The industrial sector continues to set the pace across the whole of the UK and in particular the ‘Big Box’ warehouse market. This can be evidenced on a regional level across the Midlands, and even more so throughout the Northamptonshire M1 corridor, where developable land is at a premium.
What drives this development is occupier demand. 2017 take up stats were slightly down on 2016, which was a record year for large warehouse deals, but otherwise take up figures were largely in line with years previous, showing that that the market is sustainable. Take up of this type of stock in 2017 is reported to be circa 25 million sq ft and Savills figures suggest just over 8 million sq ft of this was in the East and West Midlands. Much of this take up is from internet retailers and their associated logistics partners, such as Amazon, DHL and XPO.
This consistent demand has given the confidence to developers to continue speculatively building this type of product. Northamptonshire has always been popular but Daventry is a location that has historically attracted smaller development. With land at a premium throughout the region and the improved access to Junction 16 of the M1 via the new link road, this is changing. Gazeley had success with their 300,000 sq ft unit which they let to Amazon. Prologis have had steady success on their Apex Park scheme and of course DIRFT, where they have recently built a new 116,000 sq ft. Closer to the centre of Daventry, Canmoor also have planning on the site next to Ford for up to 330,000 sq ft. At the time of writing this, it is of course noted that the property occupied by Gardman at Apex Park, will of course need rebuilding after the recent fire.
All of this shows there is much positivity within the market, even with Brexit looming. Whilst there will no doubt be a few speed bumps to negotiate as the Brexit deadline looms, so far the industrial sector and particularly that of ‘big box’ warehouses appears relatively robust. This is supported by Tritax, specialist investors in large logistics property, who have stated in recent news items that Brexit will actually benefit this market, as more domestic companies look to base their warehousing in the UK.
The smaller and mid-sized regional industrial property markets remain similarly active, with the underlying theme one of steadily increasing demand, combined with a lack of good quality stock. In the wider Daventry district for example, we have recently acted with clients the Wigley Group to let 42,000 sq ft of warehouse space at J18 of the M1, to KB Transport. The Wigley Group purchased the unit whilst it was vacant less than a year ago and have been proved right in their belief that the location would suit a logistics operator.
Elsewhere, we have been heavily involved in a new speculative development at Woodford Halse, known as Manor Business Park. The scheme has proved popular and has built up over 80,000 sq ft of industrial and business space, with scope to double this. Most recently we have let a brand new 15,000 sq ft unit to Singer Body & Paint, who are well established but new to the area, which shows the attraction of the Daventry district and wider region.
Tom Drake – March 2018