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The rise of e-commence and demand for space has led the industrial sector to emerge as one of the strongest performing asset classes during 2016 says commercial property agent Prop-Search, brushing off any threat from Brexit as consumers continue to add to their online baskets.
With the on-line retail market growing rapidly, demand for new warehouse and distribution space is growing swiftly. This demand is being seen from e-retailers who require far more complex distribution systems to deliver their e-fulfilment centres, where the whole supply chain is embraced - from obtaining the products from suppliers, through storage, sorting, packing and transfer to carriers, as well as managing the returns - as well as third party logistics operators.
In Wellingborough, Prologis has commenced infrastructure works at Prologis Park Wellingborough West, marketed as a prime site for logistics and traditional industrial/warehouse occupiers. The 110 acre development is being built next to Park Farm Industrial Estate and offers Grade A space, with occupancy costs in Wellingborough quoted as being up to 20% lower than Northampton.
The infrastructure programme, now well underway, includes diverting utilities, building a new spine road and access roundabout to create a development plateaux for the scheme, which has planning permission for a total of 2.15 million sq ft of buildings. These range in size from 80,000 sq ft up to 700,000 sq ft and are suitable for B1, B2 and B8 uses. Terms have now been agreed with an occupier for the first building - of circa 380,000 sq ft - on ‘Zone A’ of the scheme.
Simon Toseland, a Director at Prop-Search, says: “It is estimated that once completed, the entire development could lead to up to 2,500 new jobs, which is encouraging for the town as various housing schemes around the town gather momentum. The Local Authority is committed to maintaining a rolling supply of deliverable sites to provide five years’ worth of housing, with Wellingborough looking to deliver 7,000 new homes by 2031.”
Approximately 3,000 of these new homes are set to be delivered as part of the Glenvale Park urban extension to the north of the town. The approved masterplan also provides for a mix-use neighbourhood centre, two smaller local centres, schools and a business campus - with infrastructure works shortly to commence on-site.
The first phase of housing, comprising 35 acres, is now under offer and following the completion of the impending infrastructure works, some 800 new homes are scheduled for delivery during 2018. These will be complemented by a new Local Centre which will include a family public house – with terms having been recently agreed with a National brewery and a convenience food supermarket - where again, terms have been agreed - and a mix of other neighbourhood centre retailers. A number of retail units, surrounding the food store, are available from Prop-Search.
On the other side of the town, Wellingborough’s newest retail park which opened last year on London Road with Lidl, McDonalds, Starbucks, Subway and HSL Chairs all initially committing to space has now secured its final occupier. A national fast food retailer has committed to taking the final unit of 2,172 sq ft and will shortly commence the internal fit-out.
Another national occupier has also shown its commitment to the town. Acting on behalf of Lok’nStore, the UK’s fastest growing self-storage company, Prop-Search has acquired the former showroom premises at Victoria Park - fronting onto Turnells Mill Lane. A new 16,500 sq ft facility will be constructed on the site following the demolition of the current building and site clearance. The new self-storage facility is scheduled for a winter 2017 opening and forms part of the company’s wider development scheme to build landmark stores. Accommodation will be spread over four floors with a glazed curtain walling system to the reception area, creating a fresh and modern customer experience.
So Wellingborough has seen continued growth despite a limited supply of buildings and some caution within the occupier market. But as we enter 2017, it is clear that the town is now facing more competition than ever from its neighbours.
East Northants has seen greater activity in terms of new development, with the construction of Rushden Lakes nearing completion and scheduled for opening in late Spring/Summer. This is complimented by the further development of Warth Park at Raunds, where Howdens has taken up the remaining land bank, now occupying around 1 million sq ft of distribution warehousing. Kettering is also delivering a number of new employment sites, the most recent now under construction being Roxhill Development’s ‘Kettering Gateway’ which once completed will accommodate circa 1.2 million sq ft of space.
Nevertheless, the strengthening warehouse and industrial markets are being put at risk by the constraint on supply, particularly in the 10,000 sq ft to 50,000 sq ft sector. Prop-Search is anticipating the availability of around 250,000 sq ft of existing stock to the Wellingborough market, however with nearly half of this made up of one building alone, it will go little way to support smaller requirements - and following the trend seen over the past 18 months, those properties that do become available will be taken up very quickly.
Surprisingly, similar is true for the market for smaller offices which are now also in short supply. The market for good quality office space is sporadic at best and as the cost of developing new office accommodation remains unviable - due to the imbalance between the cost of construction and rental return - anyone holding a good Grade A or refurbished open plan Grade B property is in a strong position.
Simon Toseland concludes “We continue to look proactively for development sites or existing commercial properties, including those that require refurbishment, to fulfil demand. Many of these will let or sell before they even come to the market, so it’s always worth keeping in touch with us if you are looking to relocate.”
Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website: www.prop-search.com