2012 uk industrial and distribution market overview
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Transcript of 2012 uk industrial and distribution market overview
2 0 1 2 m a r k e t o v e r v i e w
Industrial &Distribution
introduction 1
south east england 2
south west england 3
greater london 4
east england 5
prime gets primer and developers build speculatively 6
wales 7
east midlands 8
land banks and mixed use development 9
west midlands 10
north west england 11
east london – one to watch 12
yorkshire/humberside 13
north east england 14
poor grade will struggle 15
hotspot’s north 15
scotland 16
appendix 17
uk distribution motorway map 18
market structure 19
big box dilemma & the 3pl challenge 20
continuing to green 21
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
12 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
This is the 5th edition of the Industrial and Distribution Market Overview for the UK and coincides with the 5th anniversary of the onset of the financial crisis in the UK. After five years of uncertainty we’re surely not the only ones hoping that 2012 will be the turning point for the macro economic situation in the UK. There have been hotspots and winners despite the testing business climate but the healthy evolution of the UK industrial property market in the UK needs confidence and stability to return.
Some take the view that we are over the worst of the Eurozone crisis. Whether that is the case remains to be seen but certainly as we write the fear of a complete meltdown has abated and there is more confident talk in political and commercial quarters.
As it is, 2011 will go down as a mixed year where, in many cases it was a bit of a plod from the previous. There is plenty of contrasting data around take up and supply across the UK.
On the positive side, there was a good level of activity from retailers. While trading is challenging on the high street there are certain new and established brands which have prospered. At the same time whether trading is good or not, many of the rest are looking at the components of the supply chain. All this change feeds into industrial market activity.
Manufacturing is also making a resurgence. The big brand names in the East Midlands and other regions tend to grab the headlines but behind them are many SME’s either prospering independently or benefiting in the slipstream.
Let’s not get ahead of ourselves but there are certainly some green shoots emerging from an industrial market perspective.
Overleaf is an updated, region by region indication of property values, land and capital land rentals as well as an overview of the economic variations, GVA per head, labour rates and summary of recent news items. There is also an added feature of commentary on the outlook of each market.
Included are land capital rental values by town for each of the areas as well as an outlook for each market.
In the last section we have included a map of the UK distribution motorway network as well as an overview of the latest market structure and breakdown.
Andrew Smith Director, Industrial Agency
May 2012
introduction
2
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment in the South‑East is 6.3%, an increase of 3.2% since 2011, however it is still one of the lowest in the country. GVA per head is £21,924. The region contributes 14.7% of the total UK GVA (£1.301bn), the second largest contribution after the Greater London area.
Property values
Town ERV CV LV
Bedford £6.00 £65.00 £400,000
Brighton £7.50 £100.00 £550,000
Didcot £6.75 £105.00 £500,000
Oxford £8.00 £110.00 £550,000
Portsmouth £7.50 £85.00 £375,000
Reading £8.50 £110.00 £550,000
Southampton £7.50 £90.00 £500,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
south east england
Recent real estate news — A Capita Symonds client acquired the 300,000 sq ft (10 acre) former Arjo Wiggins site in Dartford for mixed use redevelopment for an undisclosed sum.
— Furniture Village Plc has taken 104,500 sq ft (9,708 sq m) of industrial space within Unit DC3 in Milton Keynes from Prologis Group Holdings Ltd on a new lease at £600,875 pa, equating to £5.75 psf (£61.89 psm).
— Palmer & Harvey Ltd has taken 167,730 sq ft (15,583 sq m) of warehouse space in 1 G Park, Hemel Hempstead on a 25‑year lease at £997,994 pa, equating to £5.95 psf (£64.04 psm).
— Motorline bought a 10,000 sq ft industrial unit in Tunbridge Wells. Capita Symonds acted for Royal Mail in the surrender of the lease.
— Nampak Cartons and Healthcare Limited have acquired 50,127 sq ft industrial facility in Fareham. The lease is for 15 years long with an option to break in the 7th year (2018). The rent is 298,255 pa, equating to £5.95psf.
— Capita Symonds acted on behalf of AXA in the letting of a 1 acre site at Chequers Lane, Dagenham to Morgan Sindall on flexible lease at £50,000 per annum.
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £19.27 £10.25Rate p/a £38,002 £25,012
IT/Financial/Professional Services VodafoneWholesale and Retail Sainsbury’sManufacturing Vauxhall
— Heathrow — Stansted — Gatwick — Dover
— Folkestone — Felixstowe — Southampton
— M25, M4, M40, M20, M1, A1(M), M3
— Heathrow — Park Royal — Dartford
Overview
Labour rates
Main industrial locations
Major motorways
Nearest freight terminal
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 3
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment is 6.1%, this is the lowest rate in the country. GVA per head is £18,669, an increase of 2.6% since 2009. It contributes 7.7% of the total UK’s GVA.
Property values
Town ERV CV LV
Bristol £7.50 £90.00 £275,000
Cheltenham £6.50 £75.00 £300,000
Gloucester £6.50 £80.00 £350,000
Swindon £5.75 £85.00 £300,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds, on behalf of Trelleborg, disposed of the 12 acre (100,000 sq ft) former Trelleborg site in Trowbridge for £2.1 million to DTR VMS with completion due in May 2012.
— City Link has taken 66,753 sq ft (6,202 sq m) of industrial space at Jupiter Road Distribution Centre, Bristol, from Prudential Plc. on a 10‑year lease at £300,000 pa, equating to £4.49 psf (£48.37 psm)
— WH Malcolm Ltd has taken 250,000 sq ft (23,226 sq m) of warehouse space at Western Approach Distribution Park, Bristol, from London & Stamford Property Plc on a seven year lease at £1,000,000 pa, equating to £4.00 psf (£43.05 psm), subject to an option to break in year three.
— St Austell Brewery Co Ltd has purchased the freehold interest in its own 50,000 sq ft (4,645.15 sq m) distribution warehouse in St.Columb from former landlord Klina Ltd (in receivership) for £2,000,000.
— Boomeco Ltd have taken 77,982 sq ft (7,244.76 sq m) of industrial space in Estuary Park, Avonmouth, from Lasalle Investment Management on a five year lease at £233,946 pa, equating to £3.00 psf (£32.29 psm), subject to an option to break in year three.
— DMG Ltd. have taken 107,000 sq ft (9,941 sq m) of industrial space within Building 2, Westland Distribution Park, Weston Super Mare. from St Modwen on a five‑year lease at £107,000 pa, equating to £1.00 psf (£10.76 psm).
