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Robert Cleeve of King Sturge says: “Although the UK has seen three consecutive years of increases in industrial floor space availability, the latest level of increase was minimal at 0.5 per cent. However, in the South West there was nearly 1.4 million sq m of available floor space in June this year, an increase of two per cent since December 2007.

“In stark contrast the South East was down 2.4 per cent, Scotland was down 1.9 per cent and the West Midlands down 1.5 per cent.

“Availability of new buildings in the South West rose 53.7 per cent to 1,570,960 sq ft providing ten per cent of the region’s total available stock.

“Turning to floor space available in larger buildings over 100,000 sq ft, the South West saw a 7.7 per cent increase (258,240 sq ft) compared to a marginal national downswing of 0.8 per cent.

“However, the level of speculative development under construction in the South West has fallen considerably since the last survey, with 243,983 sq ft of industrial floor space under construction, representing a 729,237 sq ft fall in floor space being developed.”

The focus of recent development in the Greater Bristol industrial market has been around Severnside and Avonmouth. Following economic restructuring of the UK’s industrial sector, the area endured a significant decline with the closure of many heavy industrial users. However, the resultant release of substantial tracts of land for redevelopment has allowed Bristol to capitalise on the rapid rise in demand in the logistics sector, particularly as traditional locations such as the West Midlands and the South East have come to possess high land prices with increasingly restricted sites available.

Russell Crofts of Knight Frank says: “Recent speculative development has also focused on large-scale units, and there are currently five units available in excess of 100,000 sq ft in the Bristol area.

The largest of these is ProLogis’ Crossflow 550 at Cabot Park, Avonmouth, which, at 550,000 sq ft, is the largest speculatively developed distribution unit ever built in the South West.”

The facility boasts 12m eaves and has two 50m-deep yards. It is being marketed by CB Richard Ellis and Knight Frank. Next door is the smaller ProLogis unit of 114,220 sq ft, which has 10m eaves, and a yard depth of up to 64m. It is also being marketed by CB Richard Ellis and Knight Frank.

Then there is Gazeley’s G.Park Bristol scheme at Western Approach in Bristol, with two units totalling almost 322,800 sq ft, although these are rumoured to be under offer to GKN Airbus.

The Gazeley units of 206,000 sq ft and 117,000 sq ft boast 12m eaves as well as 50m yards. The larger unit has 18 dock doors and four level access loading doors and a two- storey office totalling 9,645 sq ft. It has parking for 96 cars and 40 lorries. The smaller unit on the other hand has ten dock doors and two level access loading doors and a two-storey office of 5,684 sq ft.


Both units benefit from a range of environmental features including solar thermal panels, photovoltaics, energy efficient lighting, rain water harvesting, recyclable materials, and low air permeability. According to Gazeley partner Solar Century, the new SB Solar Energy System installation on the warehouses in Bristol will generate 6484 kWh of electricity per year, saving 100 tonnes of CO2 emissions over 25 years. King Sturge and DTZ are joint letting agents for the site.

Crofts says: “While the market for big-box distribution facilities has been addressed, the same cannot be said for new small to medium-sized units under 40,000 sq ft, of which just one remains available.

“Current unsatisfied demand is estimated at 3.2 million sq ft and is particularly evident among more medium-sized operators for units of 10,000 to 40,000 sq ft. St Modwen Developments and Terramond have been particularly successful addressing this market, developing space at Access 18 and Poplar Park respectively, while Chancerygate has acquired sites in central Bristol and Yate to address unsatisfied demand in the small freehold market.”

Rob Skelston of St Modwen, said: “The shortage of good quality new-build units for medium-sized operators in the Bristol area has created strong interest in the space being developed at Access 18 and has therefore attracted good interest from investors.” Alder King is letting agent.

For the limited schemes, in this size-range, in the pipeline, quoting rents have been rising in reflection of strong unsatisfied demand in the market for good quality product as opposed to current yield pressure and high build costs.

For example, at Access 18, quoting rents are £6.75 per sq ft for the two planned units, which total 35,000 sq ft, while ProLogis is quoting £8 per sq ft for proposals of similar product at its 80-acre site in Filton, which it acquired from Rolls Royce.

In fact, such is demand that occupiers have been keen to look further afield. St Modwen has had notable success at its 32-acre Quedgeley West scheme in Gloucester. It has recently let two distribution units totalling 30,212 sq ft to footwear distributor, Gardiner Bros. & Co (Leathers).

This means the developer has disposed of 180,000 sq ft of accommodation at the park in the past year and as a result it is preparing to submit planning for the park’s fourth and final development phase.

Peter Davies of St Modwen says: “With just two units of 32,000 sq ft and 13,000 sq ft remaining, we are now preparing to submit planning for the fourth and final phase at the business park, that will provide 140,000 sq ft of warehouse distribution space, in units ranging from between 15,000 sq ft to 40,000 sq ft.

Hugh Wilkinson acted for Gardiner Brothers, while Ash & Co. and DTZ represented St Modwen.

