Whilst there are a number of industrial projects on the go, there is a dearth of small industrial / warehouse supply.
Conversely, the office market is well provided for, with a variety of floor spaces available.
Innovation in industrial property development
When it comes to innovation, developers are getting better and better at delivering innovative schemes using new, modern materials and techniques to meet the necessary sustainability credentials.
The likes of Goodman Developments Limited and Prologis Logistics Property have been using innovative, sustainable processes in their industrial/logistics schemes for some time – from recycling rainwater and use of PV solar panels to green roofs and living walls.
Interestingly it is starting to attract funding from investors with a specific sustainability/green agenda who have historically been more attracted to office schemes – such as Bridges Ventures which funded the £21 million development of 283,000 sq ft of industrial units by Opus Land at Kingswood Lakeside.
Given that their funds are spent on BREEAM sustainable schemes, the fact that they are willing to invest in big industrial schemes is testament to the work that developers are doing to innovate in this area.
Which developers are most active currently?
Whilst there are a lot of large shed developments currently under construction or in the pipeline and there remains demand for it, where we are seeing shortage of supply is in the smaller industrial / warehouse unit.
Units between 15-50,000 sq.ft are rare, and there is currently nothing available between 1-2,000 sq.ft.
Goodman Developments are currently involved in several projects across the Midlands including:
- 240,000 sq.ft logistics space, Nuneaton 230, Bermuda Park, Nuneaton where they have applied for planning consent
- Completed 335,000 sq.ft logistics development, Leicester Commercial Park
- Onsite at Centron Commercial Park with approximately 90,000 sq.ft.
- Development underway at East Midlands Intermodal Park
- 1.1million sq.ft. of distribution / warehouse space at Crewe Commercial Park
Prologis also has a number of industrial projects ongoing:
- 535,000 square foot industrial logistics building at Daventry International Rail Freight Terminal (DIRFT)
- Breaking ground at new manufacturing & distribution hub Prologis Park, Hams Hall
- 440,000 sq.ft under construction at Prologis Central Park Rugby
- Sites for design and build at Prologis Park Fradley
- Finishing units totalling 310,000 sq.ft development at Birmingham Interchange
When it comes to the office market, there remains a lot coming through, particularly in Birmingham. From new developments such as Paradise, 103 Colmore Row and Three Snow Hill, to high-quality refurbishments like Platform 21.
Unlike what we’re seeing on the industrial side, there is opportunity across the board, with a good spread of floor sizes – from the larger developments at Three Snowhill, to smaller buildings like 4 St Philip’s Place.
Rents continue to rise with expectations on new developments from £34 per sq. ft. upwards, whilst refurbished, Grade A office space can expect to achieve £23-24 per sq. ft.
The office pipeline is strong with a good level of supply coming through from new schemes like Beorma Quarter and Smithfield in Digbeth and Eastside Locks, developed by Goodman.