Strike while the iron’s hot

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As the market springs back into life, interest in sheds along the south of the M1/A1 is increasing and deals are being looked at again with renewed enthusiasm. But as remaining stock gets taken up, and with no speculative development on the agenda, the options are diminishing and deals are going to get firmer.
“Slowly but surely stock is going,” says William Rose of Savills. “3PLs are reliant on moving in immediately so as things pick up surplus stock will fill up. But this in turn will put pressure on prices. The packages available today won’t be available later in the year.”
One 3PL keen to strike while the iron is still hot is Wincanton, which has taken Unit A at RD Park in Hoddesdon to support its foodservice business. The 217,833 sq ft unit replaces the company’s regional foodservice operations currently based at Luton and Dunstable.
The facility boasts 15m eaves, 29 dock and two level access doors, with eight per cent office content. The company paid in the region of the £7.75 per sq ft quoting rent on a 15-year lease. CB Richard Ellis and Paul Wallace Commercial acted for landlords Goodman and Scottish Widows.
David Jones, managing director for foodservice at Wincanton, says: “The site at Luton is both old and constrained in terms of size to meet current challenges and our anticipated further business growth.”
Wincanton has already invested heavily into its foodservice business over the past year, including a £3 million development at Trafford Park, Manchester, which will complement the Hoddesdon site.
Elsewhere, homeware and clothing retailer Cath Kidston has taken 105,000 sq ft at Alpha Park in St Neots. The lease terms have not yet been revealed as the remainder of the 220,000 sq ft property is still available. Alan Matthews of Barker Storey Matthews has confirmed two parties are currently interested in the remaining 115,000 sq ft. M3 and King Sturge are also agents.
The facility features 12m eaves height, 20 dock and two level access doors, with 50kN/sq m floor loading and 55m hard standing. Rent was quoted at £4.95 per sq ft.
As new stock continues to get snapped up, and without any immediate prospect of speculative development starting again, the emphasis seems to be switching to good quality second-hand buildings.
Ruth Tytherley of CBRE reckons: “There will be continual take up of good quality second-hand kit over the coming year as landlords are more willing to do good deals.”
She says there are currently three parties interested in Target Point, the former Bay Trading warehouse at Hatfield, which is now back on the market. The 51,450 sq ft facility has a mezzanine floor and eight metre eaves to the underside of the haunch. It has three dock level and two surface loading doors, along with two-storey office accommodation. CBRE and Davies are agents.
There are a number of other second-hand sites available further up the A1. Montgomery Way in Biggleswade is still up for grabs; the 111,271 sq ft property, which is adjacent to the A1, comprises an industrial unit and refrigerated warehouse with two-storey offices to one end. It has four loading bays with dock levellers and a single surface roller shutter door. Savills is marketing the property on a freehold basis.
Further north is Shrewsbury Avenue in Woodston which has recently been extended to offer 161,151 sq ft of space, and Orton 130, a 130,888 sq ft property, is still available in Peterborough.
Savills is marketing both properties, in addition to DTZ on Orton 130.
Alconbury Airfield in Huntingdon is also now available to let after being sold to Urban & Civic at the end of 2009 for a reported £27.5 million. According to Rose it is “back into the master planning stage”.
It is at the junction of the A1(M) and A14 and lies within its own secure fenced site with gatehouse and security staff and provides storage accommodation in the form of hangars and other buildings, each with a substantial yard or hardstanding area. The site encompasses industrial offices, container storage, warehousing, heavy plant storage and car parking.
Lack of speculative development has also encouraged work to restart on the design and build front. Central Bedfordshire Council has just granted outline planning permission for a 761,000 sq ft distribution centre at Gazeley’s G.Park Dunstable scheme at Boscombe Place close to Junction 11 of the M1 motorway.
The facility will incorporate Gazeley’s Eco Template, which is designed to reduce running costs. It will have a haunch height of 15m, along with approximately 70 dock levellers, six level access doors and 185 HGV parking places, including 76 loading spaces, and 294 car parking places. The £90 million scheme has been forward funded by Cardiff-based Julian Hodge Bank and Deutsche Hypo Bank. Savills and ColliersCRE are joint agents on the 32-acre site.
Alex Verbeek, development director at Gazeley UK, says: “The region surrounding the A1/M1 south has continued to be extremely popular for companies looking to establish a distribution hub to efficiently serve the majority of their UK markets.
