According to Andrew Aherne of Lambert Smith Hampton the number of transactions for new speculative warehouses over 200,000 sq ft has decreased. Although he does add that: “there are still serious enquiries in the market place”.
The most recent deal in this size bracket was the Adidas one in the Spring of 2007. The sportswear company took Key Property Investments’ – the joint venture partnership between St Modwen and Salhia Real Estate Company of Kuwait – 430,000 sq ft warehouse scheme on the former Hotpoint site in Trafford Park on a 15-year lease at a rent of £4.75 per sq ft.
The facility, which occupies a 10-acre site fronting Westinghouse and Mosley Roads, was handed over to Adidas in late November just 34 weeks since the start of the build. The company is well advanced with its multi-million fit out, which will see the creation of a state-of-the-art distribution hub for its Adidas, Reebok and Rockport brands. It is scheduled to be operating by the summer.
The building boasts a number of green elements such as rainwater reharvesting, the use of crushed material from the 700,000 sq ft of existing buildings demolished to make way for the scheme, extensive on-site water attenuation and the provision of extensive landscaping including over 400 trees on site. It is expected that some 250 new jobs will be created. King Sturge advised.
Since this deal it has been rather quiet. Steve Brittle of Atisreal says: “Big super sheds have struggled in the North West to find tenants.”
There is Rockpoint and Evander Properties’ The Vault at Liverpool International Business Park, a warehouse/distribution centre of 618,592 sq ft available to let or for sale freehold. It is located a short distance from Liverpool’s Lennon Airport, and the motorway system is accessed at junction 6 of the M62 via the A561 and A5300 dual-carriageways.
The building has 15m eaves, 54 dock levellers and two level access doors with a floor loading of 65kn/sqm. It can accommodate up to 159,980 pallets with a narrow aisle configuration. In addition, it boasts 15,481 sq ft of modern office space with suspended ceilings. Outside it has 110 lorry and 370 car parking spaces within a secure fenced yard. CB Richard Ellis and M3 are letting agents. They are quoting rents from £3.95 per sq ft.
Then there is Goodman’s 625,000 sq ft Pioneer Point scheme in Ellesmere Port, which has yet to find a tenant despite being marketed either as a whole or with the ability to split.
The cross-dock facility boasts 62 dock levellers and 18 level access doors. It has 55m yards and 76 lorry trailer and 316 car parking spaces on a 30-acre site. The building also has 20,000 sq ft of offices as well as 18m eaves, which can accommodate 128,000 pallet spaces with VNA racking or 70,000 pallet spaces with a reach truck.
It is being marketed by CB Richard Ellis, M3 and Lamont at a quoting rent of £4.25 per sq ft.
There is also Patrick Properties’ Galaxy at Knowsley Industrial Park, a new warehouse/ production facility of 478,105 sq ft available to let or possibly for sale through agent King Sturge. The building has 15m eaves.
There are also a number of large refurbished units including, Mr Brittle says, North Manchester Property Alliance group’s 250,000 sq ft unit at Walkenden. The warehouse boasts an eaves height from 5.5 – 6m with six level access loading doors and the ability to add more. The property is available both freehold and leasehold through joint letting agents WHR and Atisreal.
While there is a dearth of take-up in larger units suitable as national distribution centres, the same cannot be said of warehouses under 200,000 sq ft. Indeed such has been the activity that SEGRO has seen a staggering 400,000 sq ft let in recent months at its Heywood Distribution Park near Rochdale.
Jane Leedham of SEGRO says: “The volume of deals at Heywood Distribution Park over the past month has been phenomenal.”
One of the largest deals was to independent logistics company, Eddie Stobart, which agreed to occupy M2, a 103,095 sq ft unit.
Eddie Stobart secured an extension to an existing contract with Robert McBride Group. The transaction will see one of the companies occupy the unit for a three-year lease on market terms.
The speculatively built unit boasts 10 dock level doors with levellers; 12 metre haunch height; two level loading doors; roof mounted sprinklers and heating throughout.
Flexibility was key in the decision to move to the park. Eddie Stobart was impressed by Heywood’s ability to provide an immediate solution together with the flexibility to grow its operation considerably on the park.
Richard Butcher of Stobart says: “The flexibility and ability to trade up into a larger building as the contract grows was a compelling reason in our decision making process.”
Indeed it was this flexibility, which also saw global toy distributor Character Options snap up the M6 Unit, a 128,168 sq ft warehouse. The building, which boasts 5.5m eaves, drive in and dock level loading to three elevations, had been marketed at £3.75 per sq ft.
The speed at turning the deals round has also played its part. The fact that SEGRO was able to do this in two days led to Royal Mail, including Parcelforce, taking the B9 and B2 units, totalling 142,760 sq ft, at a rent of £5 per sq ft. The companies will occupy the units to help reinforce their services during the impending Christmas rush.
The final deal saw JD Sports take a further 30,700 sq ft in addition to the 81,300 sq ft unit it already occupies at the Park.
