There is no doubt about it that in the last 18 months there has been a step change in attitudes towards the South West and even South Wales when it comes to locating distribution warehouses in the area. And this has both its good and bad consequences.
The most noticeable consequence is the number of developers securing sites and building speculatively in the region. The focus of their attention has been Avonmouth.
Paul Hobbs of GVA Grimley says: “Avonmouth is the central focus of the distribution market at Junction 18 of the M5 motorway near Bristol, as retail distributors in particular see their supply chains extend and become stretched into the far South West and Wales.”
According to Rob Cleeves of King Sturge there is currently more than 1,334,240 sq ft of space under construction in speculative development schemes across the region, in 12 sites, with almost one million sq ft of it in the Avonmouth area alone. There is Gazeley’s G.Park Bristol scheme at Western Approach in Bristol, with two units totalling almost 322,800 sq ft and at Cabot Park, Bristol, where ProLogis is developing two distribution units totalling more than 645,600 sq ft.
The Gazeley units of 206,000 sq ft and 117,000 sq ft boast 12m eaves as well as 50m yards. The larger unit has 18 dock doors and four level access loading doors and a two storey office totalling 9,645 sq ft. It has parking for 96 cars and 40 lorries.
The smaller unit on the other hand has ten dock doors and two level access loading doors. Both units benefit from a range of environmental features. According to Gazeley partner Solar Century, the new SB Solar Energy System installation on the warehouses in Bristol will generate 6484 kWh of electricity per year, saving 100 tonnes of carbon dioxide emissions over 25 years. King Sturge and DTZ are joint letting agents for the site.
The ProLogis scheme supports the largest single speculative building available in the market Crossflow 550 – a 550,000 sq ft cross docked warehouse, which will be ready for occupation in early 2008 and according to joint agents Knight Frank and CBRE, the scheme is already attracting interest from potential occupiers.
George Glennie of ProLogis says: “ProLogis has traditionally developed distribution facilities in the South East and East Midlands, but we recognise that the South West is becoming increasingly important as a logistics hub – particularly in light of EU legislation restricting the distances that commercial drivers can travel in one day.”
At RD Park Avonmouth, Goodman is well on with the construction of the Constellation Wines unit, at 856,000 sq ft on 37 acres, the largest distribution pre-let in the south west ever. Only eight acres remain for development.
Hot on the heels of the news that St Modwen has sold the Antalis unit for nearly £2m is the news that the company is developing a further 80,000 sq ft of speculative space at its 55 acre Access 18 scheme in Avonmouth.
Rob Skelston of St Modwen, said: “The shortage of good quality new build units for medium-sized operators in the Bristol area has created strong interest in the space being developed at Access 18 and has therefore attracted good interest from investors. Even when we have completed the current speculative phase there will still be room to develop another 600,000 sq ft of industrial and warehousing space on either a bespoke basis or through further speculative phases.”
The buildings will be ready in March 2008. Alder King is letting agent.
One of the other consequences of the increasing popularity of the region is the rise in land values. Mr Hobbs says: “Land values across the region are now touching the £400,000 per acre mark for serviced sites with smaller plots edging £600,000 per acre where there is competition from the office development markets.”
With these rising and a general lack of supply in the most popular spots developers and occupiers have looked elsewhere with the result that there has been activity in areas such as Bridgewater and Gloucester and even in South Wales, where schemes and land are located close to the motorway network. Supermarket retailer Morrison’s had bought the 400,000 sq ft former Gerber food factory at Express Link near Bridgewater.
Papers were signed after the former Gerber foods factory was identified as a key site for the whole region from Gloucester to Penzance. New work is expected to begin in the New Year, transforming the factory into a fruit and vegetable packing centre. Alder King, DTZ and Lambert Smith Hampton represented TCN UK.
Frontier Estates opted to develop a 26 acre new build scheme that will provide a total of 524,617 sq ft of warehouse accommodation near Chepstow in South Wales.
Three units are available to lease or purchase ranging from 50,000 sq ft to 200,000 sq ft with the option of dividing one of the units into three self-contained properties of 50,000 sq ft each.
Will Creedon of Lambert Smith Hampton says: “The properties are designed to a high specification that includes 12m eaves, fully fitted office accommodation, electronically operated loading doors and docks, gatehouse controlled secure yards and quality landscaping.”
The first speculative unit of 180,502 sq ft is already under construction with completion anticipated June 2008.