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A flurry of deals at the end of last year and at the beginning of 2008 has left occupiers with very few options especially if they are looking for immediately available big sheds.

Richard Evans of Jones Lang LaSalle warns: “In the next couple of years there is going to be a huge amount of growth created by Olympics in 2012 and there is going to be the best part of bugger all down south.”

Recent deals have seen direct mail company DSICMM taking a 178,000 sq ft warehouse at AMB Property Corporation’s 320,000 sq ft AMB East London Distribution Park on a ten-year lease. Jones Lang LaSalle, M3 and Savills acted on behalf of AMB.

Fashion house H&M (Hennes & Mauritz UK) has secured the 86,182 sq ft Unit 1 at Brixton’s Greenford Park scheme in West London.

The retailer has taken a ten-year lease at an initial rent of £985,000 pa that equates to £11.43 per sq ft. Letting agents were Altus Edwin Hill and CB Richard Ellis.

Glass merchant and manufacturer Ultra Tough has taken 102,219 sq ft of space at Falcon Property Trust’s Capital Connect warehouse in Welham Green. The company negotiated a 15-year lease at a rent of over £600,000 a year. Lambert Smith Hampton and Atisreal advised the landlord.

In yet another deal internet fashion retailer ASOS (As Seen on Screen) snapped up ProLogis’ 158,250 sq ft warehouse DC158 (Azimuth) in Hemel Hempstead a mere six weeks after practical completion.

The retailer took a ten-year lease with a tenant-only break option in year five, at a rent equating to £7.70 per sq ft. The warehouse boasts 11.5m eaves, 14 dock and four level access loading doors, two-storey offices and 199 car parking spaces. It is located close to Junction 8 of the M1 motorway. Jones Lang LaSalle and CBRE acted for ProLogis.

Even the most stubborn of buildings has been snapped up. After four years on the market the Olympus building on River Road in Barking has finally found an occupier – London City Bond, a leading privately owned tax warehousing company, which offers the wine and spirit trade a comprehensive nationwide logistics service.

The company will use the warehouse as a consolidation point so its access issues, which had put off other potential occupiers, will not be such an issue.


The 272,695 sq ft building was taken at a rent in the region of £7.75 per sq ft. It has 12m eaves, 36 dock and four level access doors as well as 56 HGV parking spaces and two yards extending to 45m. It was built by ProLogis and forward sold to PropInvest in 2006. Letting agents are CB Richard Ellis and Savills.

There are rumours of other deals close to or just signed further diminishing supply. These include the sale of ProLogis’ Imperium 315 at Basildon, which is believed to have been let to the New York Stock Exchange as a data storage centre for a price in the region of £110 per sq ft. It has 12m eaves and has 29 dock and seven level access doors. It boasts a 64m yard and is being let by Colliers CRE and CB Richard Ellis.

Another data centre storage company, Sentrum, is also believed to have bought ProLogis DC191 building in Woking. The 191,386 sq ft warehouse has 12m eaves and a 50kN/sq m floor loading. It is being marketed through Savills and CB Richard Ellis.

Iron Mountain has just signed an agreement for the lease of two buildings at Thames Gateway developer Tilfen Land’s White Hart Triangle development in Thamesmead. Glenny and King Sturge acted for Tilfen Land. Iron Mountain was represented by CBRE.

In Edmonton, landlord Invista is supposed to have secured a deal with a recycling company on its 193,000 sq ft Atlas building. The building boasts 12m eaves, 14 dock levellers and four level access doors, a 50m yard and three storey offices with an atrium. Letting agents M3 and Savills are quoting £7.95 per sq ft.

Close by, at Waltham Cross, Henderson’s 177,900 sq ft Magnum25 building is believed to be close to an offer from one of either Stubbins or Findel (GLS) a distributor of educational supplies.


The building incorporates 9,760 sq ft of offices over two floors and has a large secure yard with parking for 143 cars on an eight acre site. It boasts 12 metre eaves and has 14 dock levellers and three level access doors. Letting agents King Sturge, CBRE and Knight Frank are quoting £6.75 per sq ft.

Looking at what is immediately available makes swift reading. There is Gazeley’s Voltaic building in Dagenham totalling 232,965 sq ft on an 11-acre site located adjacent to the A13. It has 12m eaves, a 50kN/sq m floor loading 20 dock levellers and three level access doors, 43 HGV and 144 car parking spaces.

On an eco-level it boasts solar photo-voltaics, 15 per cent roof lights, a solar thermal hot water system, ground source heat pump and low water use appliances. Letting agents are Altus Edwin Hill and Colliers CRE.

In addition, there is Sainsbury’s surplus 670,000 sq ft distribution facility at ProLogis’ The Bridge. Cushman & Wakefield is the letting agent. The buildings were originally let at a rent believed to be in the region of £7.50 per sq ft.

