It’s as much an occupiers’ market as it has ever been,” says Richard Sullivan of Savills commenting on the increase in available warehouse space along the M4 corridor, particularly around Heathrow. Indeed Jones Lang LaSalle’s Western Corridor Market report says: “For the first time in many years there has been a build up of supply around the airport and there are several new buildings in direct competition with one another.”
The report adds that the volume of space available rose by 15 per cent in the six months to December 2007 and there is 740,000 sq ft currently under construction and due to be completed in 2008, which creates an effective supply of 6.6 million sq ft for occupiers who are able to wait.
New developments include Brixton’s X2 double decker warehouse at Hatton Cross, totalling 241,000 sq ft. The building can be let to a single occupier or has the capacity to be subdivided into eight units. There is controversy regarding the quoting rents for the building at £17.50 and £19 per sq ft against the £13.50 – £14 per sq ft quoting average for the area. However Jones Lang LaSalle points out: “Although X2 does not have airside access, it is as close as it is otherwise possible to be and the asking rents reflect a substantial premium for this proximity.”
In direct competition is ProLogis’ ProLogis Park Heathrow scheme where there are three units available of 67,794 sq ft, 73,996 sq ft and 94,788 sq ft. Planning permission has recently been granted for two further buildings – DC5 and DC6 – will provide 73,830 sq ft and 132,072 sq ft of secure, distribution space with ancillary office accommodation. Knight Frank and Savills are letting agents.
Scottish Widows has recently completed its Heathrow South Cargo Centre, which comprises a single large unit of 120,000 sq ft and four smaller units available through joint letting agents CBRE and Vail Williams.
Then there is also SEGRO’s LHR1 scheme totalling 95,000 sq ft where joint letting agents Jones Lang LaSalle, DTZ and de Souza are quoting £14 per sq ft. Close by Keir Developments has a 300,000 sq ft development opportunity at Western International market.
Goodman, in conjunction with Madison Land, has a 65,000 sq ft shed known as Focus 4 on Longshot Lane in Bracknell. Market rumour suggests that hairdressing group Tony & Guy might be persuaded to leave West Drayton to secure the shed which is being marketed by Savills and Jones Lang LaSalle at a rent of £8.95 per sq ft.
For those occupiers whose business is not airport related sheds such as these can be acquired at a substantial discount to those closer to Heathrow. Problem is there aren’t too many about at the moment. This is something that Gerald Eve is particularly aware of and is core to its marketing plan for the 99,700 sq ft former Whitbread warehouse on Acre Road, Reading. Gerald Eve is joint agent with Colliers CRE.
The only shed currently built further along the M4 Corridor of any size is Gazeley’s 255,825 sq ft warehouse at G.Park Thames Valley at Thatcham. It is available through GVA Grimley and CBRE. Also in Thatcham, Ivan Scott of Strutt & Parker says he is marketing ING’s Transigo scheme jointly with Jones Lang LaSalle, which totals 156,000 sq ft in nine units ranging from 6,500 – 96,000 sq ft.
Next stop is Swindon where immediately available sheds seem thin on the ground. Orion totalling 138,000 sq ft and boasting 7m eaves is a refurbishment being marketed by Knight Frank. There are design and build options available. Gazeley has its G.Park Swindon scheme, which can accommodate up to 684,235 sq ft in a single unit. Letting agents are Atisreal, Whitmarsh Lockhart and Burbage Realty. The developer has also got planning permission for a two unit scheme in Newbury where it could accommodate one unit of 90,000 sq ft and one of 121,000 sq ft.
In Bristol Paul Hobbs of GVA Grimley says: “There has been significant speculative activity but most of the floor space sits at the ‘big shed’ size post 100,000 sq ft and the gross figures distort the true picture of availability.”
ProLogis has two units including Crossflow550, a 550,000 sq ft cross-dock warehouse available through Knight Frank and CBRE. Gazeley also has two units at its G.Park Bristol scheme, one of 120,000 sq ft and one of 210,000 sq ft.
Hobbs adds: “There are some really good site opportunities coming through at Filton (ProLogis), Clevedon (ROK), South Bristol (various), Yate (Chancerygate), but these are going to be at least 18 months from delivering product.
The next immediately available buildings are in Wales says Rob Russell of DTZ. “Developer Frontier Estates is due to complete on its 182,000 sq ft building in Chepstow shortly. It will be the largest purpose built distribution unit in Wales.”