— West Design Products Ltd has bought a freehold interest in Plymouth. It consists of 78,806 sq ft (7,321 sq m) of industrial space for £1,300,000.
south west england
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £16.15 £9.72Rate p/a £31,882 £22,531
Health and Education NHSBusiness and Financial Services NationwideRetail Co‑op
— Bristol — Plymouth
— M4, M5
— Swindon — Bristol — Plymouth
Overview
Labour rates
Main industrial locations
Major motorways
Nearest freight terminal
4
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment in Greater London stands at 10%, one of the highest in the country. It has increased from last years figure of 9%. GVA, however, is £35,026, which is an increase of 0.71% on the previous year of £34,779. This accounts for 21.5% of the UK’s GVA, the biggest single contribution of the UK regions.
Property values
Town ERV CV LV
Basildon £6.50 £75.00 £325,000
Bracknell £8.00 £105.00 £550,000
Chelmsford £7.25 £95.00 £500,000
Croydon £8.50 £110.00 £750,000
Dagenham & Barking £8.00 £110.00 £750,000
Dartford £8.25 £100.00 £550,000
Enfield £9.00 £115.00 £850,000
Guildford £9.25 £110.00 £750,000
Harlow £7.00 £75.00 £350,000
Heathrow 12.50 £150.00 £1,700,000
Hemel Hempstead £8.00 £110.00 £650,000
Luton £7.00 £100.00 £500,000
Park Royal £13.25 £150.00 £1,800,000
Slough £11.75 £115.00 £1,100,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds acted on behalf of the LDA in letting Sugarhouse, a warehouse in Stratford consisting of 21,483 sq ft to Serco at £6.25 psf.
— Fedex UK has taken 41,110 sq ft (3,819 sq m) of industrial space at 1‑11 Galloway Road, London, from OCS Ltd on a fifteen‑year lease at £369,990 pa, equating to £9.00 psf (£96.76 psm).
— Capita Symonds have let 3 of 4 vacant units on Trident Industrial Estate, Poyle at a headline rents of £10.50 psf.
— Waitrose Ltd has taken 198,221 sq ft (18,415 sq m)of industrial space in Ealing on a five‑year lease at £850,000 pa, equating to £7.75 psf (£83.41 psm).
— Speedy Hire Asset Services Ltd has taken 20,430 sq ft (1,898 sq m) of ground‑floor industrial space in 43‑49 Minerva Road, Ealing, from Eskmuir Properties Ltd on a 10‑year lease at £199,193 pa, equating to £9.75 psf (£104.95 psm), subject to a rent review and an option to break in year five.
— Capita Symonds acquired 18,315 sq ft on the North Feltham Trading Estate, Heathrow on behalf of Marken Ltd at a rental of £10.00 psf with 20 months rent free on a 10 year lease (break at the 7th).
— Capita Symonds has recently won an instruction from Royal Mail to dispose of their 183,000 sq ft warehouse in Bromley by Bow.
greater london
Managers/Senior Officials HGV DriversRate p/hr £24.48 £11.35Rate p/a £48,498 £26,358
Business and Financal Services HSBC Group, BarclaysGovernment Central Government Health and Education GSK
Main industrial locations
— Luton — Harlow — Chelmsford
A1(M)M11
M1
M25 M25
M25
M26
M20
M40
M4
M3 M25
M23
Heathrow
Slough
Enfield
Park Royal
Croydon
Dartford
Guildford
Bracknell
Hemel Hempstead
Harlow
Chelmsford
Basildon
Dagenham & Barking
Luton
Labour ratesLargest employee sectors Examples
Overview
M25
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 5
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentThe East of England’s unemployment rate is currently 7%, the third lowest in the UK. GVA has increased by 2.42% to £18,996 per head since the previous year. The East contributes 8.7% of the UK’s GVA.
Property values
Town ERV CV LV
Colchester £6.50 £90.00 £325,000
Felixstowe £5.00 £60.00 £150,000
Ipswich £5.00 £65.00 £160,000
Norwich £5.00 £70.00 £175,000
Peterborough £5.25 £55.00 £200,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Ups Ltd has taken 25,275 sq ft (2,348.12 sq m) of industrial/warehouse space at 48 Hurricane Way, Norwich, on a five year lease at £83,500 pa, equating to £3.30 psf (£35.36 psm).
— Marexport Ltd has taken 24,497 sq ft (2,276 sq m) of industrial space in unit 2 cliff Road, Ipswich at £96,763 pa, equating to £3.95 psf (£42.52 psm).
— Airvert Ltd has purchased the freehold interest in 46,864 sq ft 4,354sq m) of warehouse space at Chiswick Avenue, Mildenhall for £1,200,000.
— Hotel Chocolat Ltd has taken 110,000 sq ft (10,219 sq m) of ground‑floor industrial space at Alpha Park, near Bedford on confidential terms. King Sturge acted on behalf of the landlord.
— The Denholm Group has taken 160,000 sq ft (14,864.49 sq m) of industrial space in Unit E from Verbrugge International BV on a sublease expiring in September 2013 on confidential terms.
— Freshpeel Produce Limited has purchased the freehold interest in 30,775 sq ft (2,857 sq m) of Factory space in Wisbech from Greenvale Foods Limited for £875,000.
east england
Main industrial locations
Labour ratesLargest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £17.91 £10.28 Rate p/a £35,682 £25,881
Manufacturing Procter & GambleWholesale and Retail Premier FoodsManufacturing/Engineering Senior PLC
— Felixstowe — Harwich Port
— M11
— Norwich — Ipswich — Cambridge
Overview
Major motorways
Nearest freight terminal
6
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
2 0 1 2 m a r k e t o v e r v i e w2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
South Dagenham DocksC H E Q U E R S L A N E • D A G E N H A M • R M 9 6 S A
S E C U R E H A R D S TA N D I N G T O L E T
A1306
A13
M25
Ford Motor Company Dagenham Dock
Goresbrook Interchange
ASDA
Merrielands Retail Park
Chequers Lane
White Outline
Kuehne + Nagel
axa – dagenham
Capita Symonds are joint agents acting on behalf of AXA on their 21 acre warehouse development site (400,000 sq ft) in Dagenham.
central park – park royal, london
Capita Symonds are joint agents acting on behalf of SWIP/Goya on a new multi‑unit industrial development (161,372 sq ft) next to Middlesex Hospital Capita Symonds advised on this acquisition in 2011.
There is estimated to be over about 1 million sq ft of spec development under construction in over 20 schemes around the country. About half of that is within the Greater London and South East area.
Historically we would have expected the Heathrow sub‑market to be headlining the speculative development story. This time round though its more about Park Royal which on current evidence looks likely to surpass Heathrow (excluding airside) as the most expensive industrial location in the UK. Park Royal is a diverse industrial location with a broad tenant base covering manufacturers, warehousing and specialist logistics. Where Heathrow has a supply overhang however, Park Royal is short on quality stock. Capita Symonds is advising SWIP/Goya’s on its speculative development at Central Park in Park Royal (www.london‑centralpark.com) and early occupier interest in the scheme demonstrates that their confidence is well founded.