“The availability of labour and convenient access to the M1 and A1 has helped ensure the region continues to benefit from on-going development.
Gazeley has also started work on-site on a 260,000 sq ft build to suit facility for Butcher’s Pet Care at G.Park Crick after being granted planning permission by Daventry District Council. The £38 million development has been forward funded by investment manager Legal & General Property on behalf of its Managed Pension Fund. Bowmer and Kirkland has been appointed as contractor.
Butcher’s Pet Care signed a 20-year lease on the property in January and when complete it will become the new headquarters, manufacturing and distribution facility for the company’s international operations. It is located close to Junction 18 of the M1 motorway and will be fully operational by 2011.
Gazeley has outline planning for 1.1 million sq ft of B8 development on the 95-acre site.
Gazeley’s Bruce Topley says: “The deal with Butcher’s Pet Care delivers the infrastructure to release the balance of the site where we can deliver up to 1.1 million sq ft in a single unit for our customers at this key UK distribution site.” CBRE and M3 are acting for Gazeley.
In Hertfordshire, Ruth Tytherley says there are a number of very well known occupiers looking for buildings above 100,000 sq ft, who have been for some time, but the stock just isn’t there to satisfy demand. “Soon it’s going to get to a point where they’re going to have to widen their search area or look further up north where D&B options are going to be more reasonable.”
As the options narrow she reckons: “We could well see the start of speculative development by the end of this year, if not the beginning of next because buildings are getting taken up.”
Despite the fact stock is going, for the area as a whole Rose reckons “we won’t see speculative development for quite some time still, certainly not before the end of 2010 because the banks aren’t in a position to lend.”
Lambert Smith Hampton’s National Industrial and Distribution Report 2010 revealed early signs of recovery towards the end of 2009; take up improved by ten per cent compared to the previous year, with transactions on units above 100,000 sq ft dominating.
According to the report, take up in Bedford totalled 460,000 sq ft last year, up from 340,000 sq ft the previous year, but still below the long-term average.
Dan Jackson of Lambert Smith Hampton says: “The data shown in our report does show that 2009 should not be regarded as a failure – take-up was in fact 35 per cent higher than the previous year.”
He suggests that the industry now needs to focus on refurbishment and development so that when the market improves demand for better quality accommodation can be fulfilled. “As the market improves developers within Bedford should be able to take advantage of good land availability, especially towards the south of the town.”
Additionally, dualling works on the A421 are expected to be completed towards the end of 2010, meaning the town will “sit on the best A1/M1 link north of the M25”.
Major sheds avaliable
Name: Paragon MK
Development type: Speculative
Size: 139,000 sq ft
Location: Milton Keynes
Agents: Burbage Realty, Lambert Smith Hampton
Name: High Standing
Development type: Second-hand
Size: 151,952 sq ft
Location: Milton Keynes
Agents: King Sturge
Name: Quantum
Development type: D&B
Size: 150,000 sq ft
Location: Dunstable
Agents: Savills, Lambert Smith Hampton
Name: G.Park Hemel Hempstead
Development type: Speculative
Size: 167,730 sq ft
Location: Hemel Hempstead
Agents: Savills, CB Richard Ellis
Name: Coronation Business Park
Development type: D&;B
Size: up to 100,000 sq ft
Location: Bedford
Agents: Gladman, Brown & Lee, Lambert Smith Hampton
Name: Magna Park  Milton Keynes
Development type: D&B
Size: 100,000 sq ft to 1m sq ft
Location: Milton Keynes
Agents: Burbage Realty, Jones Lang LaSalle, Savills
Name: ProLogis Park Pineham
Development type: Speculative/D&B
Size: 138,133 sq ft/up to 542,637 sq ft
Location: Northampton
Agents: Burbage Realty, Readings Hope & Mann
Name: Welwyn Central
Development type: Second-hand
Size: 102,500 sq ft
Location: Welwyn Garden City
Agents: Burbage Realty, Aitchison Rafferty
Name: G.Park Biggleswade
Development type: D&B
Size: up to 533,700 sq ft
Location: Biggleswade
Agents: Colliers CRE
Name: Immanis
Development type: Second-hand
Size: 126,620 sq ft
Location: Northampton
Agents: Burbage Realty

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