Keen to cash in on the demand, South West developer KMV paid Premdor £2.75m for its 7.2-acre former site on Bristol Road, Bridgwater, which it intends to refurbish and extend to cater for the smaller occupier.

Lambert Smith Hampton acted for KMV while Atisreal advised Premdor. Both have been retained to market the new 135,000 sq ft plus scheme.

With the limited supply of new space to address medium-sized demand, rental growth has been strong in the second-hand market. Where refurbishment has been to a good standard, rental growth of circa 20 per cent has occurred over the past two years. Best secondary rents across the city are now at £6.75 per sq ft, which compares to £7.50 per sq ft for prime space.

Looking at land values, Crofts says: “It is currently difficult to determine what has happened to land prices within the Greater Bristol industrial market following the softening of yields. Transactional evidence indicates that the market peaked with a transaction to Tesco of approximately 96 acres of unserviced land at a reported £400,000 per acre.

“Since then, little land has been transacted to support the suggestion in the market that land values have dropped by 20 per cent.”

Tesco is to build a 600,000 sq ft facility on the site which it acquired from Redrow. The building will replace its cold store at Chepstow.

There is a shortage of well-located development land and subsequent lack of new schemes in the pipeline, as well as developers’ reluctance to develop following the introduction of The Rating (Empty Properties) Act 2007, which means we will see a shortage of quality, well-located space when the market recovers.The reason for the slow down in transacted land is due to the fact that many of the available sites have already been snapped up. ProLogis has secured the former Rolls Royce site at Flitton totalling some 80 acres. This will be brought forward in phases to include facilities for smaller occupiers as well as offices and housing.


Goodman still has 16 acres available at its RD Park scheme in Avonmouth although some, if not all, is rumoured to be under offer to a recycling company. It has a further 22 acres for development at Northfield in Flitton. The only other available development site is at St Modwen’s Access 18 scheme totalling 35 acres. Skelston says: “Even when we have completed the current speculative phase there will still be room to develop another 600,000 sq ft of industrial and warehousing space on either a bespoke basis or through further speculative phases.”

Gazeley still has space for development at G.Park Bristol, says Charles Blake of Gazeley. It sold around 12 acres at Plot 8000 to Family bakers Warburton’s for a 120,000 sq ft bakery and distribution warehouse.

The remaining Plot 8020 can do 250,000 sq ft site and is available through letting agents DTZ and King Sturge. Blake says: “We are looking for a bespoke deal and have outline planning at present.”

The last plot at the site, known as Plot 6000, totals six acres and can provide up to 100,000 sq ft. Binks adds that there is a big land holding belonging to Severnside Distribution Land on the former ICI plant. In total there is 600 acres. The initial element that could be brought forward is around 130 acres. Knight Frank is sole agent. The landowner is looking to put in infrastructure to open the scheme up.

Looking to South Wales, Owen Griffiths of Lambert Smith Hampton, says: “The impact of the credit and liquidity crisis has continued to take its toll in the third quarter of 2008 and the value of transactions dipped to their lowest quarterly total for almost eight years, as the market and wider economic outlook have deteriorated during the year, so has occupier sentiment and subsequently levels of activity and take-up have reduced.


But in spite of that, we have seen resurgence in the leasehold market over the last quarter, and recent deals have included WH Smith taking 53,000 sq ft Imperial Park, Newport, Hasbro UK taking 85,000 sq ft at Reevseland Industrial Estate, Newport and MMA Sports taking part of the 180,000 sq ft Fabian Park development in Swansea adjacent to Amazon’s regional distribution centre.

Demand for well-located units along the M4 corridor with good road access remains relatively robust, which is being demonstrated by the demand we are seeing for the 257,707 sq ft Access 34 scheme in Llantrisant.

There is also strong interest in Frontier Estates’ 26-acre Newhouse scheme that will provide a total of 524,617 sq ft of warehouse accommodation near Chepstow. The developer says the location is ideal to service south west England, the Midlands and South Wales.

Three units are available to lease or purchase ranging from 50,000 sq ft to 200,000 sq ft, with the option of dividing one of the units into three self-contained properties of 50,000 sq ft each.

Will Creedon of Lambert Smith Hampton says: “The properties are designed to a high specification that includes 12m eaves, fully fitted office accommodation, electronically operated loading doors and docks, gatehouse controlled secure yards and quality landscaping.”

The first speculative unit of 180,502 sq ft has recently been completed.

In terms of schemes to come forward over the next couple of years, Binks says there is some 120 acres at the former Lllanwern Works in Newport, which could support up to one million sq ft of rail-connected distribution development. St Modwen has been chosen as preferred developer for the scheme to be known as Celtic Business Park. Letting agents are King Sturge and Knight Frank.

Despite the plethora of space immediately available, Griffiths warns: “There is a shortage of well-located development land and subsequent lack of new schemes in the pipeline, as well as developers’ reluctance to develop following the introduction of The Rating (Empty Properties) Act 2007, which means we will see a shortage of quality, well-located space when the market recovers.”

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