Speculative development is less prevalent in East London although interest is gathering and a c 100,000 sq ft scheme start is predicted over the next 12/18 months by Goya Developments in Canning Town.
In terms of development land, we saw more unconditional purchases last year, SWIP (Taplow and Park Royal), La Salle/ Exton Estates at Crawley. Big Box warehouse developers like Roxhill who are well funded could make quite a mark this year with acquisitions. Developers who were active pre recession like Chancerygate are also back busy again with pre‑commitments and speculative development.
We’re confident rents in Park Royal will tip over £13 per sq ft in 2012 with land and capital values increasing further as well. We are only 10/15% off 2006/07 peaks in this location on land values – that gap is already closing.
prime gets primer and developers build speculatively Andrew Smith – Director, Industrial Agency
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 7
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
EmploymentThe unemployment rate in Wales stands at 9% and the GVA is £15,145, an increase of 3.18% from the previous year’s £14,664, but still the lowest in the UK. This is 3.6% of the UK’s total GVA.
Property values
Town ERV CV LV
Cardiff £5.50 £55.00 £125,000
Swansea £4.50 £50.00 £100,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Speedy Asset Services Ltd has taken 26,083 sq ft (2,423.19 sq m) of industrial space at Unit 47 Portmanmoor Road Industrial Estate, Cardiff, on a ten year lease at £91,291 pa, equating to £3.50 psf (£37.67 psm).
— DHL has taken 42,961 sq ft (3,991.21 sq m) of industrial space at unit 3 Tregwilym Industrial Estate, Rogerstone, on a five year lease at £150,000 pa, equating to £3.49 psf (£37.58 psm).
— Protomould Limited has taken unit A1, comprising 25,124 sq ft (2334 sq m) of industrial space at Llantrisant Business Park from Barrington Investments Limited on a 6‑year lease at £88,000 pa, equating to £3.50 psf (£38 psm), subject to a review and an option to break in year three.
— Davenport Leasing has purchased the freehold interest in 54,600 sq ft (5,073 sq m) of industrial space for £875,000 in Ebbw Vale.
— Blywert Beaufort has taken 132,750 sq ft (12,332 sq m) of Unit IP1 and IP 2 industrial space in Imperial Park, Newport on a five year lease at £531,000 pa, equating to £4.00 psf (£43.06 psm).
wales
Main industrial locations
Labour ratesLargest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £15.09 £8.68 Rate p/a £29,598 £19,950
Manufacturing British AerospaceHeavy Industry Metal RefiningElectronics Sony
— M4
— Cardiff — Swansea — Newport
Overview
Nearest freight terminal
Major motorways
— Newport — Cardiff — Barry
— Swansea — Port Talbot
8
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentThe East Midlands has one of the lowest unemployment rates in the UK at 8.2% and a GVA of £18,090 per head. This has increased by 3.16% (£17,519) since the previous year, and makes up 6.4% of the total UK GVA.
Property values
Town ERV CV LV
Derby £5.00 £50.00 £140,000
Leicester £5.50 £60.00 £200,000
Nottingham £5.50 £55.00 £150,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds acted on behalf of Structadene in the sale of 125,000 sq ft (5 acres) of industrial land on Fosse Way for £2,475,000.
— POS Direct Ltd has taken 70,110 sq ft (6,513.43 sq m) of industrial space at Unit 3 Radar Road, Leicester on a new lease at £333,023 pa, equating to £4.75 psf (£51.13 psm).
— Carlsberg UK Ltd has taken 132,622 sq ft (12,320.99 sq m) of industrial space at the former Accuride International site in Northampton on a six month lease at £596,799 pa, equating to £4.50 psf (£48.44 psm).
— Meomi Ltd has taken 46,150 sq ft (4,287 sq m) of ground‑floor industrial space in Dabell Avenue, Nottingham, from Property Alliance Group Ltd on a ten‑year lease at £180,000 pa, equating to £3.90 psf (£41.98 psm), subject to a rent review and a tenants option to break in year five.
— Assured Logistics has taken 212,500 sq ft (19,742 sq m) of industrial space within unit 2, phase 3 Max Park, Corby, on a five‑year lease at £956,250 pa, equating to £4.50 psf (£48.44 psm).
east midlands
Main industrial locations
Labour ratesLargest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £17.08 £9.94Rate p/a £33,964 £25,035
Finance Services SantanderManufacturing ToyotaRetail ASDA
— Nottingham — Daventry
— M1, A1(M), M11, M6
— Nottingham — Daventry — Castle Donnington — Leicester — Northampton
Overview
Major motorways
Nearest freight terminal
2 0 1 2 m a r k e t o v e r v i e w
9
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
standard life – erith
Capita Symonds has been instructed on a 97,000 sq ft warehouse facility in Erith on a 6.25 acre site to let or sell.
sappi – blackburn
Capita Symonds acted on behalf of Sappi in the disposal of their 118 acres of land, including 500,000 sq ft of buildings in Blackburn for c. £5,000,000 (net).
We saw some activity last year with more land banking and speculative purchasing of large former industrial sites. This was mainly by developers and venture capitalists. A representative deal would be Capita Symonds sale of the former Sappi Mill in Blackburn to Aeternum Capital. There are a number of other buyers who are looking for these types of sites across the country now who are prepared to pay better than ‘distress’pricing where there is genuine hope value for alternative uses. Underpinning this interest are the fundamentals of population increase and a shortage of housing. A ‘beyond London’ housing recovery will come through at some point and sentiment is definitely shifting towards the value opportunity in sites which have the ability to play a part.
land banks and mixed use developmentAndrew Smith – Director, Industrial Agency
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
10
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment in the West Midlands currently stands at 9.3% as of 2011. This is third highest and is way above the UK average of 8.4%. It is, however, the only region to improve its unemployment rate since last year (9.8%). GVA per head, as of 2010, stood at £17,060. This is a 2.68% increase since 2009, when it was 16,602. This amounts to 7.3% of the UK total.
Property values
Town ERV CV LV
Birmingham £5.75 £75.00 £250,000
Coventry £5.50 £80.00 £275,000
Daventry £5.25 £65.00 £260,000
Northampton £5.75 £75.00 £300,000
Rugby £5.50 £65.00 £225,000
Stafford £5.25 £60.00 £150,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Inkfish Services Ltd. has taken 56,459 sq ft (5,245.21 sq m) of industrial space at Unit 25 Prologis Park, Coventry on a seven year lease at £296,410 pa, equating to £5.25 psf (£56.51 psm).
— Pointbid UK Ltd has taken 58,609 sq ft (5,444.95 sq m) of industrial space within Unit 3 Meteor Park, Birmingham, from SEGRO Plc on a five‑year lease at £281,323 pa, equating to £4.80 psf (£51.67 psm).
