Retail growth fuels demand

LinkedIn +

A 48-hour working week for drivers implies that the so called ‘super sheds’ may be too few and far apart to be reached effectively within the new guidelines.

“We may well see the development of secondary ‘satellite’ depots – of less than 150,000sq ft – acting as transfer sites which will supplement the main centres,” suggests Mair, who points to the M5 and north M6 corridors as having the potential to fulfil this criteria. “We have witnessed a good deal of activity in the Stoke-on-Trent area – a location which is equidistant between the Birmingham and Manchester conurbations,” he adds.

The opening of the M6 Toll Road has also had a positive effect on the opening up of new locations across the region. Although not an heavy goods vehicle (HGV) route itself, it has relieved the heavy flow on the M6 and enabled the focus of demand to shift and diversify. The A38, A50 as well as the M6 and M1 corridors are all helping to compensate for the lack of land in the more traditional supply areas bounded by the ‘golden triangle’ of the M69/M6/M1.

Enquiries for units in the 23,250sq m (250,000sq ft) bracket can still find a number of choices across the Midlands at schemes including Fradley Park, Lichfield; Centre 38, Branston; Hams Hall; ProLogis Park, Erdington; Prime Point, Stafford and the Big Berry Droitwich. Those searching to satisfy requirements between 23,250sq m (250,000sq ft) and 46,500sq m (500,000sq ft), however, have a more restricted range of options with three main contenders – Magna Park, Lutterworth; Birch Coppice, Tamworth and Kingswood Lakeside, Cannock.

Requirements exceeding 46,500sq m (500,000sq ft) will not necessarily find suitable sites amongst this list and operators looking for NDC locations where a single building of 93,000sq m (one million sq ft) is achievable have one main alternative – The Hub, Birmingham. This Prudential-funded 95-acre scheme between J6 and J7 of the M6, is being developed by Opus Land and Frontier Estates’, and has planning for up to 186,000sq m (two million sq ft) of distribution and production space in a range of buildings from 4,650sq m (50,000sq ft).

“Proximity to the M6 is an obvious draw, but we also have a total catchment labour pool of over 600,000 people – a resource which is several times larger than other schemes in non-city areas such as Magna Park; Carlton Park, Leicester and Sherwood Park, Nottingham,” says Opus director Richard Smith.

A change of use for a brownfield site to distribution is often frowned upon by local authorities who mistakenly assume that the job creation potential of such schemes will be of lower density than more traditional usage, according to Frontier Estates’ James Howarth. “In contrast to the usual reaction, Birmingham City Council has been exemplary in appreciating that modern logistical operations demand a range of employment and do not differ from manufacturing as significantly as might first appear,” says Howarth.

The Hub hopes to generate between 2,000 and 4,000 positions for local people and, as such, will be a major employer and a key player in the regeneration of this inner city area.

In terms of cost-benefit, rental levels in the Midlands are on average around 20-25% lower than the South-east – not surprising when you consider the price differential in the cost of land. Wages are also commensurately higher in the South-east and this is further exacerbated by a paucity of suitable labour in some locations – a trend which is, not as yet a characteristic of the West Midlands’ employment scene. Furthermore, in a region which has experienced a decline in traditional manufacturing industries, those previously engaged in production can more easily make the transition to distribution-related work, accustomed as they are to a shift pattern.

And is speculative build on the rise, triggered by a perceived rise in demand for immediate accommodation? Occupiers require flexibility – sometimes needing to be

Flexible lease specialist Industrious says that growth in the high street retail sector is driving up enquiry levels for distribution space in the West Midlands. According to the company, which operates a national leasing call centre, demand is coming from major high street retailers as well as from logistics companies in the process of tendering for new contracts.

Diane Moore, regional manager at Industrious, comments: “The rebirth of Birmingham as a major retail destination thanks to the roaring success of the new Bull Ring Shopping Centre has brought new demands on logistics companies and on warehousing space in the region. The increase in enquiries from retailers in fashion, furniture, food and drink received at our call centre is noticeable.”

The largest distribution park in Industrious’ portfolio of about 1.4 million sq m is Hartlebury Trading Estate near J6 of the M5, south of Birmingham, which currently has a 5,580sq m facility available as well as one of 4,000sq m and 7,161sq m.

Share this story: