BUOYANT NORTH WEST INDUSTRIAL MARKET CONTINUES TO SOAR

With a raft of speculative development either planned or underway, the NW industrial property market continues its upward trajectory as we begin 2020. Recent completions by the likes of Pin Property at Rugby Park in Oldham (60,181 sq ft) and by St Modwen at Stonebridge 52 in Knowsley (52,000 sq ft), the development pipeline is looking strong going forward. This will be a relief to occupiers who have witnessed a clear lack of new stock coming to the market in recent years. Such schemes will also address the shortage in this “mid-range” size of between 50-100,000 sq ft as developers have tended to focus on the big box sector of 200,000 sq ft and above in order to attract the likes of Amazon and other online retailers. Schemes currently underway include Himor’s Carrington Gateway where a number of units are under construction ranging from 10,000-100,000 sq ft will be available.

Underpinning this surge in development activity is strong occupier demand. Many of the older 1980s style properties which still dominate the market are now becoming functionally obsolete for many end users now demanding higher eaves heights, larger service yards and superior energy-saving credentials which older premises simply cannot provide. However, whilst occupiers will welcome the current and planned development activity, they will not be keen to learn that rents have pushed forward over the past 2-3 years. Indeed, quoting rents on these new schemes range from £6.50-£6.95 psf meaning occupiers will no longer be able to secure favourable terms if they wish to secure top-quality new space. It will be interesting to see what rents will be agreed at Stoford and TPG’s Icon scheme at Manchester Airport where record rents over and above the aforementioned figures will no doubt be achieved. Both speculative and build-to-suit options are planned here. Record rents have already been set at Harworth’s Multiply site at Logistics North in Bolton where £7.75 psf has been achieved on two lettings at the end of 2019 on new units between 20-30,000 sq ft.

Although the number of schemes underway will be welcomed in the market, there remains the underlying issue of a lack of stock. This is in almost all size ranges from small 1,000 sq ft starter units to larger 50,000 sq ft units. Much more speculative development is needed if this demand/supply imbalance is going to be addressed. Hollins Murray Group has seen this opportunity in the market and has recently extensively refurbished a 36,694 sq ft former food facility at Bredbury industrial estate in Stockport. By sensibly adapting an existing property which did benefit from a more contemporary design, they have created a modern facility at a fraction of the cost of a new build. Adapting/redeveloping some of the region’s existing stock is also something that other developers should consider as demand evidently exists from end users.

The development pipeline in the North West is also continuing apace with the likes of Tritax Symmetry recently having their application for a 134-acre business park known as Symmetry Park in Wigan recommended for approval to Wigan Council. This application will include a proposal for a new 300,000 sq ft facility.