Extensive infrastructure improvements in recent years have already enabled further regeneration across the wider ‘Thames Gateway’ area. The improvements made to the A13 trunk road which runs from Bow to Thurrock have been instrumental and remain key in attracting new development in not only the logistics sector but across a range of uses such as residential, leisure and retail.
Improvements in transport infrastructure across the region are proving to be a key driver behind the rise in confidence seen by some of the UK’s leading industrial and logistics developers. Evidence of this renewed optimism can be seen at Barking, which has seen significant investment in recent years. ProLogis acquired the former Montague Meyer site on River Road over two years ago and has
speculatively built a 25,110sq m (270,000sq ft) single distribution warehouse unit. ProLogis also has another joint venture, with Astral Developments, at Circular 13 Barking, which is a three-unit speculative development of 930, 3,534 and 8,370sq m (10,000, 38,000 and 90,000sq ft). One of the most successful industrial schemes in the Barking area has been another former Montague Meyer site, which industrial developer iOG bought in 2002 and speculatively developed two phases totalling circa 16,740sq m (180,000sq ft). This is almost fully let.
Casting our eye eastwards along the A13 corridor, Dagenham has also seen a mix of development opportunities over the past few years. The decline of Fords’ operations has brought about both short- and long-term opportunities through the London Development Agency. The existing surplus buildings – circa 27,900sq m (300,000sq ft) – at Chequers Lane are currently available to let on short-term flexible leases and the agents have reported good interest.
Innogy has also been considering long-term objectives with its significant land holding at Dagenham. However, it has recently sold 10.2 acres to Gazeley which is to shortly complete the speculative development of 3D Magic; a 21,576sq m (232,000sq ft) distribution warehouse unit.
Gazeley has also neared completion on one of the largest single speculative developments in the South-east at Purfleet comprising 45,551sq m (489,800sq ft).
In Thurrock there has recently been a strong level of both developer and occupier activity in this area, whereby Rosemound, ProLogis and Gazeley have been increasingly active. In addition, several smaller developers have been bidding fiercely for sites of between two and five acres to develop the small- to medium-size multi-unit schemes.
Improvements in road infrastructure have been accompanied by further government support and resulting in additional brownfield land holdings being released into the market, allowing for the wider area to be opened up for regeneration purposes.
This unlocking of prime regeneration opportunities across the Thames Gateway has triggered an influx of developer activity which has begun to meet the latent occupier demand; producing good levels of take-up across the region. Most interestingly, there has been a noticeable increase in the demand for the larger warehouse requirements in excess of 9,300sq m (100,000sq ft) – this demand chiefly stems from the food and non-food retailers and the respective third-party logistic contracts.
The regeneration of the Thames Gateway region is clearly not solely centred on the logistics market. It is a visionary project about building sustainable communities, where people genuinely want to work and live. However, the importance of the logistics sector to the success of this project must not be under-estimated.
With the extensive infrastructure improvements along the A13 and the proposed improvements in transport across the region, via a new and improved rail link, trunk road improvements and river crossings, there will inevitably be an improvement in the regional economy as far as the supply and demand characteristics for industrial premises are concerned.
The Thames Gateway has undergone a significant transformation and we predict will continue to be an area of significance for logistics operators and their customers seeking regional hubs as the area continues to evolve. n
Charles Howard is with DTZ Debenham Tie Leung. Tel: 0207 643 6552.