The M6 corridor has gained a reputation for cheap land, plentiful labour and easy access – no wonder it has become so popular. But popularity comes at a price.
Mike Price of Knight Frank says: “There is a realisation now that occupiers will go further north [along the M6 Corridor]as opposed to the Golden Triangle and because of that developers have been cashing in over the last five years. Land prices have doubled from £200,000 an acre to £400,000, but luckily rents have not done the same.”
Cameron Mitchell of Jones Lang LaSalle says: “More recently, prime industrial locations along the M6 Corridor have moved away from the traditional areas of Warrington and Haydock. Stretching further along the motorway, Chorley, Crewe and Stoke on Trent have all witnessed significant success over the last few years.
“However, the restricted supply of existing sites and those coming forward along the M6 Corridor has created strong occupier demand. This current lack of supply is pushing occupiers both east and west to look for the next available opportunity.”
Robert Rae of North Rae Sanders adds: “Occupiers are being attracted to North Staffordshire by the availability of labour and the communications. The new A500 route through Stoke-on-Trent is now open providing a clear access route from the M6 to the A50, which in turn provides an excellent dual carriageway route between the M6 and the M1.”
Indeed, looking at the North West sector Steve Brittle of Atisreal says: “The increased level of demand within the North West region has pushed up costs of both land and buildings which has led developers and occupiers alike to consider what have previously been thought of as ‘less glamourous’ locations to fulfil their requirements.
“These alternative, comparatively cheaper areas, which have seen improvement in take up and demand, include areas of Cheshire and locations along the M6 such as Middlewich, Northwich, Wigan, Skelmersdale and Haydock.
“The prime driver of these occupational decisions is cost. Land values in locations around the M6 are slightly lower than in Trafford Park and Warrington, which are in the region of £350,000 plus per acre. Further enhancing the desirability of these locations is the improved road and motorway networks in the area that have made sites along the M6 more accessible.”
“For occupiers,” says Brittle: “Labour availability is another vital factor in the decision making process. [They] are finding that, in the prime areas, labour is more transient. That has its own inherent problems of retaining staff on a regular basis and having to pay a higher hourly rate to attract new staff. These problems are not encountered in areas such as Cheshire, which tend to secure a much more loyal labour force.”
Developers are definitely beginning to show more confidence in sites around the M6 motorway corridor.
Andrew Pexton of GVA Grimley says: “The M6 has seen more success than the M62 corridors with substantial sites at locations such as Crewe, Skelmersdale, Chorley and Preston either being built or due to go on site shortly. This reflects the predominant demand for north south distribution and site availability, which is limited.
Brittle says: “The M6 has always been a popular industrial and distribution location for the Midlands and we are starting to see this success progressing upwards towards the North West region.”
Carl Durrant of King Sturge reports that while there is much interest from occupiers in taking units along the M6 corridor especially for larger buildings, the amount of sites that might be able to deliver such buildings is becoming more challenging to acquire in terms of availability and planning.
“People have fond memories of factory operations where there were highly skilled jobs and everyone was happy but the current economical environment sees every household wanting to be able to buy cost effective products and being able to get value for money and to get the best price those goods are manufactured in the Far East, China and the former Eastern Bloc and that will not change as we cannot keep up with the wage rates offered in those worlds. Manufacturing has been withdrawn in this country because of that, although there is a strong section that seem to think that if they restrict a site and allow no B8 (distribution warehouses) in an employment area they will encourage manufacturing. There are only so many large manufacturing transactions that take place and only a modest few that are pure manufacturing. The idea that manufacturing provides more jobs and better quality jobs for people is unfounded.
“Planners and those taking a historical view [of employment trends in the UK]need to wake up and smell the coffee. You would think that with so much evidence it would make sense for them to do so.”
While big shed development is not particularly popular, local and regional government can be persuaded to accept it – usually along the lines of sustainable development.
