M4 corridor warehouse hot spots are under pressure, but will developers provide much needed space or will occupiers be forced to go elsewhere? Liza Helps reports.
Enquiries for warehouse space all along the M4 corridor are unsatisfied with potential occupiers reportedly beginning to look elsewhere. Property pundits say that speculative commercial property development is needed urgently especially along the western end of the M4 motorway. Alder King’s James Gregory says: “The record low level of supply is a major concern – more speculative development is urgently needed to provide businesses with the quality accommodation they require.”
According to the company’s latest research, industrial supply across all grades and sizes has dropped to just 1.3 million sq ft in Swindon and 1.5 million in Bristol – the lowest level for 10 years.
The situation is not much better around London, Slough and Reading although there are a number of speculative schemes underway thanks to rising rent levels which can support development appraisals. According to JLL’s Western Corridor report there are currently 13 schemes under construction totalling around 880,000 sq ft. Developer SEGRO has just announced it will build two warehouses speculatively at its Skyline scheme at Heathrow near Junction 4 of the M4 Motorway – 73,530 sq ft and 80,440 sq ft respectively.
Alan Holland, director of APP and SEGRO’s business unit director for Greater London, said: “Skyline is a development in the right place at the right time. Based on feedback from our customers and our expertise in the Heathrow market, we are confident that the new units are what companies are looking for but cannot find in today’s market.”
The units will complete in Summer 2016. Letting agents are Savills, DeSouza and DTRE.
SEGRO has also speculatively developed 132,000 sq ft of space in four units in Slough close to Junction 6 and 7 on the M4 motorway. The largest at 60,500 sq ft at 12 Liverpool Road is still available. It boasts 10m eaves as well as 6 electric up and over loading doors. Letting agents is Cushman & Wakefield.
In Andover, Goodman and Anglesea Capital are developing a 336,800 sq ft unit on the 56-acre Andover Business Park. Completion is due in February 2016.
The development at Andover will comprise a mix of warehouse and office space – at 317,425 and 21,825 sq ft respectively. It will also feature a 15-metre clear height, a 55-metre yard, 337 car spaces and 58 HGV spaces. Once the unit is complete, Andover Commercial Park will be one of the few sites in the South West to provide an immediately available industrial distribution unit of in excess of 300,000 sq ft.
Charles Crossland of Goodman UK Logistics, says: “The demand for quality logistics space in the UK continues to outweigh supply, particularly in the South West. This significant development will not only put us at the forefront of the market during 2015, but it will also will help ease the supply-demand imbalance in this region.”
CBRE, DTRE and Strutt & Parker are joint leasing agents for the new unit at Andover Commercial Park.
Where speculative space is not so forthcoming, developers are securing planning permission and getting the infrastructure built to pull in a build-to-suit deal.
One of the largest schemes being pushed forward is Goodman’s 150-acre Slough International Freight Exchange (SIFE) scheme in Colnbrook that, should it get planning, could provide up to 2 million sq ft of much needed warehousing space. Just down the road in Reading, Evander Properties, has secured planning approval for a 260,000 sq ft warehouse on a site known as Island Road. Retained agents GVA are marketing the site. In Swindon, dbsymmetry – the Delancey and Barwood-owned industrial developer – has acquired a 96-acre site for a £100m logistics scheme to be known as Symmetry Park Swindon.
Robert Cleeves of Savills says: “The first phase of infrastructure is going to be completed by March 2016 and this will enable the site to be brought forward. There is outline consent for two buildings of 200,000 sq ft and one of 1 million sq ft. It’s probably the only site in the south able to accommodate 1 million sq ft and basically it is ready to go.”
There are two further schemes in Swindon, each of which could accommodate up to 400,000 sq ft, Graftongate and ING’s 30-acre Ecco scheme and the remaining land at IDI Gazeley’s G.Park Swindon. Giles Weir of JLL says: “Availability [of large Grade A space] along the M4 is diminishing with only a couple left in Bristol and Swindon, and very little, if anything, in between.”
There are second hand units including the former DS Smith facility at Portbury, south west Bristol where 195,000 sq ft has come available for sale. It is being marketed by GVA. There is also The Hub, a 90,000 sq ft warehouse in Chippenham, which has recently been refurbished.
While the may not be a plethora of buildings immediately available for occupation, Paul Hobbs of GVA notes that in Bristol and the surrounding area: “Unlike the Midlands, there are a raft of oven ready sites with B8 footprint capability at all sizes up to 1.2 million sq ft and even detailed planning permissions for immediate build outs. Similar opportunities exist across the Severn Bridge into South Wales with strategic land around Newport.”
One of the newest sites to be promoted is a scheme at the former Rolls-Royce East Works site at Filton on the outskirts of Bristol. Plans for a 1.2 million sq ft business and distribution park have been submitted by MSF Filton, a joint venture between Marcol and the St Francis Group, which would see 621,093 sq ft of industrial and distribution units and 234,332 sq ft of offices.
There are a number of other sites in Bristol including the remaining land at Bericote’s 62-acre ex-Rhodia site known as Bericote Portside. Agents are Hartnell Taylor Cook and Dowley Turner Real Estate. Bericote also has land at Avlon Park at Severnside, Bristol where there is planning for 1.3m sq ft. There are still three plots at Gazeley’s G.Park Bristol, which could take units up to 96,317 sq ft Letting agents JLL and DTZ.
Then there is the 296-acre Westgate site in Servernside, which is being brought forward by Harrow Estates and Robert Hitchins. The most forward progressing of them all is Delta Properties and Roxhill’s 600-acre Central Park scheme in Severnside.