Gateway, which can accommodate up to 5 million sq ft of space and currently has detailed planning for 1.8 million sq ft of B1, B2 and B8. Buildings on offer will range from 95,000 sq ft to a massive 1.3 million sq ft. Joint letting agents are North Rae Sanders, Bidwells and Burbage Realty.
Then there is the remaining land at IDI Gazeley’s 210-acre Magna Park Milton Keynes development, which recently saw John Lewis secure a third D&B warehouse. The new facility totalling 638,000 sq ft was taken on a 25-year lease at a rent in the region of £5.50 per sq ft. Letting agents are JLL, Burbage and Savills.
IDI Gazeley also has the remaining land at G.Park Bedford – where Brown & Lee and Savills are letting agents – which could accommodate up to 260,000 sq ft on a D&B basis, while further south there is G.Park Biggleswade that can accommodate up to 533,7000 sq ft. Letting agents are Colliers and CBRE.
Close by there is another build-to-suit opportunity at Prologis Park Marston Gate where it has planning for a 426,470 sq ft facility with 12m eaves. Letting agents are Burbage and Lambert Smith Hampton. Canmoor has QuantuM-1 in Dunstable that could provide up to 450,000 sq ft. Letting agents are Lambert Smith Hampton and Dowley Turner Real Estate while Graftongate in conjunction with LondonMetric has a 37 acre site in Bedford that could accommodate up to 750,000 sq ft.
Prologis has a site in Luton, which it intends to bring forward as a rail freight interchange known as Prologis RFI Sundon. It could accommodate up to 1.8 million sq ft of rail connected warehousing. It also has options on an adjacent site that could provide a further 1 million sq ft.
In addition the developer also has the remaining land at its Prologis Park Dunstable scheme.