Advantage West Midlands has a 35-acre site at Chatterley Valley up for sale through Lambert Smith Hampton and top of the agenda is sustainability. It has already secured guarantees for its 64-acre Sideway site where it demanded sustainable development from ProLogis.
The developer successfully beat 20 other bidders including Gazeley to secure the site and the buildings being built are ecologically state of the art, designed with triple-glazed north lights to provide increased natural daylight and reduce electricity; air tight buildings to reduce heat loss to a level well above the standard British Regulation requirements; solar air heating systems in the offices; low energy light fittings; photovoltaic panels; and sustainable, urban drainage systems, to harvest rainwater from roofs, for irrigation and grey water usage.
In conjunction with Nottingham University, the project will measure the true impact of “renewables” such as solar panels and planted walls, wind turbines and low-energy fittings, some of which have yet to be tested in real situations.
In addition, half of the site will be turned into new, ecological habitats, including a wetland habitat and an ecological corridor along the Chitlings Brook. There will be extensive tree planting and the creation of new woodland habitat, plus a feature landform, and footpaths, for staff and local people to use as an educational and recreational resource. In addition, a new wetland habitat will be created for small amphibians, in particular, for the Great Crested Newt, which is a protected species.
At ProLogis Sideway the developer is preparing a scheme of 105,000 sq ft for small enterprise units together with up to a further 550,000sq ft of warehouse space to its latest sustainable guidelines. King Sturge and North Rae Sanders are agents.
With its focus on promoting green warehouses and eco technology Gazeley has also secured favourable attention from planners. It recently secured permission for 888,000 sq ft of space at G.Park Skelmersdale close to the M6 near Liverpool.
Don Morgan, planning director at Gazeley UK says: “Planning for this site has gone through extremely smoothly, which highlights not only the economic and social viability of the plans, but also the efficient processing of our proposals by Liverpool City Council.”
The approved plans for the buildings include a number of eco-effective measures such as rain water harvesting and recycling, energy efficient lighting, solar panels, low water use appliances and FSC approved timber, all provided as standard fit out by Gazeley. These environmentally friendly features of the design will not only reduce the environmental footprint of the buildings, but also deliver significant annual operating cost savings of over £10,000 to customers through reduced energy consumption.
Although the first unit will be developed speculatively by contractor, GSE UK, Gazeley is also seeking pre-lets for the further two buildings which have received planning consent. Gazeley will quote rents of £4.50 – £4.75 per sq ft. Letting agents are Colliers CRE, King Sturge and CB Richard Ellis.
Developed in a £65m joint venture with financial services company, MetLife, the delivery of the three units will be phased over the next two years, with the first speculative build due to start construction on site by the end of 2007.
Bruce Topley, development director at Gazeley UK, believes this site will attract local occupiers, multi national businesses, retailers and third party distributors. He says: “The site is ideally situated, bang on the M57, with immediate access to the regional and national motorway network, most importantly the M6 and M62. Not only that, but the close vicinity to a working population of around 1.5 million means there is a readily available pool of skilled and unskilled labour.”
Looking at what is available in the rest of the market, Pexton reports that the mid-Cheshire market is still strong with four new builds in the pipeline, one at Middlewich – Unit 75 Midpoint totalling 350,000 sq ft through developer Pochin; two in Winsford P150 developed by Sladen Estates and totalling 149,007 sq ft and Patrick Properties Premier Park totalling 150,000 sq ft and Graftongate’s Orion Park totalling 150,000 sq ft.
HelioSlough is undertaking the Revolution site in Chorley, which will provide three units comprising 198,000 sq ft, 106,000 sq ft and 232,000 sq ft.
Looking at availability along the corridor there are a variety of new and second hand units. There is the former Michelin warehouse at the Campbell Centre close to Junction 15 of the M6 motorway. The building totals 420,000sq ft, which is available as whole or in parts through North Rae Sanders and CB Richard Ellis with quoting rents starting from £2.75 per sq ft.