— HSD Ltd has taken 41,750 sq ft (3878.70 sq m) of industrial space within unit 6 Kingsbury Business Park, Sutton Coldfield from Scottish Widows Investment Property Trust on a five‑year lease at £187,875 pa, equating to £4.50 psf (£48.44 psm), subject to a tenant only option to break in year two.
— An undisclosed tenant has taken 120,735 sq ft (11,217 sq m) of industrial space at Hams Hall Distribution Park, Coleshill, on a new lease at £573,491 pa, equating to £4.75 psf (£51.31 psm).
— BES Ltd has taken 77,317 sq ft (7,182.98 sq m) of industrial space at Unit 12 Junction 6 Industrial Park, Birmingham, from Prupim on a 10‑year lease at £394,317 pa, equating to £5.10 psf (£54.90 psm), subject to a rent review in year five.
west midlands
Main industrial locations
Major motorways
Nearest freight terminal
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £17.38 £9.90 Rate p/a £33,541 £25,269
Manufacturing TATAFinancial, Business & Prof Services HSBCRetail Tesco
— Birmingham
— M1, M5, M40, M6, M42
— Birmingham — Coventry — Stoke‑on‑Trent
Overview
Labour rates
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 11
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment in the North West has seen a relatively sharp rise of from last years figure of 7.7% to 9.3%. GVA is £17,381 per head, an increase of 2.86% since the previous year. The region contributes 9.5% towards the UK’s total of £1.301bn.
Property values
Town ERV CV LV
Liverpool £5.00 £65.00 £120,000
Manchester £6.00 £75.00 £225,000
Skelmersdale £5.25 £65.00 £140,000
Stoke‑on‑Trent £5.00 £55.00 £100,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds acted on behalf of Sappi in the disposal of their 118 acres of land, including 500,000 sq ft of buildings in Blackburn for c. £5,000,000 (net).
— Idem Safety Switches Ltd has purchased the freehold interest in 42,159 sq ft (3916.70 sq m) of industrial/warehouse space on Ormside Close, Wigan, for £620,000 from Rockwell Automation Ltd.
— Bibby Logistics Ltd has taken 53,174 sq ft (4,940 sq m) of ground‑floor industrial/warehouse space, within the Distribution Premises on Wynne Avenue, Swinton on a five‑year lease at £110,000 pa, equating to £2.07 psf (£22.27 psm), subject to an option to break at the end of year three.
— Cellular Systems Ltd has taken 41,100 sq ft (3,818.31 sq m) of industrial space within Unit 2 Easter Park, Widnes, from Easter Group Ltd on a new lease at £165,000 pa, equating to £4.01 psf (£43.21 psm).
— Vitesse Mailing Ltd has taken 43,559 sq ft (4,047 sq m) of industrial/warehouse space within Units 1, 2 and 3 Parker Street Industrial Estate, Preston, on a 4‑year lease at £65,000 pa, equating to £1.49 psf (£16.06 psm).
— Holchem Laboratories Ltd has purchased the freehold interest in 92,826 sq ft (8,624 sq m) of industrial space in Gateway House, Bury, from Imperial Tobacco Pension Trustees Ltd for £2,500,000.
north west england
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £17.15 £9.70 Rate p/a £32,883 £24,624
IT Services IBMRetail ASDAChemicals/Pharmaceuticals British Nuclear Fuels PLC
— Liverpool — Crewe (Basford Hall)
— M6, M60, M56
— Liverpool — Manchester — Preston
Overview Main industrial locations
Major motorways
Nearest freight terminal
Labour rates
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
12
Those for and against the Olympics are likely to continue trading blows for sometime yet. What’s not really up for debate though is the extent to which the fundamentals of the industrial market have changed. It’s a massive shift.
To begin with, over 250 acres of industrial land were lost to the Olympic development. Then there’s the infrastructure improvements and broader inward investment to the area. Westfield, Stratford may take the headlines for now but behind it there is a much broader re‑structure underway across the East London economy. Residents and businesses are moving in who wouldn’t have stopped to take a look at the area a decade ago.
All this change is good for the industrial market.
As far as existing stock goes there is a broader demand pool to tap into. Capita Symonds has just been instructed to market the former Royal Mail Group facility at Bromley by Bow and we’re confident of high demand from the combination of new entrants to the market post Olympics and the solid base of logistics businesses attracted by the fundamentals.
It is these characteristics which are behind the emergence of a number sites now primed for industrial and warehousing development across the size spectrum. Not a great deal of commitment to develop speculatively yet but sentiment is definitely shifting.
For the record, we’re big fans of the Olympics and have been working on behalf of one of the host councils, The London Borough of Newham to lease out some of their assets for the duration of the Games. Huge demand and an interesting insight into the requirements of the Olympic Committees (NOC’s), contractors and corporates.
east london – one to watchJames Shillabeer – Associate Director, Industrial Agency
ELMS ELIZABETH WAY • HARLOW • ESSEX CM19 5BD
Owner Occupier/Redevelopment Opportunity 13.93 acres (5.64 hectares)with 246,974 sq ft (22,943 sq m) of office /industrial buildings
www.elms-park.co.uk FOR
pitney bowes – harlow
Capita Symonds have been instructed on the disposal of Pitney Bowes 13.94 acre site in Harlow, comprising of 106,000 sq ft of office space and an additional 146,000 sq ft warehouse/factory facility. The site is currently under offer.
royal mail – bromley by bow
Capita Symonds have been instructed to dispose of Royal Mail’s Distribution Warehouse in Bromley By Bow. The warehouse is 183,740 sq ft situated on an 11 acre site.
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 13
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentUnemployment in Yorkshire & Humberside is one of the highest in the UK at 10.1%. The GVA per per head is £16,917, which is an increase of 2.39% since the previous figure of £16,512, contributing 7.0% of the UK’s total.
Property values
Town ERV CV LV
Bradford £5.50 £55.00 £175,000
Doncaster £4.75 £45.00 £100,000
Leeds £6.00 £65.00 £200,000
Sheffield £5.00 £55.00 £130,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds acted on behalf of Capita Group in the letting of 160,000 sq ft in Wetherby to Lindam in 2011 at a passing rent of £4.50 per sq ft on a 7 year lease (no breaks).
— Esterform Packaging Ltd has taken 99,652 sq ft (9,257 sq m) of industrial space on Royds Farm Road, Leeds in a sale and leaseback transaction on a 20 year lease at £431,820 pa, equating to £4.33 psf (£46.65 psm), subject to a rent review every five years.
— Kingspan Renewables has taken 65,036 sq ft (6,041.84 sq m) industrial/warehouse space within Unit 5 Dearne Mills from F&C REIT Asset Management Ltd on a rolling one year lease at £160,000 per annum, equating to £2.46 psf (£26.48 psm).
— TNT has taken 61,768 sq ft (5,738 sq m) of industrial floor space at Stadium Gate in Leeds from Endless Llp on a five year lease at £308,840 pa, equating to £5 psf (£54 psm).
