Over the past eighteen months the take up of commercial property in Northampton has now reached a point where at the time of writing there are fewer than fifteen industrial / warehouse buildings available from 5,000 – 30,000 sq ft, which occupiers can choose from in the industrial sector.
Looking at the dynamics of the market it is easy to understand why this might be the case but it is of concern that the situation is unlikely to change in the immediate future. What Northampton urgently needs is new build development. The Northamptonshire Enterprise Partnership remains extremely supportive of the development sector but unfortunately they have little or no influence over the actual supply of land coming through the development pipeline. The news that Prologis are to develop a further 1.1 m sq ft on the latest phase of their Pineham development at J15a of the M1 is good news for the town and while we should not ignore the B8 distribution sector, the lack of land being allocated for the development of units of sub 50,000 square feet at a price per acre that is commercially viable is at the root of the problem.
For different reasons there is also a real shortage of good quality office space in Northampton and this is having a tangible knock on effect on rental values which is good news for Landlords but is also something that Tenants should be aware of in an increasingly competitive market. Quoting rents for high quality Grade B refurbished space are now at £16 per sq ft which represents an increase of over 25% from the bottom of the market in the dark days of the recession. Clients of Drake Commercial are helping to address part of the shortage of good quality office space with the soon to be completed refurbishment of QUADRA on Pavilion Drive, Brackmills. Following on from the letting of 4,000 sq ft to Allied Irish Bank in January 2016 we are close to completing the refurbishment of a further 12,000 sq ft in the same building which will provide single open plan suites from 4,000 to 8,000 square feet at a very competitive quoting rental of £14.50 per sq ft.
There also is some positive news on the various new developments that are taking place in the town centre. Project Angel in Northampton town centre is scheduled for completion in early 2017 and will house the County Council’s new office Head Quarters but will also provide office space for occupiers looking for a presence in the heart of the town centre. On the Enterprise Zone, Northampton Borough Council and Kier have now agreed Heads of Terms to build a new 60,000 sq ft high quality office development at the western corner of the site opposite Northampton Railway station. These developments, combined with active progress on the new Northampton University campus, will all help provide a much needed impetus to a town centre which has suffered a significant downturn in recent years alongside many other similar sized market towns.
Much of the land relating to the town centre developments mentioned above was originally in Local Authority ownership or acquired directly by the Local Authority specifically for development purposes. Addressing the shortage of land for industrial development is however more of a challenge as the disposal of that land is largely in the hands of private landowners. It is therefore extremely difficult to control the nature of development and this will be a challenge for the Local Authority and the development sector as a whole if they want to see much needed new development of smaller buildings aimed at local occupiers. The signs are however positive that the commercial market continues to grow albeit there remains a great deal of uncertainty as to what will happen to the economy following the outcome of the referendum at the end of this month.
Nicholas Roberts, June 2016.