Logistics keeps on trucking

LSH

1st June 2015

Focus On Northampton

LAST year saw the return of speculative development to the distribution and logistics property market with the construction of two units in Northampton. Brackmills 112 built by Roxhill was pre-sold to an investment fund who have subsequently let the property to Howdens Joinery, and Prologis committed to a 341,000 sq ft speculative build at Grange Park. DC7, which reached completion in march this year, has been let almost to Clipper Logistics in order for them to service a contract for fashion retailer Zara. The significance, particularly in the case of the Clipper letting, cannot be over estimated. The logistics sector more than any other has struggled with the sharp reduction in grade A availability in the last two years, and these two buildings in Northampton have helped mop up some of that demand. The concern is that this is only a fraction of the supply required and so a number of other developers are also either already building speculative space or are planning to do so, but not all of them can fit in Northampton. So which nearby towns are going to benefit from such large injections of investment? Well, quickly on the wave of success at Grange Park, industrial developer Goodman has now commenced work on site for its own speculative logistics development located immediately off Junction 15 of the M1. Northampton Commercial Park will comprise two units of 162,000 sq ft and 304,000 sq ft respectively and will be available for occupation from January 2016. James Hill of joint letting agent Lambert Smith Hampton said: "Northampton Commercial Park is a prime site for logistics occupiers. You couldn't be any closer to the M1 and the specification of each building is exceptional with eaves heights of 12m and 15m respectively and minimum yard depths of 50m." I n nearby Daventry, IDI Gazeley are on site constructing a 297,320 sq ft warehouse due for completion in August as well as a 185,000 sq ft unit at their MK Magna Park development in Milton Keynes and also due for completion in August. Rumours of further speculative development being planned are circulating around some other key strategic schemes in the region. The statistics indicate why there is now an acceptance that the risks associated with speculative development have reduced sharply. Of the half dozen buildings speculatively built within this region in the last 12 to 18 months, all have been disposed of either prior to completion or upon completion of building work. Lambert Smith Hampton's Industrial and Logistics Market Report 2015 provides further evidence that Grade A stock has been under pressure. Despite record demand for this type of space, take up fell against 2013's figures because supply fell sharply in that year. As a consequence rental growth gained momentum and the equilibrium has returned to the market, allowing more space to be delivered. For more information please contact James Hill, Director, Lambert Smith Hampton 01604 664366 or email jhill@lsh.co.uk

LSH