— Morgan Sindall PLC has taken 70,200 sq ft (6,521 sq m) of industrial space on Old Run Road in Leeds from F&C REIT on a three year lease at £298,350 pa, equating to £4.25 psf (£45.75 psm), they have an option to break after 18 months.
— Alumasc has taken 48,368 sq ft (4,494 sq m) of industrial space within unit 1 Potter Grange Industrial Estate, Goole, from Ashtenne Industrial Fund Ltd Partnership on a three‑year lease at £160,000 pa, equating to £3.31 psf (£35.61 psm).
yorkshire/humberside
Main industrial locations
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £16.77 £10.12Rate p/a £33,024 £25,739
Financial Services First DirectTelecommunication British TelecomManufacturing Carlton Brick
— Kingston upon Hull — Grimsby
— M6, A1 (M)
— Doncaster — Leeds — Hull
Overview
Major motorways
Nearest freight terminal
Labour rates
14
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentThe North East has the highest unemployment rate in the UK, at 11.2%, significantly greater than the UK average of 8.4%, this has increased from 10.2% in 2010. Aside from Wales, it also has the lowest GVA per head, currently at £15,744. This is an increase of 2.79% since 2009 (£15,304). This area of the UK has been significantly hit by the recession, with many large‑industries choosing to relocate or downsize.
Property values
Town ERV CV LV
Newcastle‑upon‑Tyne £5.25 £50.00 £110,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Doncaster Paralloy Ltd has taken 44,540 sq ft (4,138 sq m) of ground floor industrial space within Unit 1 Cassel Court, Stockton on Tee, from PBJ Property Services on a one year lease at £120,000 pa all inclusive, equating to £5.39 psf (£58.00 psm).
— Metnor Construction has taken 53,305 sq ft (4,952 sq m) of industrial space at Unit 8 Team Valley Trading Estate, Gateshead, from Olnato Ltd for a six month term on at £75,000 pa, equating to £1.40 psf (£15 psm).
— Vantec Limited has taken 70,000 sq ft (6,503 sq m) of industrial space at Davy Drive, Peterlee, from BHK (UK) Ltd on a three year, all inclusive lease at £250,000 pa, equating to £3.57 psf (£38.44 psm), subject to an annual break clause.
— Caterpillar (UK) Ltd has taken 68,521 (6,366 sq m) of industrial space from Grouphomesafe at Unit A Peterlee North West Industrial Estate, on assignment of an existing lease expiring in April 2018 at a passing rent of £236,000 pa, equating to £3.44 psf (£37.07 psm).
— Tinsley Special Products has taken 58,629 sq ft (5,446.81 sq m) of ground‑floor industrial space from Better Properties Ltd on an eighteen month lease at £60,000 pa, equating to £1.02 psf (£11.02 psm).
north east england
Labour ratesLargest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £16.49 £9.09Rate p/a £32,544 £20,540
Retail TescoFinance Services VirginManufacturing Scottish & Newcastle Breweries
— Newcastle‑upon‑Tyne — Carlisle (Ringmoor) — Kingston upon Hull
— M6, M1
— Newcastle‑upon‑Tyne — Middlesbrough — Sunderland
Overview
Major motorways
Nearest freight terminal
Main industrial locations
2 0 1 2 m a r k e t o v e r v i e w
15
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
Secondary property of sub‑standard specification is continuing to struggle. Receivership properties in particular are at risk of sliding into complete obsolecence unless someone takes control. It is a double edged sword, the receivers and administrators are constrained in what they can invest to improve the lettability or marketability of the property on a short term basis let alone develop a longer term asset plan .
Manufacturing is continuing to surge, SME’s have been one of the strongest emerging sectors from the recession and have gone about reinventing themselves and adding value to the supply chain in manufacturing. 5 years ago the manufacturing cost differential between the UK and China was 50%. Recent reports suggest the gap has closed to 15%. Put time and risk into the equation and its clear why competitive advantage is swinging back for UK manufacturers. Whilst warehousing still dominates this is an area which is seeing much more activity with demand. Landlords just need to have faith in these organisations and their covenants.
poor grade will struggleAndrew Smith – Director, Industrial Agency
Aberdeen remains a hot spot with rents pushing up to £10 per sq ft on small industrial stock. The growth of the oil industry and the resurgence of new companies into Aberdeen make this one of the biggest growth markets in the country and we cannot see it slowing up for some time unless oil prices fall back.
There also seem to be other spots across the North West which we are seeing on certain requirements we have for clients. There is a real struggle for good modern stock. Therefore good refurbished ‘ready to go’ modern stock will see good appetite from occupiers with potentially reduced incentives and the possibility of growing rents.
hotspot’s northAndrew Smith – Director, Industrial Agency
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
16
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
EmploymentThe Scottish unemployment rate is 8.6%, which is marginally more than the UK average. The GVA per head is the third highest in the country, at £20,220, and has increased by 2.3% (previous figure £19,775). Scotland contributes an 8.3% share of the total UK GVA.
Property values
Town ERV CV LV
Aberdeen £9.00 £110.00 £500,000
Edinburgh £6.50 £80.00 £210,000
Glasgow £6.25 £75.00 £170,000
ERV Estimated Rent Value per sq ft CV Capital Value per sq ft LV Land Value per acre
Recent real estate news — Capita Symonds acted on behalf of Emerson Electric in acquiring three sites in Aberdeen with rents ranging from £8.00‑£9.00 psf.
— Eddie Stobart Group Ltd has taken 67,689 sq ft (6,289 sq m) of industrial space at 6 Brittain Way, Bellshill on a 15 year lease at £389,212 pa, equating to 5.75 psf (£61.89 psm).
— Group Ltd has taken 25,833 sq ft (2,399.96 sq m) of industrial space at Unit 5 Kingsthorne Park, Livingston, on a new five‑year lease at £115,000 pa, equating to £4.45 psf (£47.92 psm) from Ashtenne Industrial Fund Ltd Partnership.
— Thornbidge Sawmills Ltd has taken 20,125 sq ft (1,878 sq m) of industrial space at 58 Seafield Road, Inverness, from Tenon Group SIPP on a new 10‑year lease at £90,000 pa, equating to £4.47 psf (£48.14 psm).
— SPD Print Solutions has taken 21,790 sq ft (2,024 sq m) of industrial space at Block 20 Units 3 & 4 Cambuslang Investment Park, Glasgow, from Buccleuch Property on a 10 year lease at £87,160 pa, equating to £4.00 psf (£43.06 psm).
— Vion Food Group Limited has taken 123,996 sq ft (11,519 sq m) of industrial space at 5 Royston Road, Livingston, on a new lease at £200,000 pa, equating to £1.61 psf (£17.36 psm).
