The West Country
Dorset Industrial Market: Green Shoots for Speculative Development in 2024? increase rents.
The industrial property market in Dorset has demonstrated significant resilience in the face of the global economic and political uncertainty of the last 12 months, seeing a good level of industrial supply delivered.
Some 300,000 sq ft of newly developed industrial space was marketed in the Bournemouth, Christchurch and Poole (BCP) conurbation in 2023 – contrasting with just c.30,000 sq ft in 2022.
As a result, there was a 38% increase in the 5-year average take up statistics in 2023. This, together with a proposed industrial development pipeline which is up by 240% on the 5-year average, is tangible proof that industrial demand continues unabated.
Bryony Thompson, Associate at Bournemouth-based property consultancy, Vail Williams LLP, explains.
There remains considerable demand for industrial premises across the Dorset region, but with particular focus on the BCP areas.
Bedrock Park provided much-needed new industrial stock on the Ferndown Industrial Estate with 190,000 sq ft speculatively delivered over 26 units. Completed in March, by the end of 2023, it was 50% let or under offer.
We expect this level of demand to persist throughout 2024, as occupiers continue to seek high-quality, sustainable, energy efficient industrial premises across Dorset.
Supply challenges to persist
Despite the positivity of delivering some excellent units, some uncertainty remains whilst the market rebalances. The effect of interest rate hikes, increased build costs and high inflation, together with the prospect of a General Election, stalled speculative development. This will cause a lack of new build supply in 2024 which consequently will
KBW Brew a Notable Investment Sale in Cheltenham
Acting on behalf of Cult Clothing Company, KBW competed the investment sale of 2 Cambray Place, Cheltenham in November 2023. The purchaser was Hurtwood Capital, a private family office investing across the UK.
The ground floor and basement of this four storey Grade II listed Regency building is let to SOHO Coffee Shops on a lease expiring in January 2030 with the upper parts comprising 3 flats sold off on long leases. The building occupies a great location on the pedestrianised Cambray Place which is opposite the John Lewis department store and among plenty of multiple retailers and brands.
2 Cambray Place is the original SOHO Coffee store which opened in 1999. The business was owned for much of its life by two families, but was acquired by Business Trading Company UK (BTC UK) in 2015, a leading Qatari holding and investment company which specialises in the hospitality and real estate sectors and owns other well-known brands such as Euphorium and The NOMAD London Hotel.
BPE Solicitors acted for the vendor Cult Clothing Cheltenham Limited and Frettens Solicitors acted for Hurtwood Capital Limited.
KBW, renowned for its expertise in real estate transactions across the commercial markets, used its extensive industry knowledge and tenacious approach to secure a buyer and ensure as quick and smooth a transaction as possible.
Senior Director, Richard Knightley, commented: “As Cheltenham continues to thrive, strategic acquisitions such as this highlight the confidence in the Cheltenham property market and continued demand for quality retail investments.”
For more information about KBW’s Commercial Agency services, please contact Richard Knightley or Laura Hatten on 01242 244744.
54 Bryony Thompson
Associate, Vail Williams LLP. Tel: 01202 558 262 Mob: 07741 145629
Email:
BThompson@vailwilliams.com
Henry Boot Agrees Sale of 759 Plots in Swindon to Vistry
Henry Boot PLC announces that its land promotion and planning business, Hallam Land Management (‘HLM’), has unconditionally exchanged contracts for the sale of 759 residential plots in Swindon to Vistry Group PLC (‘Vistry’), the national housebuilder.
Located in South Marston, Swindon, HLM secured an option to purchase the site over 20 years ago, and since then it has been promoting the land through the planning process, as part of a wider strategic land parcel working alongside Taylor Wimpey and Hannick Homes. In August 2021 outline planning consent was secured for a total of 2,380 residential plots across a 400-acre site, of which 1,063 relate to HLM’s site. In December 2023, a contract was exchanged to acquire the land, which has recently completed, simultaneously exchanging to sell 759 plots to Vistry which will complete in two phases with the first in 2024 and the second in 2026.
In addition to enabling the delivery of new homes including over 500 affordable homes, the wider site will bring a number of additional community benefits to the local area as part of the planning consent. These include up to 26,900 sq ft of retail, food, service and business space, a new primary school and an extension to an existing school, as well as community and sport buildings, significant woodland planting, green infrastructure and children’s play spaces. The transaction is expected to result in an ungeared internal rate of return for Henry Boot of 10% p.a. HLM will retain 304 plots for future sale.
Tim Roberts, CEO of Henry Boot PLC, commented: “While the housing industry has experienced slower sales rates over the past year, against what has been a challenging market backdrop, this sale further demonstrates the demand we continue to see for large, consented land parcels from major housebuilders who have a strategic long term requirement to deliver homes. At the same time there is an appetite for smaller premium sites in strong market locations. This disposal also underlines our team’s experience of taking large, complex sites through the planning system and ultimately selling them to housebuilders to both enable the delivery of much needed homes and community facilities across the U.K. and create shareholder value.”
COMMERCIAL PROPERTY MONTHLY 2024
However, there are opportunities for occupiers, with Magna Park being developed in 2024, and eight units at Parvaneh Park, all of which sold off plan being delivered.
Rents continue to rise Headline rents achieved £10.50 psf in 2023 for pre-lets between 16,000- 40,000 sq ft, driven by a mixture of lack of supply and delivery of high- quality, energy efficient buildings.
Quoting rents for pre-lets and proposed developments for 2024 are also increasing and we expect to see headline rent achieve between £11.00 psf by Q2 and £11.50 by Q4 2024.
Local Plan must deliver employment land
As interest rates and build costs stabilise throughout 2024, we are hopeful that there will be more appetite from developers to recommence speculative development in 2024, ready for occupation in 2025.
However, we still need more sites to be allocated for employment land in the BCP Local Plan, which is due to be adopted in April 2025, subject to any drastic political changes later this year. Provided this happens, we remain hopeful of continued momentum into 2024.
For more information on the latest developments in the Dorset industrial market – whether you are a landlord, investor, developer or occupier, get in touch.
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