News

Midlands logistics ‘Golden Triangle’ continues the thrive

Demand across the midlands is not easing up as occupiers fight for the limited industrial and logistics stock.
January 31, 2023
Demand for industrial and logistics space in the Midlands’ ‘Golden Triangle’ shows no sign of abating, says regional commercial property specialist Carole Taylor.

 Carole, Birmingham-based Regional Managing Partner of property consultancy Vail Williams, believes the advent of ‘last mile’ local hubs has actually boosted the need for strategically located major storage facilities.

The phrase ‘Golden Triangle’ was first coined in the late 1980s when a small triangle of land in the middle of the East Midlands, stretching between the M1, M6 and M69, became renowned for its logistics prowess.

Initially dominated by the Magna Park development at Lutterworth, it soon expanded to encompass some 550 square miles or so, from Northamptonshire up the M1 to Leicester, and West as far as the outskirts of Birmingham.

By the 1990s, the Golden Triangle had become the UK’s premier logistics hub, housing a high density of distribution facilities, home to some of the biggest names in retail.

But recently its status had been called into question amid the rise of online shopping, automaton and the pandemic-driven demand for last-mile logistics across the country.

Carole said: The Golden Triangle absolutely remains relevant as the UK’s centre for logistics – perhaps more so than it has ever been.

“Demand for industrial and logistics space in the Golden Triangle isn’t going to diminish. Procurement won’t change, manufacturers aren’t going to reduce their ‘just-in-time’ reliance, so there will continue to be a need for storage.

“Over the course of the past three years, we’ve seen a boom in demand for industrial and logistics space across the UK, driven in part by Brexit and supply chain safeguarding, but also by the explosion in online retail caused by the pandemic.”

She added: “However, the high level of demand we’ve seen nationally has not taken away from the Golden Triangle, but we have seen a split in the market with more and smaller units covering last-mile delivery located in all the major towns and cities.

“What this means is that there are still regional and national industrial and logistics hubs, and last-mile delivery is not coming at the cost of the big hubs – rather in addition to them.

“This demand, together with the lure of the connectivity benefits that the Golden Triangle boasts, makes it more prolific than ever.

“But it’s not just the Amazons of this world who make up the mainstay of this demand, although they are taking large hubs in the M6 triangle.

“The area boasts a range of occupiers in the retail, medical and automotive sectors too, who benefit from the area’s connectivity and access to a skilled labour force.”

Carole said that the main challenge facing this location, however, was land supply, something reliant on the Local Plan process.

“There simply isn’t enough land to feed occupier demand – indeed, we have a requirement for 350,000 sq ft for a client at the moment with nothing readily available.

“Various Local Plans are being revisited with this in mind. However, we need to see much more collaboration between neighbouring authorities, to ensure more of a strategic approach to land supply.

“What we are seeing at the moment, is a lack of joined-up thinking, despite local authorities all touching each other’s boundaries.

“This needs to change if we are to ensure that the Golden Triangle remains relevant as a leading light in industrial and logistics for years to come.”

The Golden Triangle’s major centres include the 550-acre Magna Park, home to 29 different occupiers, including Amazon, Whistl, Asda, Wayfair and Disney, and Hinckley, where the last phase of IM Properties’ 82-acre scheme is being marketed.

Castle Donington, close to East Midlands Airport, boasts Segro’s Logistics Park – East Midlands Gateway, a 700-acre development adjacent to the airport, which has delivered over 4.5m sq ft of logistics accommodation to date, with a further c.70,000 sq ft available.

Tamworth, located at J10 of the M42, had two main logistics sites at Relay Business Park and Birch Coppice Business Park, and now an adjacent new distribution park is being developed at Core 42, where rents have reached around £8.25 psf. There are also major new developments at Coventry and Rugby.

At Daventry International Rail Freight Terminal (DIRFT), the most successful intermodal (rail/road) logistics park in the UK and home to Eddie Stobbart, DHL and Boohoo, expansion continues with a new unit of 327,000 sq ft being developed by Prologis on a speculative basis and set to be available in May

Carole added: “Occupiers should expect to see industrial rents continue to rise across all standard of units in the Golden Triangle in 2023, as demand continues to outstrip supply and build cost continues to impact schemes.

“However, the latter is starting to stabilise with materials not increasing at the rate they once were. Whilst rents in Coventry have reached £10 psf and will continue to rise, we don’t expect this to be at the same rate as it has been over the last few months.