— Trespass has taken 45,000 sq ft (4,180.64 sq m) of industrial space within Unit 1Bucanan Park, Stepps, from Catalyst Capital on a one year lease at £63,000 pa, equating to £1.40 psf (£15.07 psm).
scotland
Main industrial locations
Largest employee sectors Examples
Managers/Senior Officials HGV DriversRate p/hr £18.15 £9.65 Rate p/a £35,500 £24,035
Financial Services RBSHealth Education NHSEnergy Scottish Power
— Grangemouth — Leith
— Aberdeen — Greenock
— M8, M9, M80, M90, M74
— West Edinburgh — Newbridge — Livingston — Glenrothes — Grangemouth
— Aberdeen — Eurocentral — East Kilbride — Hillingdon — Cambuslang
Overview
Major motorways
Nearest freight terminal
Labour rates
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 17
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
ERV Based on 10,000 sq ft brand new unit in a prime location, with 45‑50% site cover and 10% office content, and a lease term of 5‑10 years.
CV Based on 10,000 sq ft brand new unit in a prime location with 45‑50% site cover and 10% office content.
Land Value Based on land with an unrestricted B1(c), B2, & B8 planning consent with a 45‑50% site cover and in a prime location. Also based on no abnormal cost for any environmental issues, s.106 committments or site levelling.
GVA Gross Value Added.
A map providing an overview of the GVA per head for the UK industrial regions is below. These figures have been explained in more depth throughout the document.
appendix
17.40.21
north west
15.10.15
wales
17.1-0.49
west midlands
19.0-1.57
east
18.10.76
east midlands
16.9-0.56
yorshire/humberside
15.70.45
north east
20.21.13
scotland
18.70.34
south westsouth east 21.9
0.3
< 16
16 ‑ 18
> 18
GVA per head £’000, 2010
% Change in GVA 2008‑2010
london 35.00.18
18
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
uk distribution motorway map
M27
M275
M3
M49
A404(M) M1
M40
M1
M6M69
M6
M56
M53M6
M56
M60
M18
M621
M1
M18
M60
A57(M)
A6144(M)
M62
M9
M57
M6
M65
M61
M9M80
M876
M9
Cannock East
Riddrie
Cambridge North West
Cambridge West
Cambridge South West
Cambridge South
Duxford
Great Chesterford
Stansted AirportHarlow
Brentwood
Upminster
South Ockenden
Dartford Crossing
Dartford
Darenth
Swanley
Woodford
Loughton
Cheshunt
Waltham Abbey
Potter’s Bar
South Mimms
Hatfield South
Hatfield
Stanborough
Welwyn G. City
Welwyn
Stevenage South
Stevenage North
Letchworth
Stotfold
M11
A1(M)
Huntingdon
Alconbury
Peterborough
Yaxley
SawtryA1(M)
Chiswell Green
Bricket Wood
M25
Watford East
Elstree
Mill Hill
Brent Cross
St AlbansM10
M11
King’s Langley
Watford North
Maple Cross
Uxbridge
West Drayton
Heathrow Airport
Hayes
Brentford
Chiswick
M4
Stanwell
StainesSunbury
Leatherhead
Coulsden
Gatwick Airport Three Bridges
Crawley
Crawley SouthM23
Godstone
Sevenoaks
Chelsfield
Wrotham
Borough Green
West Malling
Aylesford
Maidstone North
Maidstone
Maidstone East
Ashford North
Ashford East
Hythe
Channel Tunnel
Folkestone
Folkestone West
LONDON
Strood
Rochester
Blue Bell Hill
Rainham
Sitting-bourne
Faversham
Faversham East
Langley
Slough
Slough West
Maidenhead South
A308(M)
Maidenhead West
Maidenhead South West
Bracknell
A329(M)
Reading East
Reading South
Reading West
Newbury
Hungerford
Swindon East
Swindon West
Chippenham
Chipping Sodbury
Frenchay
Stapleton
BRISTOL
Patchway
Over
Bagshot
Farnborough
Cove
Hook
Basingstoke
Basingstoke West
North Waltham
Winchester East
Winchester South
Twyford
Eastleigh
Chandlers Ford
SouthamptonSouthampton Airport
Hedge End
Bursledon
Locks HeathFareham
Wallington
HilseaPortsmouth
Upton
Nursling
Totton
Cadnam
Avonmouth
Portishead
Weston-super-Mare
Clevedon
Burnham-on-Sea
Bridgwater North
Bridgwater South
Taunton
Wellington
Tiverton
Cullompton
Exeter Airport
Exeter East
Exeter South
Hemel HempsteadHarpenden
Luton
Toddington
WoburnMilton Keynes
Northampton West
Northampton
Northampton South
M4
Daventry
M45Crick
M1
Lutterworth
Rugby
Coventry East
Sapcote
Hinckley
Coventry
Coleshill
Stechford
Lea Marston
Tamworth East
Gravelly Hill
BIRMINGHAM
Shirley
Solihull
N.E.C.
