There is now a lack of existing stock as the development pipeline has all but been switched off, so there are attractive deals to be had. There has been a flurry of interest in the M25 region over the past couple of months and properties that have lain dormant since being built some years ago are getting a fresh look as landlords have been forced to bring down prices.
“The most interesting thing going on recently has been the M1stral 260 building,” says Robin Catlin of BNP Paribas Real Estate. “There have been various rumours about sales, but the whole thing seems to be cloaked in a lot of secrecy.”
The modern, high bay 260,000 sq ft warehouse unit was originally developed by Gazeley. There has been a lot of talk about the price, and there has been speculation in the market that this could be as little as £40 to £50 per square foot.
Edward Staveley of M3, one of the agents for the property, says contracts have been exchanged and the deal is expected to complete towards the end of February. Lambert Smith Hampton and Jones Lang LaSalle are joint agents.
Elsewhere, Henderson’s Magnum 25 building is reportedly under offer on a freehold basis to vegetable distributor Stubbins. The 177,900 sq ft facility was built almost five years ago but has never been occupied. It too is believed to be under offer at an attractive price, predominantly down to empty rates. King Sturge, CBRE and Knight Frank are agents.
In addition, online clothing retailer ASOS is also rumoured to be taking a 30,000 sq ft building on a short-term let in Hemel Hempstead, but the last significant deal was the John Lewis pre-let at Innova Park, Enfield. The 85,000 sq ft property is now believed to be under construction. M3 acted as sole agents for developer Kennet Properties, the property arm of Thames Water.
Stock does appear to be running out though. “Decent spec built sheds are few and far between,” says Gordon Reynolds of Cushman & Wakefield. “There is now a lack of existing stock as the development pipeline has all but been switched off, so there are attractive deals to be had. Well advised and strategic occupiers are taking advantage of that as the window of opportunity for very good deals is closing.”
Goodman’s 218,000 sq ft Unit A building at RD Park in Hoddesdon, which was pre-let to Innovate before the company got into difficulty, is back on the market. It boasts 15m eaves and 50kN/sq m floor loading and has 29 sealed and insulated dock level loading doors, two surface level loading doors and a two-storey gatehouse with heavy duty barriers.
It has two-storey fully fitted offices totalling 10,430 sq ft and space for 195 car parking spaces. The facility has an “excellent” BREEAM rating and features a rainwater recycling tank. The site is located eight miles from Junction 25 of the M25. Agents are Paul Wallace Commercial and CBRE.
Further away from the M25 is the Celestia building in Milton Keynes, a 318,526 sq ft facility on a 14-acre site at Snelshall West near Junctions 13 and 14 of the M1 motorway. The facility has 24 dock level loading doors, two surface level loading doors, as well as 50kN/sq m floor loading and a clear height of 12m. It also offers office space totalling 17,674 sq ft, along with 200 car parking and 39 lorry parking spaces.
“But other than that,” says Reynolds, “occupiers are having to go up to Northampton. We’re still at least one year off developers beginning to speculatively build again so occupiers could well be forced to start looking at design and build before too much longer, but rents of course will be higher.”
HelioSlough’s proposed 3.5 million square foot rail freight terminal at the former Radlett Aerodrome near St Albans has proved very divisive and remains a huge bone of contention among local residents.
St Albans council has refused two planning applications from the developer and a public inquiry into the development took place at the end of 2009. A decision to the appeal will be issued by the secretary of state on or before 23rd June 2010.
“It’s up in the air at the moment,” says Robin Catlin, “so clearly everyone is in limbo while waiting for a decision. The difficulty is getting these things off the ground because they do require significant capital investment and in the current climate it’s difficult to justify.”