Regional Focus Logistics Property EAST MIDLANDS GOLDEN TRIANGLE Let it be
A looming shortage of big newly-built warehouses, and plans for three massive rail-freight distribution hubs, makes the East Midlands Golden Triangle seem as glittering as ever, reports David Thame.
The reality is a little more complicated, and perhaps a little more tarnished. Retailers and logistics oc-
cupiers did not feel in the mood for prop- erty deals in the first quarter of 2012, and the take-up of warehouse space in the region was depressed as a result. According to DTZ, take-up plunged by 625,000 sq ft between Christmas and March, leaving deals in the first quarter 40% below average. At the same time, the supply of warehouse floorspace crept up, ending at a shade over 17m sq ft thanks to the return to the market of a large slice of older property. Tesco’s 190,000 sq ft Brackmills depot, Nottingham, was one of the largest single additions to supply. The largest letting so far was small by East Midlands standards, with 140,000 sq ft let to Dalepack at Swan Valley. This feels like a comedown compared to the 1m sq ft letting to Marks & Spencer agreed late last year at Clowes Developments’ 2.5m sq ft East Mid- lands Distribution Centre on a site 16 miles east at Castle Donington, next to the M1. On the other hand, the list of East Midlands warehouse requirements is as long as you
52 June 2012 Storage Handling Distribution
would expect in the region that dominates the UK logistics sector. Live requirements add up to more than 1m sq ft, and there are more tentative requirements waiting to land. Pre-let or design-and-build deals are the most likely outcome in several cases, thanks to lack of ready-built properties. The consensus is that the second quarter of 2012 will look rosy compared to the first. Helen Longstaffe, business space direc- tor at DTZ in Nottingham, says: “We have seen good levels of activity in the region, particularly in the smaller size range of sub 20,000 sq ft, with a num- ber of units currently under offer. “The supply of new grade A stock in the East Midlands continues to dwindle and the lettings/sales which are due to complete during Q2 2012 will further continue this trend. Despite the take-up of good quality stock the lack of available funding makes it highly unlikely that there will be any sig- nificant speculative development of larger units in the region in 2012, if not 2013.”
RAIL DEVELOPMENTS
Even so, some big plans are in the pipeline. As SHD Magazine went to press, a formal announcement was still awaited about the selection of development partners for Severn Trent’s 7m sq Etwal rail freight scheme, Der- byshire. One of the worst kept secrets in the logistics world, commentators confidently ex- pect Helioseurope and York-based Shepherd Development to take on the mighty scheme. Progress through the planning process is expected to begin late this year. The months that follow are likely to see slow progress and sustained public opposition. This hands a distinct competitive advantage to the region’s two rival rail freight distribution plans.
ProLogis is in pole-position with a well- prepared plan for a 7.6m sq ft third phase at Daventry’s International Rail Freight Terminal (DIRFT). A planning application for the development on the site of the former Rugby radio station, will go to govern- ment planning inspectors this summer. Developers Roxhill are behind plans for the 6m sq ft East Midlands Gateway Rail Freight Interchange, sited north of the East Midlands Airport close to Junc- tion 24 of the M1 mo- torway.
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