Hockley Heath
Warwick
Royal Leamington Spa West
Royal Leamington Spa East
Gaydon
Banbury
Upper Heyford
Bicester
OxfordThame
Loudwater
Chinnor
Stokenchurch
High Wycombe
LutonAirport
Havant Catherington
Horndean
Waterlooville
Purbrook
Magor
Langstone
Newport East
Newport West
Rogerstone
Bassaleg
M4
A48(M) St Mellons
Cardiff East
Cardiff West
Pencoed
Llantrisant
St Fagans
Bridgend
Pyle
Margam SouthTaibach
Port Talbot
Neath
Briton Ferry
Llansamlet
Swansea North
Morriston
Swansea West
Pontardulais
M4
Great Barr
West Bromwich
Oldbury
Halesowen
Rubery
Bromsgrove Wythall
Alvechurch
Droitwich
Worcester North
Worcester South
Strensham
Tewkesbury
Cheltenham North
Cheltenham
Gloucester
Gloucester South
Stroud
Thornbury
Ross- on-Wye
Leicester West
Coalville
Loughborough
Kegworth
Long Eaton
Nottingham
Leicester South
East Midlands Airport
Annesley Woodhouse
Sutton-in-Ashfield
Chesterfield
Staveley
Sheffield East
Rotherham
SHEFFIELD
Sheffield North
Chapeltown
Hoyland
Barnsley
Darton
Crigglestone
Wakefield
Ardsley
Walsall
Wednesbury
Feather-stone
Wolver-hampton
Albrighton
ShifnalTelford
Hadley
Wellington
Aston
Cannock South
Cannock West
Stafford South
Stafford North
Stoke-on-Trent
Crewe
Knutsford
Holmes Chapel
Sandbach
Lofthouse
Maltby
Thorne
Blyth
Warmsworth
Bentley
Adwick-le-Street
Doncaster South
Doncaster East
Hatfield Woodhouse
Crowle
Scunthorpe
Scawby
Elsham
North Cave
Howden
Goole
Pontefract
WhitleyCastleford
Normanton
Oulton
M1
Woodlesford
Leeds East
Garforth West
Garforth East
Lymm
Altrincham West
Altrincham EastManchester Airport
StrettonDaresbury
Runcorn
Elton
Saughall Chester
Little StanneyEllesmere Port East
Ellesmere Port North
Overpool
EasthamHooton
Bidston
Prenton
Bebington
Wallasey
Channel Tunnel
Newall Green
Northenden
Wythenshawe
Cheadle West
Gatley
West Didsbury
Sale
Stretford
Trafford Park
Trafford Centre
Peel Green
Carrington
Risley
Warrington East
Worsley Walkden
Clifton Green
Prestwich
Cheadle East
Stockport West
Stockport East
Bredbury West
Bredbury
Eccles
Bridgewater WayMedlock St
Cambridge StUpper Brook St
London Rd Mottram
Hyde
Hyde West
Denton
Crumpsall
Middleton South
New Moston
Oldham South
Audenshaw
Heywood
Middleton North
Rochdale
Huddersfield
BrighouseOutlane
Denshaw
Milnrow
Bierley
Bradford
CleckheatonMorley
Gildersome
Beeston
Elland Rd
Holbeck
Holbeck West
Dewsbury Rd
Wakefield Rd
Wellington St
Westgate
Woodhouse Ln
Clay Pit Ln
Vicar Ln
Regent St
Marsh Ln
LEEDS
M1
M1
Measham
Hollins
Bury
Summerseat
Edenfield
WinwickHaydock
Ashton in Makerfield
Bryn
Warrington North
Great Sankey
WidnesRoby
LIVERPOOL
Wigan
Skelmersdale East
Skelmersdale West
Ormskirk
Maghull
Aintree
Prescot
Southdene KnowsleyHuyton with Roby
Kirkby
SpekeM62
Leyland
Standish
FarnworthBamber Bridge
Lostock HallChorley
Horwich Atherton
Bolton
Feniscowles
Blackburn South
Blackburn East
Lower Darwen
Accrington
Padiham
Hapton
Burnley West
Burnley North
Brierfield
Nelson
Colne
Preston
Malpas
Margam North
Baglan
AberavonCapel
HendreM4
Bishop’s Stortford
Newent
Waterstock
Curdworth
Burnt-wood
Lichfield West
Lichfield East
Tamworth West
M42
M42
M42
Tamworth South
Chepstow AustM48
Hunslet Belle Isle
RibbletonKirkham
FulwoodBlackpool
Lancaster North
Lancaster South
M6
M6
Carnforth East
Carnforth North
Carlisle East
Carlisle North
Carlisle South
Lazonby
Penrith
Shap
Tebay
Kendal
Kirkby Lonsdale
M6
Moffat
Crawford
Johnstonebridge
Lockerbie North
Lockerbie South
Ecclefechan
Annan
Kirkpatrick Fleming
Gretna
Abington
Larkhall North
Hamilton
Larkhall South
Kirkmuirhill
Lesmahagow
Coalburn
Uddington
BellshillCambuslang
Hillington
Braehead
Renfrew
Paisley
Glasgow Airport
Paisley West
Linwood
Erskine Bridge
Langbank
AnderstonKinning
Park
GLASGOW
Gallow-gateCowcaddens
Garnet-hill
Charing Cross
Laurieston
Thornliebank
Pollok
Crookfur
Newton Mearns
Dumbreck
M898
M77
Ibrox
GovanDennistoun
Springburn Rd
Robroyston
Stepps
Stirling South
Stirling North
Dunblane
Whitburn
Shotts
Newhouse Livingston
Bathgate
Newbridge
Kirkliston
Edinburgh
Gartcosh
Cumbernauld South
BailliestonEaster-house
BroomhouseRutherglen
Gartham-lock
Ruchazie
Philpstoun
Kincardine Bridge
Falkirk
Grangemouth
Polmont
Linlithgow
Stenhousemuir
Bonnybridge
Cumbernauld North
M8
M80
Milnathort
Kinross
Ballingry
Perth East
Kelty
Dunfermline North
Cowdenbeath
Burnside
Bridge of Earn
Perth South
M90
Perth West
Inverkeithing
Dunfermline South
M6A38(M)
M6M6
M6Toll
Micklefield
AberfordA1(M)
Oldham North
Rostherne
Castle Donington
A1(M)
M181
M180
M271
M27
A3(M)
A627(M)
M66
M67
M62
M62M62
M606
A58(M)
A64(M)
M62
Salford
MANCHESTERM602
Clayton Green
M8M8
M20M26
M20
London Colney
M25
Chorleywood
M74
M80M73
M74
M73
M8
Twyning
Ledbury
A601(M)
Redbridge
Chester-le-Street
Tyne Bridge
Manors
Camden St
Jesmond Rd
A167(M)
Great North Rd
NEWCASTLE upon TYNE
Washington South
Darlington South
Barton
A66(M)
Darlington North
Newton Aycliffe
Sedgefield
Bowburn
A1(M)
Boroughbridge
Dishforth
Walshford
KnaresboroughA1(M)
Birtley
Washington North
Pelaw
Monkton
A194(M)
A195(M)
Kingswell
Fenwick
Kilmarnock
Wetherby
A1(M)
South Milford
Beaconsfield
Cowdenbeath
Motorway
Motorway number
Motorway junction, with access to and/or from non-motorway network
Other road
Motorway interchange, no access to or from non-motorway network
Motorway interchange, with access to and/or from non-motorway network
Perth South
London Orbital
Kent
South Coast
London, Bristol & South Wales
Eastern
Northern
London & South Midlands
North Western
South Western
Trans-Pennine
Lancashire & Cheshire
Scottish
M90
KEY
M65
M5
M5
M5
M50
M54
M40
A74(M)
M55
M42
M32
M9
West Thurrock
M8
MOTORWAY MAPof
ENGLAND, SCOTLAND and WALES
Inspired byHARRY BECK’S
LONDON UNDERGROUND MAP
© Copyright 2005, 2007, 2008 G Higginswww.motorwaymap.co.uk
Printed by The Map Centre, Hereford www.themapcentre.com V3
M2
M25
Addlestone
ReigateCobham
M61
M58
M62
M8
Catthorpe
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution 19
© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
The following outlines market structure of leases and issues to be aware of.
Rent — Payable quarterly in advance. — Rental information is expressed as a rent per square foot per annum.
— Space is measured and expressed in gross internal floor area (which includes columns) with the exception of a handful of landlords that use gross external area. Landlords give tenants the right to measure and check their quoted floor areas and dispute them if different.
— The market is used to granting rent free periods as incentives. Depending on the exact market conditions and length of lease, rent free periods can vary from 0‑18 months plus.
