There is now a good number of enquiries in the market, which will potentially take out the remaining buildings.
Roger HaworthSouth Yorkshire is one of the few places where there is still a reasonable amount of good quality warehouse space left, but as the economy improves and companies revisit upgrade plans it is beginning to dwindle.
“At the start of 2011 the number enquiries for bigger sheds of 300,000 sq ft plus was slim, but in the last three weeks things have started to pick up. Things are beginning to look more positive,” says Roger Haworth of CBRE.
“There is now a good number of enquiries in the market, which will potentially take out the remaining buildings. Existing supply will run out in around two years, so by 2013 there will be very little decent quality space left in the big shed market.”
And the resurgence in manufacturing means that there are now new competitors for what logistics space is available. In fact, 140,000 sq ft has just been taken by national bus manufacturer Optare at Sherburn Distribution Park on a 17-year lease as the company plans to consolidate its three existing factories in Leeds, Rotherham and Blackburn into a single manufacturing facility.
According to Optare, its Sherburn facility will be the first new bus assembly plant to open in the UK for more than 40 years. The warehouse has 12m eaves, 14 dock levellers, three level entry doors and a 65kN/sq m floor loading, as well as a 51m self contained yard, 14 trailer spaces and 65 car parking spaces.
Paul Mack, associate director at DTZ, who acted on behalf of landlord Evander Properties/Anglesea Capital, says: “Optare is the latest business to move to Sherburn Distribution Park, following deals with Debenhams, which took 667,000 sq ft in October 2010, and Sala International which took 92,000 sq ft in 2009. There are now only two buildings remaining on the park of 190,000 sq ft and 330,000 sq ft respectively.”
He adds: “This latest addition further demonstrates the capabilities of the area as a hot spot for manufacturing and distribution within the Yorkshire region. The Sherburn Industrial Estate benefits from a huge power supply which is key to the manufacturing sector, as well as uncongested access to the regional and national motorway network.”
Sherburn is five minutes from Junction 42 of the A1(M). GVA acted on behalf of Optare.
Haworth says more occupiers are looking to take space in the Yorkshire area because of the lack of space in other parts of the country. “The more sheds that get taken up elsewhere the greater number of enquiries we are seeing,” he says.
There are a number of other options in the large sheds market. Indeed, Rob Oliver of GVA says: “In the 200,000 sq ft plus range there is an oversupply in South Yorkshire.”
On the speculative front there is 412,000 sq ft at Blade in Sheffield, which offers 15m eaves, 40 dock and two level access doors, and a 50kN/sq m floor loading. It is located half a mile from Junctions 33 & 34 of the M1 motorway. Agents are CBRE and Knight Frank.
There are two properties at SIRFT in Sheffield providing 334,781 sq ft and 291,143 sq ft of space with rail access. Both have 15m eaves, 50kN/sq m floor loading and 30 dock and two level access doors. The units are located one mile from Junction 33 of the M1 and are available leasehold or freehold at a rent of £4.95psf or at a price of £45psf.
King Sturge, GVA, CBRE and Moriarty & Co are marketing the units.
There are still deals to be had, but according to Oliver they won’t be around for much longer. “Things have been pretty solid over the past nine to 12 months in terms of enquiries [across all size ranges],” he says. “Values have been low so it’s very tenant friendly; there have been low rents and healthy incentives. But supply is tightening up now and landlords have more of a negotiating position… these deals won’t be around forever so companies shouldn’t wait for too long.”
On the sub 100,000 sq ft market there is only a small supply of modern space left, and in the 100,000sq ft 150,000 sq ft range there are only a handful of properties available. As such, Oliver says there are now a few proposals for D&B in Sheffield and Rotherham “which we weren’t seeing nine months ago”.
Haworth agrees: “D&B is undoubtedly on the come back. We are starting to see the beginning of more activity. In 2011 occupiers will look more seriously at taking D&B and enquiries for D&B options will increase into 2012/13.” But he warns that D&B options are much less flexible and deals won’t be as favourable. “It’s a case of take it or leave it,” he says.
Engineering company Thetford has just signed a 17-year lease for an 83,000 sq ft pre-let industrial unit at St Paul’s Developments and Tritax Assets’ 85-acre Brookfields scheme in Rotherham.