There is AMB’s smaller unit at the East London Distribution Park totalling 140,000 sq ft. The building has 12 metre eaves, a 50kN/sq m floor loading, a yard extending to 49m as well as 14,359 sq ft of office space boasting raised floors and comfort cooling.

Then, Charlie Howard of M3 says: “We are marketing a 124,000 sq ft warehouse in Edmonton on Picketts Lock Lane owned by Henderson. It was under offer but it is now available and we are quoting £5.95 per sq ft. That’s at quite a discount to other warehouses in the region, nearly £2 cheaper.” The warehouse has 5.5m eaves and is being jointly marketed with Glenny.

Towards Hemel Hempstead there is PropInvest’s M1Stal warehouse scheme with two buildings of 260,000 sq ft and 170,000 sq ft. The large unit boasts 12m eaves, 23 dock levellers and two level access doors as well as a 50kN/sq m floor loading and a 50m deep yard. Letting agents Savills and CBRE are quoting £8.50 per sq ft.

The market immediately around Heathrow seems a lot healthier, according to Paul Chatterjee of Knight Frank: “There have been a lot of developers spec building down there including Brixton and ProLogis.”

Despite relatively sluggish take-up in recent years Gerald Eve’s Prime Logistics Report states that developers “clearly have confidence in the region as approximately 57 per cent of new development since 2003 has been speculative.”


Developer Brixton has several schemes in the area including Greenford Park where it has the 100,423 sq ft Unit 2 – which can be split into three units from 18,900 sq ft, as well as the 241,000 sq ft X2 – the UK’s first double deck warehouse. The developer also has Polar Park where it has one building totalling 122,000 sq ft available at an asking rent of £13.50 per sq ft through letting agents CBRE and King Sturge.

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 – which will provide 73,830 sq ft and 132,072 sq ft of secure, high quality distribution space with ancillary office accommodation. While DC5 has a clear internal height of ten metres, DC6 has an eaves height of 12 metres and a second planning consent means that DC6 can be subdivided into two units of 61,150 sq ft and 67,157 sq ft if required. Letting agents Knight Frank and Savills are quoting £13 per sq ft. In addition, 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.

There are of course second hand units; Tim Johnson of King Sturge says he has two on his books. There is Threadneedle’s 142,000 sq ft Cubic warehouse, formerly occupied by DHL, in Hemel Hempstead which is on the market on a new lease at £6.75 per sq ft. It is fully racked out. Joint agents are King Sturge and Stimpsons.


Then there is the 265,000 sq ft former Comet building at Riverway Harlow, which has a passing rent of £4.90 per sq ft available on a short term let. Overall, Charlie Howard of M3 says: “The pipeline is limited especially north of the river however, there is definitely more space out west at present but there is also a lot more competition.”

So what does all this mean for the occupier? Evans says: “It means two things: first, [with the reduction in space available]if we look at the medium term, rents will start to increase. You could say it is the start of the rot for occupiers.

“Incentives will decrease whereas 12 months ago there was a lot of fat in the margins and developers and investors could afford stonking rent frees and so on, it is now harder for developers to do that deal. Secondly, there will be longer leases – certainly 15-year leases could become more common again.”

Chip Mitton of Altus Edwin Hill agrees. He says: “Because yields have gone out landlords will need to stand firm on rent as they cannot afford to fall back – this means occupiers will be faced with paying higher rents or lower incentives in the future. At present rents have stabilised but [developers and landlords’]ability to put in a lot of incentives is diminishing.”

Although Kevin Storey of Cushman & Wakefield is not keen to say where rents may go in the next year or so he does agree that lease incentives are getting tighter for occupiers.

He adds: “There is not a lot of speculative development planned for the next 12 months. Most of the bigger developers have pulled in their horns if not already committed.”

However there are opportunities for D&B and perhaps when the climate is right many of these sites could see speculative development in the future.

Recently Canmoor and Standard Life secured a 5.2-acre site from drinks company Diageo in Park Royal where they plan to build a two unit scheme called Thunder & Lightning totalling 150,000 sq ft. Gerald Eve and CBRE have been retained as letting agents. Planning permission is being sought. Close by Keir Developments has a 300,000 sq ft development opportunity at Western International market.

There are some very much bigger opportunities in the eastern sector with ProLogis’ Howbury Park rail freight interchange scheme in Erith just off Junction 1A of the M25. The 156-acre distribution park could accommodate up to 2.1 million sq ft of rail-connected space. The £80m project is expected to take hundreds of lorries off the roads and, according to ProLogis, save 35,000 tonnes of carbon emissions a year and create up to 2,500 new jobs.

As well as this scheme, says Jim Frankis of King Sturge, there is also DP World’s London Gateway scheme where buildings of up to a million sq ft plus can be accommodated.

Frankis says: “The whole scheme is portcentric and with the recent Harbour Empowerment Order in place we are looking at bringing in occupiers on a D&B basis.”

In total, London Gateway covers over 1,800 acres.

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