“Alive with Opportunity” is the Regional Development Agency’s strap line which appears on all of its marketing material. It is highly appropriate for the distribution sector with a number of drivers of change influencing a geographical switch away from the traditional Midlands locations towards the Yorkshire region.
The primary factors relate to changes in the routeing of imports into the UK, the increasing level of traffic congestion in the Midlands regions, the scarcity and increasing costs of labour supply, the increased footprint requirements of the main operators allied to the scarcity and cost of large scale development sites in the established areas together with the forthcoming changes in European Union working time directives reducing driver hours.
The relocation of the means of production to Eastern Europe and the Far East has meant an increased demand for container space at the established South and South-east coast ports resulting in higher unit cost and approaching unit capacity. This has led to a renewed interest in the surplus capacity and cheaper unit costs offered by the ports within the Humber Estuary.
The relatively traffic free motorways within the Yorkshire regions and the availability of large tracts of flat land adjacent to motorway junctions with employment allocations allied to the availability of labour and the comparably lower rental and capital values for properties in this region are all key factors in promoting this location.
The trend has been established by some of the largest manufacturing and retailing names with BMW selecting Thorne for its National Car and Parts import centre, IKEA constructing some 69,750sq m (750,000sq ft) and Next some 60,450sq m (650,000sq ft) at West Moor Park off J4 of the M18 and B&Q building some 74,400sq m (800,000sq ft) at Redhouse Interchange off J38 of the A1M.
With serviced land values as low as £200,000 per acre and rents for units such as B&Q at under £4 per sq ft the economic argument alone is strong enough without factoring in the labour cost and availability statistics. Increased build costs together with rising demand for the region will lead to some increases in rental and capital values but with land values in excess of £500,000 per acre in the Midlands direct contrast is still significant.
The private sector has already responded to the potential with ABP announcing a joint venture development with DFDS for a new £35M roll-on roll-off (ro-ro) ferry terminal at Immingham to be completed by the end of 2005. This will accommodate the five new ro-ro ferries commissioned by DFDS and will take away the need for the ferries to lock into and lock out of Immingham docks, thereby increasing turnaround times and increasing cargo potential.
ABP is also close to securing consent for Quay 2005, its proposed 7.5-hectare deep water container terminal at Hull. The extension of the port facility will enable Hull to accommodate the largest container vessels with traffic direct from the Far East.
South Yorkshire has had the benefit of Objective One European Status with access to grant monies for a wide range of infrastructure and training initiatives. The provision of Strategic Economic Zones along the M18 and M1 corridors has facilitated the provision of existing and future development sites and has put in place a series of training initiatives to provide a labour force with appropriate skills.
To ensure a continued pipeline of development opportunities, Yorkshire Forward has undertaken the first stage of its Development Partnerships schemes entering into Public / Private Sector Joint Venture initiatives to bring forward development on a number of strategic sites throughout the region.
The involvement of private sector partners provides the additional capital needed to complete the required infrastructure and create speculative development at these sites. Sterling St James is promoting the 190-acre Centreport site at Goole, off J36 of the M62, while Gladman Developments is promoting the 70-acre site at Sherburn in Elmet. Both schemes will involve speculative development with some 9,300sq m (100,000sq ft) in three buildings proposed as a first phase at Centreport and a planning application submitted for a 46,500sq m (500,000sq ft) speculative unit at Sherburn.
Construction has begun on the new terminal building for Finningley Airport to the south-east of Doncaster with the first charter flights due to commence at Easter 2005. A new link road, either from J3 or J4 of the M18 motorway, will be constructed to facilitate access to the airport and with one of the longest runways in the UK there is the potential for freight cargo at this location.
Rail freight terminals already exist at Trax Park, Doncaster, off the M18’s J3 and at the Wakefield Europort off J31 of the M62. Helios Properties, together with EWS Railway, is looking at the development of a further rail terminal – SIRFT – off J34 of the M1 motorway to the east of Sheffield. This is adjacent to the 50-acre site which Gazeley has recently acquired at Shepcote Lane, Sheffield, where two pre-lets of 27,900sq m and 9,300sq m (300,000sq ft and 100,000sq ft) have been signed.
Redhouse Projects have applied for planning permission for a 15m high 60,915sq m (655,000sq ft) speculative cross dock unit at Redhouse Interchange on part of the remaining 70 acres of its scheme off J38 of the A1M.
The above demonstrates the breadth of both public and private sector development initiatives aimed at providing a pipeline of development opportunities across the region together with significant improvements in terms of infrastructure with investment in the East coast ports, the development of Finningley as a regional airport and the continued investment in rail freight terminals.
With an available labour pool backed with the benefit of sector specific training initiatives under-pinned by economic land and building costs it is becoming increasingly difficult to dispute that Yorkshire, as a Region, is indeed alive with opportunity. n
Andrew Gent is director at Gent Visick. Tel: 0113 244 1111.