Logistics Property Regional Focus SOUTH-EAST South-east heading north
Warehouse rents in the prime region of south-east England could be about to rise, reports David Thame.
According to surveyor CBRE, the south-east’s logistics property market is fi nely balanced – and
could be about to tip into under-supply. In 2013, CBRE counted take-up around 3.6m sq ft and supply of just 3.4m sq ft, suggesting the region will have run out of good, decent fl oorspace before Christmas. Could the lack of supply mean sharp rent rises? It’s probably too soon to say. The Kent County Council deal at Hythe saw the council agree a long 25-year lease at a base rent of £5.65 a sq ft – a healthy but not excessive rent softened by a £2m fi t-out contribution from its landlord. The evidence – so far – suggests that rents are not rising but that incentives, like Kent’s £2m helping hand, are reducing. Whatever happens to rents, the south- east market is changing shape fast. Sometime this spring – it could be May, it could be April – the government will announce the route of a new Lower Thames crossing. The bridge – running parallel to the existing QEII Bridge at Dartford – could mean big savings in cost and time for the logistics sector. Thurrock’s many appeals as a warehousing location could be further enhanced. Ministers have already ruled out connecting the A2 with the A1089. The choice now falls between building next to the existing Dartford-Thurrock crossing or the option preferred by Kent County Council, which is to connect the M2 motorway with the A13 and M25 between junctions 29 and 30. A less momentous – but also signifi cant – decision is pending in Dartford. Supermarket
16 March 2014
chain Morrisons launched its new online grocery business in January, and now Morrisons’ partner, Ocado, is searching for a 350,000 sq ft depot in the town. A fi nal decision seems some way off – some sources say Ocado has a shortlist and is making progress, others say the requirement could be shelved whilst it presses on with a depot in the north-west of England. The shortlist is said to include Goodman’s Kingsnorth Commercial Park – where it plans a 1.225m single
warehouse on a 62-acre site – the Capacity site at Dartford, and a site owned by the Homes & Communities Agency at North Fleet Embankment. The Dartford market is becoming competitive, with or without Ocado.
Crosswater Holdings, part of the Bathroom Brands business, has signed up for a 131,400 sq ft build-to-suit unit at Prologis’ 264-acre The Bridge, Dartford.
The move followed an earlier signing at the site when Prologis secured a 122,474 deal with manufacturing group SEM. CBRE and Jones Lang LaSalle act for Prologis at the Bridge. Its rival, Goodman UK, has not been idle, stepping up the pace of activity at Kingsnorth where a new road connects the part to the A228 dual carriage way, which itself links to junction 1 of the M2 motorway. Charles Crossland, managing director, Goodman UK Logistics, said: “Kingsnorth provides a unique opportunity for our customers to create units that are effi cient and fl exible in use, design and scale. Medway is the largest urban area in the south-east outside London and has a robust
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level of economic activity and a highly skilled labour pool upon which to draw.” Goodman also scored at Aylesford
commercial park, New Hythe, signing up Kent County Council for a 112,000 sq ft unit which Goodman subsequently sold to Middle Eastern investors for £12.8m. The effects of the £1.5bn DP World
London Gateway deep-sea port on the north bank of the Thames aren’t yet clear – but are sure to be signifi cant. The new terminal welcomed its fi rst scheduled vessel last November and the pace of property deal- making is expected to quicken this summer. So far, developers have been cautious, and their appetite for speculative development in the south-east is surprisingly muted.
Prologis is speculatively developing 310,000 sq ft at its park on the M1 at Dunstable, the largest logistics warehouse currently being speculatively built in the UK. Elsewhere Roxhill has begun work on two LaSalle Investment Management funded schemes at Aylesford (190,000 sq ft across three buildings) and Basildon (178,000 sq ft across two buildings).
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