At Lymedale Cross close to J15/16 of the motorway, HelioSlough with CBRE Investors is speculatively developing a 415,000 sq ft warehouse known as 415@Lymedale Cross. The building boasts 15.8m eaves as well as 36 dock and two level access doors. Letting agents Lamont, M3 and King Sturge are quoting £4.75 per sq ft.
Then, of course, there are a variety of sheds from ProLogis at its ProLogis Park, Sideway and ProLogis Park, Stoke developments. North Rae Sanders jointly with GVA Grimley and Lamonts are marketing the two remaining plots, which could accommodate warehouses of 120,000sq ft and 380,000sq ft.
There is an 88,000 sq ft building being marketed by North Rae Sanders and Jones Lang LaSalle next to the 360,000 sq ft former Argos building, which is also available to lease at Junction 13. The Argos unit has the benefit of 18ft eaves and dock loading and is available on a new flexible lease at a quoting rent of £3.45 per sq ft. Letting agents are Savills and North Rae Sanders.
At ProLogis Stafford, King Sturge and Atisreal are marketing three buildings from 70 – 230,000 sq ft totalling 430,000 sq ft at a rent of £5.25 per sq ft.
Close to Junction 12 and just off the M6 Toll, developer Wrenbridge has acquired a seven acre site for £2.8m with joint venture partner Gleeson at Kingswood Lakeside Business Park in Cannock Staffordshire from Morston Assets. The site was bought in joint venture with Gleeson and has outline planning permission for B1, B2 and B8 uses. A detailed planning application has already been submitted for a 126,000 sq ft warehouse facility, which is being built speculatively.
Jamie Hockaday of Wrenbridge, says: “The M6 Toll Road has opened up a number of opportunities for the south Staffordshire area, which now offers distributors an exceptionally advantageous location for key depots.
“At Junction 10 near Darlaston,” says Mike Price of Knight Frank, “Coltham Developments is building a 321,509 sq ft warehouse to be known as Citadel for Goodman.”
A junction down and Opus Developments has Point One at Opus Nine, which totals 105,000 sq ft. It boasts 12m eaves, eight loading docks and a floor loading of 50kn/sqm.
In Birmingham there is The Hub close to Junction 6 where landlord PRUPIM is developing a 120,000 sq ft speculative warehouse, due to complete in October.
Nick Stillman of Sladen Estates says the developer has a scheme called Hollymoor with four units ranging from 28,111 sq ft to 90,000 sq ft in the second phase. Letting agents M3 and King Sturge are quoting £5.95 per sq ft.
The developer also boasts Tetron Point in Swadlincote where there are two buildings one of 141,000 sq ft and one of 93,000 sq ft, both of which are completing shortly. P141 boasts 11m eaves and a 50kn/sq ft floor loading. Letting agent is King Sturge.
ProLogis has started on the last unit at its ProLogis Park Coventry scheme. The building H2 will total 104,000 sq ft and is being marketed at £5.95 through joint agents North Rae Sanders and D&P Holt.
The largest warehouse in this area according to Durrant is Rivet, a 220,000 sq ft building being developed by Frogmore, which has just come available. Letting agents CB Richard Ellis and King Sturge are quoting £5.75 per sq ft. Finally there is Graftongate and Legal & General’s 95,000 sq ft Link 7000 scheme at Crosspoint Business Park. Half the unit is let but the remainder totals 47,390 sq ft.
Automotive parts company Quinton Hazell has sold its 160,000 sq ft unit in Nuneaton to move to a new complex in nearby Hinckley.
Deeley Properties has bought the Nuneaton site and is hoping to attract another major distributor to the area. The high bay warehouse – which sits on 11 acres with a full length loading yard and 17 access doors in total – has a fibre reinforced concrete floor and is available fully sprinklered.
The secure site comes with 15,000 sq ft of integral purpose built offices and over 150 car parking spaces. It is being marketed by North Rae Sanders and Atisreal.