A shortage of the right type of stock is causing headaches for occupiers even in the oversupplied North, reports Liza Helps.
From a logistics perspective the proximity of a warehouse to a motorway junction remains one of the key factors in the decision making process, but that all depends on how close that motorway junction is to major centres of population.
Looking at the northern sector Rob Oliver of GVA notes: “Where there is demand you don’t have supply.” Nowhere could that be more true than the North East section of the A1 Corridor between Darlington and Newcastle. Chris Donabie of DTZ says: “There are only two buildings over 50,000 sq ft that qualify as new and Grade A space.”
Anglesea Capital’s Drum One totals 263,000 sq ft on the Drum Industrial Estate near Durham. It boasts 15m eaves and is being marketed by DTZ and GVA at a rent of £4.35 per sq ft. “With so little stock you can keep rents and lease terms high,” says Donabie.
The only other standing building is Unit 4 Faverdale East, which totals 100,000 sq ft and is being marketed through Jones Lang LaSalle. As to sites in that North East sector, Donabie notes that while there may be plenty “the cost of building and even getting funding makes rents and lease lengths quite penal for occupiers”.
Mike Baugh of DTZ says: “Slowly but surely, supply is disappearing.” Especially stock of the preferred size. Andrew Gent of Gent Visick agrees: “There is a healthy local demand for warehouses from 20 – 70,000 sq ft but the majority of available stock is much bigger; too large for the local market but not of interest at present to the national market.”
Some of the biggest warehouses in the country can be found along the northern section of the A1/M1 Corridor and those companies that are not restricted by location have benefitted enormously from the relatively cheap deals still available as well as a cheap, skilled and plentiful labour force. There are three warehouses schemes over 400,000 sq ft close to Leeds on the A1 and M1 Corridor.
Evander and Anglesea Capital, the owner of the 1.4m sq ft Sherburn Distribution Park near Leeds, has two industrial units that could be combined to provide a 550,000 sq ft super-shed. The 190,000 sq ft and 330,000 sq ft units were originally constructed on a common grid to allow their combination at a future date.
While at Sheffield International Rail Freight Terminal (SIRFT) two buildings of 334,781 sq ft and 291,143 sq ft can be joined to create a mega-shed of some 630,000 sq ft. 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 through letting agents GVA, Jones Lang LaSalle, CBRE and Moriarty & Co.
Then there is SEGRO and Moorfield’s LPP Sheffield warehouse, formerly known as Blade, that was developed by Gazeley. The 412,000 sq ft facility 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 off the M1 motorway. Agents are CBRE and Knight Frank.
Looking into South Yorkshire along the A1 Corridor there are more buildings available. At Standard Life’s 930,000 sq ft First Point scheme in Doncaster, near to Junction 35 of the A1(M) there are two units known as Victor and Valiant totalling 246,000 sq ft and 277,000 sq ft respectively. The properties boast a range of features including 14m eaves height, fully-fitted offices with comfort cooling as well as 50m deep secure yards. While there are no plans to link these two buildings together physically, they are located next door to each other and landlord Standard Life is prepared to be flexible. Letting agents are GVA and Colliers.
Smaller units include Hellaby 140 totaling 141,845 sq ft at Junction 1 of the M18 Motorway boasting 12m eaves and 12 dock and two level access doors. It is available leasehold or freehold through Knight Frank and GVA. Further down the A1 there is AXA REIM’s Arrow at Worksop totalling 330,418 sq ft. Letting agents are GVA and Knight Frank.
Down on the M1 at Junction 26, there is Standard Life’s Langley 255 unit totalling 255,680 sq ft. It is being marketed by CBRE, North Rae Sanders and Innes England. Roger Haworth of CBRE notes: “In general there is a dearth of supply south of Junction 28 [of the M1] and greater demand while the opposite is true going north to Sheffield.”
Richard Harris of Jones Lang LaSalle agrees: “The majority of supply is in South Yorkshire, however there are a lot of bespoke requirements and occupiers with those are just going to have to go D&B to satisfy requirements.”
There are a number of strategic sites along both motorway corridors that are coming through. In Leeds there is Muse developments’ 120 acre Logic Leeds scheme which is offering warehouses from 25,000 – 1m sq ft and Bericote Properties and RREEF’s 70 acre Garforth site which could accommodate up to 1m sq ft.
Further south along the A1 there is Gazeley’s G.Park Newark site that could take a unit of 750,000 sq ft while over on the M1 there are a variety of sites including Henry Boot’s Markham Vale scheme which could accommodate up to 805,000 sq ft. Letting agent is Jones Lang LaSalle. Then there is Gladman’s 320,000 sq ft industrial development in Tankersley through joint letting agents DTZ and CBRE, and its two million sq ft Vertical Park scheme in Nottinghamshire through joint letting agents Lambert Smith Hampton and DTZ.
A little further south is IM Properties’ 45 acre Nottingham26 scheme at Eastwood that could take up to 900,000 sq ft. There is also PPG Land’s Link 62 which has the biggest immediately deliverable plot in West Yorkshire capable of accommodating up to 480,000 sq ft. Letting agents are Carter Towler and Strutt & Parker.
Of the sites not fully primed there is around 50 acres available at Sheffield Business Park Phase 2 which could take up to 900,000 sq ft of space. Occupiers with smaller requirements might consider ProLogis Park Bradford, where the developer has a site for 250,000 sq ft.