Where do the sexiest deals take place: East Midlands or Heathrow? In the old days it was Lutterworth that set hearts a-flutter. The fabulous rents near the airport now make it a contender for the number one spot. In the old days, the small size of units there pushed Heathrow into number two, but units there are slowly growing in size – certainly in density.
ProLogis is building ProLogis Heathrow, a range of units from 50,000 sq ft to 100,000 sq ft (9,290 sq m) on 35 acres (14.2ha) at Stockley Road in Hayes. It will provide a total of 617,880 sq ft (57,400 sq m) of warehousing, light industrial / production and office space along with 101 new homes. The sheds will be ready for occupation in early 2007. Knight Frank and Savills are joint agents.
Don’t expect it all to let in one go, however. ProLogis’s Paul Weston says that the trend among occupiers is to take units of less than 100,000 sq ft (9,290 sq m) to service the airport while locating their national and regional distribution centres elsewhere. “While the facilities that ProLogis usually builds are in a much larger size range, we recognise that the Heathrow market has very specific requirements,” he says.
Demand for space is so high in Heathrow that Brixton has achieved full consent, following re-submission of its planning application, for the 241,000 sq ft (22,400 sq m) two-storey X2 warehouse development at Hatton Cross. X2 will be the first example outside the Far East of a multi-storey warehouse which offers full HGV access to the upper areas and Brixton will be progressing with its plans to commence development in December this year, with completion before the end of 2007.
Brixton is going for the same market as ProLogis at Polar Park, where it is building two units of 59,956 sq ft (5,481 sq m) and 122,042 sq ft (11,334 sq m). They are scheduled to be available for occupation this month.
Brixton recently agreed two lettings at the eight-unit 137,000 sq ft Phase two of Premier Park, Park Royal. It signed an agreement for lease with Katsouris Fresh Foods on a total of 35,792 sq ft in units five and six at a rental of £390,133 pa (£10.90 per sq ft – £117 per sq m). The lease runs for 10 years with six months rent free and a tenant’s option to break after five years on payment of a six month break penalty. Katsouris will also remain tenants of Brixton in four other units totalling 67,000 sq ft (6,225 sq m) in Park Royal.
The overall scheme was completed in July 2005 and over 101,000 sq ft (9,383 sq m) has now been let at rents averaging £10.55 per sq ft (£114 per sq m) which is more than eight per cent above the appraisal rent at commencement of the development. Two units of just over 36,000 sq ft remain available at asking rents of £11.50 per sq ft (£124 per sq m) through Brixton’s letting agents CB Richard Ellis and King Sturge.
In Hayes, Abacus has begun constructing the second phase of Waterway Park, Swallowfield Way. Six units totalling 81,150 sq ft (7,539 sq m) range from 8,288 sq ft to 14,850 sq ft (770 sq m to 1,380 sq m) are being added to the existing five units, with completion also anticipated this month.
Six units at 300-325 Riverside Way are currently under construction in Uxbridge. They range from 2,520 sq ft to 21,065 sq ft (234 sq m to 1,957 sq m) to a total of 31,170 sq ft (2,896 sq m) of floorspace. Developer is Slough Estates.
Other existing new space locally includes Spacewaye Park, Heathrow, which offers four warehouse units to let in sizes from 15,560 sq ft to 36,900 sq ft (1,446 sq m to 3,428 sq m). It is situated on the North Feltham Trading Estate.
Further west, sheds get bigger. ProLogis is letting its 302,000 sq ft (28,060 sq m) DC2 unit at South Marston Park in Swindon, next to the 350,000 sq ft (32,500 sq m) it built for Honda.
In Bristol, Cabot Property Partnership – formed out of Burford – is developing the third phase of Cabot Park. Innovate, the cold-storage company, is to build 160,000 sq ft (14,900 sq m) for its own occupation.
In Bristol’s second hand market, a modern warehouse/distribution centre of 250,000 sq ft (23,225 sq m) is available at Western Approach Distribution Park. This building was part of the first phase of the development at this major scheme, which is on-going.
Over the bridges into Wales and ModalSwitch is a new logistics park, adjacent to the Cardiff International Freight Terminal, Wentloog, offering design and build opportunities. Sizes from 30,000 sq ft to 430,600 sq ft (2,787 sq m to just over 40,000 sq m) are available on leasehold or freehold terms. About four miles from the city centre, the scheme is alongside Network Rail’s London to South Wales mainline, offering direct road/rail opportunities.
In the second hand market, the former Whitehead Steel Works at Newport offers, to let, a range of production bays with ancillary accommodation, including offices. Featuring overhead craneage, the bays vary in individual sizes from 10,200 sq ft to 91,000 sq ft (947 sq m to 8,461 sq m). The site of 38 acres (15.4ha) also accommodates concrete or tarmac hard-standing areas suitable for various open storage and parking uses.
Movement by landlords is an indicator of a market about to see rents rise. Earlier this year, Slough Estates International completed the off-market purchase of the holding entity of the Treforest Industrial Estate in Cardiff for £63 million. This is SEI’s first entry into the Welsh market and is in line with its stated ambition to acquire large business parks in strategic locations with good revenue streams and strong development potential. Treforest Estate comprises 130 acres (52.6ha) with 9.6 acres (3.9ha) of development land and is located adjacent to the A470 Cardiff to Merthyr Tydfil dual carriageway just north of Cardiff.
It has been an established trading estate since 1936 and is 4 miles (6.4km) north of junction 32 on the M4. The estate currently leases space to 97 customers, including the BBC, GE, Honeywell, WH Smith, Barclays and Lloyds TSB. It already has one million sq ft (92,900 sq m) of business space and a rental income of £4.03 million a year. Advisors on the deal were King Sturge for SEI and Holley Blake for Dunedin Property.