Despite rumours to the contrary occupiers could find that securing space in Greater Manchester is harder than they think. Liza Helps investigates.
Mike Walker of Colliers CRE explains: “We find ourselves in a situation where the whole market has been slightly skewed with massive buildings at Ellesmere Port, which makes the North West supply side look quite full but looking at traditional 50,000 sq ft – 200,000 sq ft buildings occupiers will see there probably isn’t an awful lot available.”
Indeed, Lambert Smith Hampton’s National Industrial & Distribution Report notes for occupiers looking in Greater Manchester that current supply is relatively constrained.
Andrew Pexton of GVA Grimley points out: “If the take-up in the market continues at present levels then within 12 months there may be none [new builds] left.”
Steve Johnson of King Sturge agrees, adding that there are only two new buildings between 100,000 – 200,000 sq ft within striking distance of the M60 that are available. These are Legal & General’s Fusion at Electric Park totalling 208,000 sq ft. The building has space for up to 69,120 pallet spaces and boasts a 15m eaves height. Letting agents are King Sturge and CBRE.
Then there is Teesland iDG’s 184,000 sq ft at Broadway 21 close to Junction 21 of the M60 orbital motorway. The building has 12m eaves as well as 18 dock and two level access doors. It has a 50kN/sq m floor loading and five per cent office content. Letting agents are P3 Property Consultants and Colliers CRE, which are quoting £5.05 per sq ft leasehold. Walker says he has good interest in the unit. There is also a further 40,000 sq ft warehouse available at the development. The situation eases for occupiers happy to take refurbished and second-hand units.
One of the largest in the market is The Hub at SEGRO’s Heywood Distribution Park totalling 500,000 sq ft. Next, which took over the former Littlewoods warehouse in 2005, is vacating the building in 2010 but could leave earlier should another occupier wish to move in before the lease is due to expire.
The Hub boasts up to 10.7m eaves height and is fully fitted with racking, sprinklers, lighting and heating. The facility has 20 plus dock levellers as well as level access doors and benefits from an adjoining site M400 of 18.5 acres, which is available for expansion should it be required. Letting agents King Sturge and Savills are quoting a headline rent of £3.75 per sq ft.
Then there is Satellite330 at Royal London’s Satellite Park scheme at Chadderton. The refurbished unit totals 330,000 sq ft with a 40,000 pallet capacity. It has 9.5m eaves as well as 16 dock and four level access doors. The facility has a 45m deep yard with on site parking for 25 trailers and 116 cars. Letting agents are M3, GVA Grimley and CBRE. King Sturge is also marketing Slumberland’s warehouse in Oldham, which was built in 1991. The unit has 8-9m eaves and totals 286,000 sq ft.
There are several units at Stakehill Distribution Park in Middleton. These include Unit 29, formerly occupied by DHL, which totals 198,000 sq ft, as well as the former Sainsbury’s warehouse known as Unit 61. This totals 190,166 sq ft and has 24 dock levellers and a 9.1m eaves height. Cushman & Wakefield is marketing the facility. There is also Unit 69 totalling 102,855 sq ft. The cross-docked building, which is being marketed by CBRE and GVA Grimley, has seven docks on the western elevation and four on the eastern elevation. Newly formed property company Ainscough-Johnston has a 125,00 sq ft refurbished unit at the 45-acre former Enersys site in Clifton, near Swinton in Salford together with six acres of open storage.
David Nutall of Nolan Redshaw says: “We are quoting rents from £1.50 to £2 per sq ft depending on particular units and we can be fairly flexible looking at three-year leases upwards. Depending on the client and the unit involved we would also look at less. Nutall adds he is also sole agent on a smaller site of 87,000 sq ft at Trafford Park known as Stadium Point, which is back on the market. The unit has 10m eaves and the quoting rent is £3 – 3.75 per sq ft.
With such a limited supply one would think that landlords could be fairly inflexible when it comes to lease terms and rent levels but that does not seem to be the case. Rob Taylor of Knight Frank says: “Landlords are prepared to accept flexibility. With empty rates they are more inclined to be flexible and would rather have it let than sit there vacant. Ideally they will want a return on their investment so will accept five-year lease terms.”
That said, occupiers should note that each deal has to be agreed on its own merits and will be dependent on the landlords’ financial situation in the first instance and how long the building has been on the market in the second. Pexton adds: “Landlords [in general] will hold out for three to five year leases but will give more incentives in terms of rent-free etc. People will still have to be prepared to pay for flexibility.”