With little available space in the region what options are available for occupiers? Liza Helps reports.
Following two years of exceptionally strong take-up in 2011 and 2012, Grade A space fell by 31 per cent by mid 2012 to stand at one million sq ft, its lowest level in 13 years – nearly a year later space is even more constrained, according to Jones Lang LaSalle’s West London and Thames Valley research.
Shaun Rogerson of Jones Lang LaSalle says: “There is a massive under-supply. In fact in Reading there are only six buildings available over 20,000 sq ft.”
Indeed Jon Sleeman of Jones Lang LaSalle notes: “The market balance in the western corridor is moving slowly in favour of landlords and away from occupiers, as highlighted, in particular, by the very low level of good quality available stock.”
What is available now carries strong headline rents, for example Cushman Wakefield Investors’ 64,000 sq ft Craigard One warehouse in Thatcham which has nine loading doors, including five dock levellers, on-site car parking for 60 cars, with further provision for lorry parking. Internally the unit has an eaves height of 8.1m rising to 12.1 at the ridge. It is being marketed by Jones Lang LaSalle and Haslams at £8.50 per sq ft. SWIP’s Unit 6 warehouse at Worton Grange totals 47,658 sq ft. The building boasts 6m eaves, five surface level and two dock level doors. It is being marketed by Jones Lang LaSalle and Sharps at £7.95 per sq ft.
Buildings over 100,000 sq ft are very few and far between at the Eastern end of the M4 corridor. Indeed occupiers will have to compromise if not on location then certainly on age. The only available building in the Reading region immediately available is PRUPIM’s 98,430 sq ft former Whitbread Logistics warehouse built in 1990 located on Acre Lane which is being marketed by GVA and Cushman & Wakefield at £7.75 per sq ft.
For those willing to be more flexible there are larger units to be had in Didcot where Prologis has taken back a warehouse and refurbished it. DC1 Prologis Didcot totals 166,583 sq ft and boasts 12m eaves with 14 dock and three level access doors. It is being marketed by Savills, Deloitte and DTRE. Rogerson says: “With limited availability logistics companies are having to consider D&B.”
Again sites are limited immediately off the Eastern M4 corridor. Legal & General Property has a site with planning permission for 77,000 sq ft in Bracknell known as Lovelace Park while SEGRO has a 7.5 acre site off Imperial Way in Reading which could accommodate up to 185,000 sq ft. It is being marketed by CBRE and Haslams. It is rumoured that GeoPost will take a 38,000 sq ft pre-let on a plot of 3.5 acres.
Neil Seager of Haslams says: “As the supply of warehouse/distribution and industrial property in Reading continues to reduce this site is one of very few that can offer warehouse / industrial design and builds. A good proportion of the second hand stock in Reading and the surrounding area is compromised and unsuitable for certain types of occupiers.”
Looking further afield there are more opportunities; London-based Diageo Pension Trust and developer Lingfield Securities has submitted plans for a one million sq ft warehouse scheme on land west of Didcot Power Station, in Didcot, Oxfordshire.
Representatives for the firm say the proposed development could feature two separate buildings on a 62-acre site with one large unit totalling up to 949,471 sq ft and the other just over 120,000 sq ft or three units of 523,000 sq ft, 425,000 sq ft and 120,000 sq ft subject to planning. The scheme could provide up to 2,000 jobs.
A planning application for the site known as G1ANT will be submitted to Vale of White Horse Council shortly.
Diageo submitted an outline planning application to the Vale council in 2011 to build a 74,000 sq ft storage and distribution warehouse on part of the same site.
Savills is marketing the site which has direct access to the A34 and is 14 miles from Junction 13 of the M4 motorway. Goodman is also seeking planning permission at its Andover Business Park in Hampshire. It is looking to secure permission for a 579,500 sq ft building and it also has a plot that could accommodate a further 250,000 sq ft of warehousing space. Savills, Jones Lang LaSalle and Carter Jonas are letting agents.
Toby Green of Savills says: “After that there isn’t much until you get to Swindon.” Here he says there are two schemes each of which could accommodate up to 400,000 sq ft, Graftongate and ING’s 30 acre Ecco scheme and the remaining land at Gazeley’s G.Park Swindon. He notes: “There is some 150 acres near the junction of the A420/A419 which although not even zoned for employment yet, could ease demand in the future.”
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. 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.
Developer Bericote has its 62 acre Bericote Portside scheme on the ex-Rhodia site, that could accommodate up to 1.1 million sq ft. Hartnell Taylor Cook and Dowley Turner Real Estate have been retained.
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.