The M5 corridor has been at a discount to the West Midlands but will it be for much longer? Liza Helps investigates
This pre-let shows even in the current financial climate there is still strong demand for high quality units with the right specification, amenities and location.
In addition, says Gerald Eve, the corridor “provides excellent access to major population centres within a four and a half hour drive time”. There has been a shortage of supply and opportunity to date, but developers are becoming more active in the area. Following the success of its Stonebridge Cross scheme near Droitwich, Stoford Developments is currently on site at its 40-acre scheme Vale Park West in Evesham.
It has already pre-let the largest of four units that make up the first phase of the park. The 75,000 sq ft warehouse was let to flooring company Carn Dean, which took occupation in the summer of 2008. The new unit boasts 12m eaves, five dock and two level access doors. Stoford director Jason Adderley said: “This pre-let shows even in the current financial climate there is still strong demand for high quality units with the right specification, amenities and location.”
Rowan says there is some 32 acres left for development, which could accommodate a single unit of up to 350,000 sq Availability is well below our national average at ten per cent and development activity ranked the second lowest of all the regions with less than a million sq ft added to the region over the five-year period, none of which was built speculatively.ft. There are three further speculative units on the first phase of 18,000 sq ft, 24,000 sq ft and 30,000 sq ft available through letting agents Atsireal and Alder King. The developer is looking to secure design and build or land deals. The new scheme will eventually offer up to 850,000 sq ft of space.
New to the area is F&C Property Asset Management, which acting on behalf of Multi-Manager Mandate, recently paid £4.85 million for a 150,000 sq ft warehouse facility in Droitwich, Worcestershire that it intends to redevelop. The warehouse, which is set on a ten-acre site situated at West Bank, Berry Hill Industrial Estate, is currently let to Home Delivery Network. The lease is due to expire in September 2010.
F&C Property is working with CDC Estates on proposals to redevelop the site for future industrial/distribution activity to generate further value and income. It expects to be on site in early spring 2011. Guy Treharne of CDC Estates says: “The site identified for redevelopment is among one of the best-located industrial sites of that size (ten acres) situated along the M5 corridor which will help secure a blue chip occupier.”
Another developer GraftonGate also has several schemes up and down the M5 corridor to Bristol. These include Acanthus Park in Redditch where there are three plots to build warehouses from 40,000 to 80,000 sq ft. Letting agent is Savills. Then there is its scheme in Kidderminster, called Finepoint Business Park, of 11 units — one of which totals 102,300 sq ft.
The building boasts 12m eaves, 50kN/sq ft floor loading, a 40m yard depth, 24-hour access, secure yards and ample car and lorry parking. It has a 21,680 sq ft office incorporated. There is also a 43,700 sq ft unit with 4,200 sq ft offices available. Joint letting agents are M3 and GVA Grimley. The scheme could also take a design and build of up to 120,000 sq ft. In addition, it acquired Javelin Park in Gloucester just off Junction 12 of the M5 motorway where it could accommodate up to 485,000 sq ft.
According to Gerald Eve, demand in Gloucester and Worcester is potentially constrained by the availability of space of reasonable quality at affordable rates. “Availability is well below our national average at ten per cent and development activity ranked the second lowest of all the regions with less than a million sq ft added to the region over the five-year period, none of which was built speculatively.”
There are three further D&B opportunities in the area which could accommodate larger units. These include Goodman’s Gloucester Business Park at Junction 11A, being marketed by Alder King and Strutt & Parker, as well as Howard Tenens Associates’ Severn Distribution Park at Junction 14, which could accommodate a single unit of up to 236,800 sq ft. Letting agents are GVA Grimley and Alder King.
St Modwen boasts Quedgeley West Business Park at Junction 12 not far from Javelin Park where a footwear distributor, has just acquired two units totalling 30,212 sq ft. 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 which, in addition to underlining our ongoing investment in the area, will provide 140,000 sq ft of warehouse distribution space, in units ranging from 15,000 sq ft to 40,000 sq ft.”
There is a small plot of land known as Ashchurch 9 in Tewkesbury being brought forward by joint developers Chase Commercial and Hortons, which has recently secured planning for 70,000 sq ft of space.
Plans to introduce lorry management zones, limiting freight vehicle movements through the environmentally sensitive Cotswolds area, could have a knock-on effect for occupiers and limitations as to where freight vehicles may travel could further drive occupiers to be close to the M5.