Term lengths Standard Lease Term: Historically, leases in the UK have been long in length from 20 to 25 years. In the past 10 years, a greater level of flexibility can be obtained with normal lease lengths being between 3 and 15 years and with “options to break” built in.
Options to break: These are likely to be at five yearly intervals and will be subject to a notice period of 6‑12 months. In certain circumstances, depending upon the market conditions, some breaks will be subject to a penalty payment and may affect the incentives that can be negotiated.
Rental deposit Landlords will generally require a deposit of 3‑6 months headline rent, unless UK accounts meet certain financial tests (e.g. profits in excess of three times rental for the preceding three years). Alternative forms include bank guarantees or personal guarantees.
Rent Reviews 5‑yearly, generally upward only to open market rental value. The government did threaten to introduce legislation to impose downward review but withdrew. Market view was lease lengths had shortened, however this is an issue that is unlikely to go away.
Repairs/Reinstatement Typically leases are granted on a full repairing and insuring basis (FRI), placing full responsibility on the tenant for all parts of the property including structural, internal and external. If the property is on an estate, common area maintenance/ security etc will be recovered via a service charge. Reinstatement (dilapidations): UK leases contain stringent dilapidation/restoration clauses requiring a tenant to return the accommodation to the initial leased condition. Tenants can reduce this by rewording the lease or including a schedule of conditions.
Additional costs Other cost, other than rent, borne by the tenant include:
— Service charges: This will include a contribution to the costs of the overall maintenance of the building – generally £0.50‑£1.50 per sq ft per annum
— Municipal taxes (rates): typically amount to 40% of rental levels. These tend to be re‑valued by the Government every five years (latest 2010). The 2012/13 multiplier (Uniform Business Rate) is £0.458
— Insurance: the landlord will insure the building and re‑charge the tenant. Contents insured directly by the tenant.
— VAT: where a property is elected for VAT (Value Added Tax), which most buildings are, the costs will be subject to VAT at the prevailing rate which is presently 20%.
Additional costs — Stamp Duty Land Tax (SDLT): is based on the NPV of the rent over the (continued) lease term
— Legal Fees: Charged on an hourly basis or fixed by agreement for time.
— Agents Fees: typically 7.5‑10% of the first years rent (excluding incentives) when appointed.
Tenant improvements Usually require the formal consent of the landlord. This will usually include a specific provision requiring the property to be returned to its original condition on determination. Normally a lease can allow for non‑structural internal alterations to be carried out with the landlord’s consent. Structural and external alterations will always require the landlord’s consent (sometimes to be unreasonably withheld).
Alienation The lease will usually allow the tenant to sublease or assign its interest subject to various conditions to protect the landlord’s position.
Useful InformationCode for Leasing Business Premises - advice on a voluntary code for leasing business property. www.leasingbusinesspremises.co.uk
Capita Symonds Real Estate - available properties www.capitasymonds.co.uk/propertysearch
Energy Performance Certificates - government link epc.direct.gov.uk
market structure
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© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
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big box dilemma & the 3pl challengeAndrew Smith – Director, Industrial Agency
capita group – wetherby
Capita Symonds acted on behalf of Capita Group in the letting of 160,000 sq ft in Wetherby to Lindam in 2011 at a passing rent of £4.50 per sq ft on a 7 year lease (no breaks).
Activity in the big box market is likely to be based largely around existing stock and pre‑commitments.
The internet continues to change the face of the logistics market. In 2011 it grew to about 11% of the total retail market and we will probably see industrial buildings getting bigger. We have seen two large Amazon take ups last year across the country and other large requirements in the pipeline.
In London there are now just a handful of buildings over 150,000 sq ft. It’s a reasonable expectation therefore that we’ll see some pre‑leasing this year particularly as 2011 was light on activity from the retailers.
3PL’s are struggling to find the right stock which offers modern efficiencies.The lack of development in the last 3 to 4 years has definitely impacted supply to the point where there is a demand challenge looming. New builds are now being considered for the contract led enquires if developers can make the funding work with added lease flexibility.
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© Capita Symonds 2012. All rights reserved. The information is for guidance purposes only and represents Capita Symonds’ general views. No liability will be accepted for loss or damage arising from its use. Formal agency advice can be provided upon request.
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution Engagement with the green agenda among occupiers and investors
continues to increase Energy Performance Certificates (EPCs) are now a mandatory requirement on marketing details. New build specifications have increased focus on sustainable features. Its not just about complying chasing a Grade A rating for the sake of it either. At Central Park (www.london‑centralpark.com) we are forecasting up to 35% savings on typical energy costs, a material saving and value add to the marketability and pricing of the scheme. The next potential move by government is to offer incentives in rates and other tax reforms to drive the green agenda harder.
continuing to greenNoel Stevens – Divisional Director, Industrial Agency
trelleborg – trowbridge
Capita Symonds, on behalf of Trelleborg, disposed of the 12 acre (100,000 sq ft) former Trelleborg site in Trowbridge for £2.1 million to DTR VMS with completion due in May 2012.
2 0 1 2 m a r k e t o v e r v i e wIndustrial & Distribution
125 Shaftesbury Avenue, London WC2H 8AD t +44 (0)20 7544 2000 f +44 (0)20 7544 2222 capitasymonds.co.uk/realestate
The information provided herein is intended as a guide only and reflects “typical market practice”. Whilst we have no reason to believe that there are any inaccuracies or defects in the information provided in this report, it is constrained by the use of information and forecasts from other persons and we cannot warrant the accuracy and completeness of such information and forecasts. The information provided in this report is of a general property market nature and is provided for information purposes only.
We accept no liability for any loss or damage (including consequential or indirect loss or damage which shall include but not be limited to loss of property or of profit, business revenues or anticipated savings) of any costs, claims, demands, proceedings, expenses or liability of any nature arising directly or indirectly out of use of or access to the information and forecasts of the Report and whether or not arising from our negligence nor that of our employees or agents.
Professional, including legal advice, should be sought for specific transactions.
switzerland’s largest brownfield siteA unique opportunity to acquire one of Switzerland’s largest brownfield sites of 191 acres (77.4 hectares) with 2.45 m sq ft (228,000 sq m) of former industrial buildings.
www.swisscentral.com
Andrew SmithDirector, Agency
t +44 (0)207 544 2119m +44 (0)7919 [email protected]
James ShillabeerAssociate Director
t +44 (0)207 544 2200m +44 (0)7792 [email protected]
Victoria O’BrienAssistant Surveyor
t +44 (0)207 544 2048m +44 (0)7788 [email protected]
Mike StaffordBusiness Development
t +44 (0)207 544 4232m +44 (0)7788 [email protected]
Noel StevensDivisional Director
t +44 (0)207 544 4217m +44 (0)7766 [email protected]
Rob CassDirector, Investment
t +44 (0)207 544 2256m +44 (0)7901 [email protected]
For further information, please contact: