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Want to rent somewhere in Manchester and the chances are you will be dealing with someone with a Mancunian accent. Many developers from outside the city are simply allergic to it. ProLogis and Gazeley traditionally avoid it. The closest anyone from outside Manchester wants to get to it is a game at Old Trafford.

Why should this be? Commercial property is still the best place to invest money in Manchester, according to new research by Knight Frank. Medium and long-term investments in offices and industrial premises continue to pay healthy dividends and there is no let up in demand from the big institutions and overseas buyers.

Abid Jaffry, head of investment at Knight Frank’s office in Manchester, says: “The growth of the service sector is a key driver. As it expands, the demand for quality office and industrial accommodation increases around main centres, such as Manchester and Liverpool. Both cities are a magnet for investment and rents have grown steadily, particularly in the office market.” (Pity then for Knight Frank’s logistics offer that its head of north-west industrial services in Manchester, Dean Young, recently quit to join industrial agency Bailey Deacon Hamilton as an equity partner).

Occupiers love Manchester, so what’s the problem? Jones Lang LaSalle is bringing two buildings to the market shortly on behalf of Adidas following the consolidation of the Adidas and Reebok brands and their move into a new purpose-built facility in Trafford Park. JLL is letting Adidas’s 163,000-sq ft distribution centre in Stockport, which includes a 22-metre high bay element. It is also letting Reebok’s 166,000-sq ft facility in Lancaster.

Both are available for sale or to let and will be vacated by the end of 2008 when the combined company moves into the new building of 360,000 sq ft. Quoting prices are £6 million for Stockport and £5 million for Lancaster. JLL’s Colin Chivers says he will consider leases but is not quoting terms.

Among small lettings, King Sturge let Summerfield House in Salford to Salford Royal NHS Foundation Trust. The 16,205 sq ft building includes 2,631 sq ft of warehousing, 55 parking spaces and an acre of land for additional parking. Rent is £153,000 per annum and it’s a 10-year lease. AS Green and Partners and Canning O’Neill acted for Carillion, the owner of Summerfield House.

Outside the core Manchester market, Manchester-based developer Property Alliance Group has secured two pre-lets at its 135,000 sq ft scheme at Abbotsfield Industrial Estate in St Helens.

Office furniture supplier EFG Matthews will take 27,500 sq ft of the four-unit scheme. It agreed a five-year lease at an undisclosed rent. At the same time, a veterinary hospital signed for a 12,000 sq ft office building on the site.

Developers who build in the North-West are currently working flat out. Available industrial space has reached record levels, according to research by King Sturge.

The property consultant says speculative development has exploded in the North-West, Yorkshire and Midlands. Around 40 per cent of the 15.5 million sq ft of speculative development in 131 schemes across the UK is in these three areas.

King Sturge’s report also shows that availability is on the up, rising 4.5 per cent or nearly 10 million sq ft across the UK in the last six months. Rents grew 1.6 per cent in the year to June.

Slow rental growth and increasing availability sits uncomfortably with the Confederation of British Industry’s Summer 2007 Survey of Property Trends predicting a deterioration in demand for industrial and manufacturing space in the second part of 2007.

Gazeley is responsible for some of these new schemes. In the North-West, it has secured planning consent for three new buildings totalling 888,000 sq ft, close to the M6 near Liverpool.

Developed in a £65 million 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. The site is on the M57.

As usual with a Gazeley scheme, the 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.

Gazeley reckons these features will bring annual cost savings of more than £10,000 to customers through reduced energy consumption.

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 and agents Colliers CRE, King Sturge and CB Richard Ellis will market the space.

Manchester-based Rok Developments plans a £12 million industrial scheme on the Wardley industrial estate in Swinton, close to the M60 and M61 motorways, after buying the 7.8 acre former paper storage unit from News International.

Rok plans to demolish the existing buildings and replace them with 100,000 sq ft of industrial space.

Rok is also working on a 40,000 sq ft industrial scheme at the Parkway industrial, retail and leisure park at Denton and a mixed office and industrial scheme at Atherleigh Business Park, Wigan.

The traditional areas to build logistics space in the North-West are Warrington, Haydock and, increasingly, Wigan, Middlewich, Northwich, Skelmersdale, Chorley and Crewe.

In Cheshire, Sladen Estates is well advanced with construction of P150, its speculative high bay unit in Winsford. The 149,007 sq ft speculative warehouse will be completed in January 2008.

Situated on a 7.5-acre site, it has frontage on to Road One of the estate. The high bay unit will have a clear internal eaves height of 12 metres, a 66-metre separate lorry yard, 12 dock level and two level access doors.

The scheme will also provide trailer parking and a two storey integral office and a 121 space car park on a fully landscaped site.

It too, has a green aspect. Vale Royal Borough Council granted planning consent with a condition that 10 per cent of the energy required were generated from renewable energy sources.

Sladen Estates construction director Darren Chapman says: “The industry is becoming increasingly focused on reducing the impact buildings have on the environment. We were keen to explore how we could address this positively on P150 and worked with the council to achieve their requirements for this project.

“Energy efficient buildings are attractive to occupiers and their customers who are now keener to buy from environmentally responsible companies.”

An incoming occupier to P150 will join H&M Hennes, Linpac, Henkell and Caterpillar among others on the industrial estate, which is close to the M6 at J18 and J19 and, via the A556, to the M56.

Joint agents M3 of London and Lamonts of Nantwich are marketing both a lease and a long-lease package for the scheme.

Steve Moriarty of M3 says: “As always with projects like P150 the interest level really increases once construction is advanced. In the current distribution market, operators are working to ever tighter deadlines so to be in a situation where you can offer them a new purpose designed unit, ready to go is a great advantage.”

Outsider developers may be chary of building in Manchester but investors love it and schemes have frequent changes of landlord.

ING Real Estate Investment Management recently paid £11 million for the final phase of Beva Investments’ Merlin Park, Trafford Park. Merlin is a 126,000 sq ft speculative industrial scheme of three units. Net initial yield was 6.2 per cent. Davies Harrison advised ING.

Congestion is a problem in Manchester. The M60 has the UK’s second greatest traffic movement after the M25 western area according to the Department of Transport’s latest figures. With more than 110,000 vehicles a day, the M60 has now overtaken the M25 eastern area.

The Highways Agency in Manchester has formed a congestion working group to look at ways of keeping drivers on the move in the area – drivers may have seen them at the September Truckfest at Haydock Park.

The group has been set up by the agency’s Area Ten team which is responsible for all Highways Agency roads and motorways in Cheshire, Merseyside, Greater Manchester and South Lancashire.

The group’s remit is to investigate the causes of congestion, encourage closer working between partners on the area’s roads and help provide solutions to make drivers’ journeys more reliable.

The group includes representatives from the police and HA service providers Atkins and AmeyMouchel. Among recent HA initiatives in the area is new electronic signing giving junction-to-junction journey times.

Construction of a free flow filter lane on the M56 Junction 7 slip road is underway, which will benefit users of Altrincham Business Park such as Fred Olsen. The £1.5m project will upgrade the existing entry point to the eastbound M56 to two lanes instead of the existing one.

Perhaps Manchester’s problems is the unofficial system of Mancunian/non-Mancunian apartheid. The Liverpool area is notably friendly to outsider developers, for example. Gazeley UK planning director Don Morgan speaks up for Liverpool City Council. He says planning for [G Park] went through “extremely smoothly”, thanks to the “efficient processing of our proposals by Liverpool City Council”. Which non-Mancunian will speak up for their experience building in Manchester?

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