Stuart Murray of Savills says: “SEGRO’s ability to respond quickly to tenants’ requirements, has meant a high level of interest in space on the Park. Within days of receiving interest from Royal Mail and JD Sports they were in occupation at the Park, a strategy which is undoubtedly proving to be successful.”
The joint agents on Heywood Distribution Park are King Sturge and Savills.
Elsewhere Rob Trevor of HelioSlough says that the company has also secured a 106,000 sq ft letting at The Revolution in Chorley. The deal was done on a 15-year lease at £5.10 per sq ft.
While Highcross is boasting of securing a five year deal at a rent of £3.55 per sq ft with TDG for Gateway at Crewe Gates just outside Crewe town centre. The 213,00 sq ft industrial facility has recently been refurbished. Lambert Smith Hampton acted for Highcross while King Sturge advised TDG.
There are a number of units still available including two second-hand warehouses being marketed by CB Richard Ellis and King Sturge for Threadneedle Property Investments.
The Bear, located on Ditchfield Road in Widnes, is a 103,070 sq ft single storey high bay warehouse. The unit, which sits on 5.8 acres of land, has the capability of being extended to up to 150,000 sq ft and benefits from a 40 m yard depth.
In St Helens, The Chill Out forms part of the Abbotsfield Industrial Estate and is situated between junctions 7 and 8 of the M62. In total, the building is 178,060 sq ft; although there is the opportunity to split the unit into 85,120 sq ft and 92,940 sq ft facilities due to its part chilled, part ambient configuration.
Alastair Newman of King Sturge says: “These are two high specification buildings which are ideal for distribution and storage or manufacturing companies looking for a strategic site from which to run their operations. In both instances the units are available on a leasehold basis, although Threadneedle are open to offers for outright sales.”
Another second hand building is Brixton’s Altai Building totalling 120,801 sq ft with an eaves height up to 6.3m and loading via seven steel roller shutter electric doors. King Sturge is letting agent.
Of the new buildings there, Legal & General has Fusion a 210,000 sq ft unit at Trafford Park being marketed by CB Richard Ellis and King Sturge. The building boasts a two-storey office of 8,000 sq ft while the warehouse has 15m eaves and 16 dock and three level access loading doors.
Despite seemingly slow transactions and a number of properties on the market developers are still keen to acquire land in the region.
Lambert Smith Hampton has put Ashton Fields, a 15-acre development site between Salford and Bolton, under offer, with the planning application to be submitted shortly by the developer. This will involve a phased speculative development.
A further site that Lambert Smith Hampton is marketing is on behalf of English Partnerships at Staveley Road, Skelmersdale. This is the last signpost plot of development land within Skelmersdale for sale. A number of parties with a strong track record for delivering speculative industrial schemes were interested in the site and bids were sought for December 2007.
Mr Aherne says: “The industrial property market in the north west has always remained relatively in balance. This is principally driven by the ongoing constrained supply of land.
Brian Birtwistle of DTZ says: “For well-located sites land prices are certainly climbing. A perfect example of that is the recent sale of the Kellogg’s 5.2-acre site in Trafford Park and depending upon how you analyse this it certainly seems to generate land values of well in excess of £400,000 per acre.
“There have been no recent land transactions close to motorway junctions. The latest was HelioSlough, which acquired approximately 30 acres from English Partnerships at Junction 31A of the M6 and reportedly paid £360,000 per acre.
Julien Kenny Levick of Colliers CRE says: “Land prices vary throughout the region with Liverpool and Lancashire at between £300,000 – £350,000 per acre on say 5 acre plus lots with Warrington at the £400,000 – £450,000 range. However the supply of land available generally, and particularly within the M60 conurbation, remains extremely tight and levels of £500,000 plus per acre are not uncommon. Indeed, rumour has it that the Kellogg’s site in Trafford Park is under offer at way in excess of these levels.”
Mr Birtwistle says: “Currently the most interesting sites to look at will be Omega at North Warrington and Kingsway Business Park at Rochdale, which will be interesting where there is capacity for large-scale sheds.
“Other than those two sites Gazeley have Axis at Knowsley, Liverpool and Skelmersdale, but the next series of distribution sites won’t be available in the market for another three or four years due to the planning process but also due to site availability with one of the most interesting being Carrington where Shell, National Grid, Peel, Patrick Properties and Maro all have significant land holdings. However the market will be watching with great interest what happens at the old Parkside Colliery site at Newton Le Willows adjacent to Junction 22 of the M6 where the planning issues will no doubt be discussed at length.”
There are a number of schemes in the development process but it is not at all sure if these will be built speculatively. Bruce Topley of Gazeley says: “We have a number of schemes in the region including G.Park Liverpool where we are speculatively building a 360,000 sq ft unit which is due for completion in the spring. There is planning for 890,000 sq ft in three units. It is likely we will do the rest of the site on a bespoke basis we could do up to 600,000 sq ft on the remaining land.”
Committed to sustainable development, 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 annual cost savings of more than £10,000.