Warehouses built from October 2013 will be exempt from empty property rates fuelling expectations that there will be a plethora of speculatively built sheds by the end of the year.
In the Autumn Statement 2012 Chancellor George Osborne announced that new developments built between 1 October 2013 and 30 September 2016 will be exempt from empty property rates for 18 months.
David Jones of GVA commented: “This will remove a hurdle to developers concerned about the rates obligations they will face on more speculative development. We would hope to see development opportunities grow over the next couple of years.”
There are a lot of developers already contemplating speculative development and this news will only give greater confidence. ProLogis had already indicated that it could possibly speculatively develop one of the two 300,000 sq ft buildings at its ProLogis Park Dunstable
The 32 acre site at Boscombe Road, Dunstable had planning for a 755,000 sq ft unit. However, in line with market demand on the southern M1 corridor, ProLogis submitted a new planning application to Bedfordshire Council for two distribution units of 300,000 sq ft and 360,000 sq ft respectively.
Andrew Griffiths of ProLogis said: “We will make a decision on speculative development once the revised planning application has been approved. Our decision will also be subject to on-going pre-let discussions
“There is a shortage of new facilities in this size range in the South East market.”
Letting agents on the scheme are Colliers and Savills.
SEGRO has also indicated that it will go ahead with the speculative development of the first phase of its Origin distribution warehouse site in Park Royal, London, subject to securing planning.
The development will cover 160,000 sq ft in three stand-alone buildings of 36,000 sq ft, 53,000 sq ft and 69,000 sq ft, all with secure yards. All of the units will be highly sustainable and constructed to a BREEAM ‘excellent’ standard.
The planning decision is expected in February 2013 and once approved, construction on the speculative units is expected to commence in March 2013, with completion of this phase in late Autumn 2013. Letting agents are CBRE, Doherty Baines and Jones Lang LaSalle.
While this is good news for developers with oven-ready sites however, those developers and landlords with vacant buildings will continue to pay 100 per cent rates.