There is little space readily available in the South West & Wales, so what are the options for occupiers?
The consensus of opinion says that the South West lacks supply. In fact some go as far as to say it has a complete lack of supply. DTZ’s latest research notes that the South West generally has the lowest availability ratio of Grade-A buildings in the UK, with a shortage of supply of good quality facilities.
Russell Crofts of Knight Frank says: “We are rapidly running out of stock across the board in all sizes from 2,500 sq ft upwards. This time last year we had two or three buildings available and now only one.”
The last significant shed standing that is immediately available is ProLogis’ Crossflow 550 cross dock warehouse in Cabot Park. It was built in 2008 as the largest speculatively, developed distribution unit ever constructed in the South West. Totalling 549,626 sq ft it boasts 12 m eaves, 50 dock and eight level access doors, two 50m deep yards, 172 HGV/trailer space as car parking for 403. It stands on a secure site of 27.64 acres with gatehouses. It is being marketed by Knight Frank and Savills.
After that, says Tom Hughes of Strutt & Parker: “There is only one building in Bristol over 100,000 sq ft and that is under offer to Yankee Candles.”
Owned by Standard Life, the property is under offer subject to planning as Yankee Candles wants additional office space; it currently has 4.2 per cent offices. It totals 164,885 sq ft and boasts 12 m eaves, 16 dock and one level access door, 50Kn/m floor loading and 98 parking spaces. It is located on a 7.86 acre site located less than 2 miles from Junction 18/18a of the M5/M49 and 10 miles from the M4/M5 interchange. Yankee Candles is thought to have agreed a ten-year lease at a rent in the region of £6.25 per sq ft. Letting agents are GVA and Colliers while WGH acted for Yankee Candles.
In terms of other immediately available sheds, tenants will have to look to the second hand market. However says Paul Hobbs of GVA there isn’t that much and what is there has become available due to a spate of consolidations and rationalisations over the last 18 months.
“Morrison’s move to an 800,000 sq ft warehouse in Bridgwater has left a legacy at Yate (250,000 sq ft), Bristol (365,000 sq ft), Swindon (300,000 sq ft), and Cullompton (100,000 sq ft). While Co-op’s move has left a legacy of 200,000 sq ft in Wellington, 250,000 sq ft in Ross-on-Wye, and 90,000 sq ft in Bristol.”
It’s not as though there is not the demand. Crofts says his office has enquiries in excess of two million sq ft in the Bristol area while Chris Sutton of Jones Lang LaSalle in Cardiff notes: “[There is] continued demand from the corporate sector for high quality industrial accommodation in locations with strong communication links [in Wales]. However, as there is now a shortage of modern stock the Welsh Government could now encourage renewed speculative development through the extension of business rates exemption for new build schemes”.
Robb Ladd of DTZ in Cardiff agrees: “The last 18 months has been much more active especially for the smaller hubs for the likes of UPS DHL and City Link.”
One would think that with such a shortage and strong demand that speculative development must surely be on the cards. However Will Nell of DTZ point out: “Given the financial caution which prevails in the market, speculative construction is unlikely to happen in the short-term, with the result that a shortage of supply and continued demand at similar levels will result in increased rents and costs for occupiers.”
Luckily there is plenty of land. Swindon, which is also suffering from tight supply according to Simon Lloyd of DTZ, has the remainder of G.Park Swindon which can accommodate bespoke buildings up to 435, 000 sq ft.
The developer recently finished work on B&Q’s 796,649 sq ft purpose-built logistics distribution centre six weeks ahead of schedule – taking just 32 weeks to bring to practical completion.
Other sites in Swindon include Graftongate and ING’s 30 acre Echo scheme which could accommodate 400,000 sq ft of space. In Bristol and especially round Avonmouth there are a plethora of sites.
The most advanced being Severnside Distribution and Roxhill’s 640 acre Centre Park which is being marketed by Knight Frank and GVA. Two phases are being brought forward and have already secured master planning meaning that as soon as a deal is secured development can take place. A 3km road is in place as well as other services. The scheme could accommodate up to 1.3 million sq ft in a single unit and the first phases have planning for a total of 4.4 million sq ft.
Central Park has already secured a pre-let under the aegis of Delta Properties and Goodman. The pre-let for 50,000 sq ft is due for completion in the spring.
Developer Bericote has launched a 62 acre manufacturing and distribution scheme in Bristol to be known as Bericote Portside. The ex-Rhodia site, which closed in 2006 and has since been demolished, could accommodate up to 1.1 million sq ft. Indeed the developer has planning permission for a single unit of up to 1 million sq ft on the site. Units are available from 100,000 sq ft. Local agents Hartnell Taylor Cook and London based Dowley Turner Real Estate have been retained to market the development.
St Modwen has a number of sites in the region including the remaining 32 acres at its Access 18 scheme, which is being marketed by Alder King and Knight Frank.
The scheme could accommodate up to 550,000 sq ft in total with a single unit of up to biggest 480,000 sq ft. There are still two plots at Gazeley’s G.Park Bristol which could take 96,317 sq ft and 250,128 sq ft.