Harris Lamb Blog – 7th Jan

7th January, 2011.

Demand For Development Land

By Jacqui Bayliss, Director,

I have seen some reports being published over the last few weeks suggesting increased demand for development land. I have even seen one quote from a competitor that there is ‘soaring demand for development land across the Midlands’….

The route provides 27 miles of privately funded and operated highway from Coleshill in North Warwickshire to Cannock in South Staffordshire. The road carried an average 47,592 vehicles on weekdays in the summer of 2010 and from my experience of the Toll Road, private cars form the vast majority of the traffic.

The M6 Toll Road was identified as an “M6 Relief Road” to alleviate congestion on the M6, which is something many people feel has not been adequately addressed and, with one way car tolls at peak periods of £5, this is something to be debated elsewhere.

From a property perspective the benefits have probably been more tangible than the traffic improvements. The southern end of the Toll Road and the ‘T1’ junction close to J4 M6 coincided with some of the latter stage build projects at the Hams Hall National Distribution Park, a 430 acre business park which ranks as one of the best such employment parks in the UK.

Junctions T2 and T3 appear to largely function as commuter gateways for those living to the south and east of Sutton Coldfield from where national motorway access has improved considerably and the effect on house prices has been positive in these areas.

The access to Junctions T4 and T5 at Weeford and Lichfield has given a stimulus to residential and commercial property markets alike with possibly the biggest winner being the 300 acre Fradley Park, where some of the largest distribution buildings in the area have been built with more to come. We are marketing the new Fradley Prologis Scheme with 70 acres and units to 700,000 sq ft available to be built and which will be on site shortly.

T6 Burntwood, a forgotten part of the West Midlands conurbation 10 years ago for business and for new build residential perhaps, has not quite been “transformed” but certainly “considerably improved”.

T7 & T8 and the Cannock access points to the Toll Road provided the catalyst that has helped to promote the former coal mining town into a first rate employment location. Significant development of a cross section of employment type accommodation from offices to manufacturing and warehouse operations has bought vitality to Cannock which I think is largely due to the Toll Road passing the town’s doorstep.

For those drivers who still regularly sit stationary on the M6 between junction 8 and 10 bemoaning the state of the traffic and whether the Toll Road has done the job it promised, the tangible benefits are probably in property as much as traffic counts. The commercial new build and viability of new schemes along the entire length of the Toll Road has been transformed since the road was built.

For the positive effects of the Toll Road you may look little further than the development and opportunity is has created alongside it.

2010 has certainly seen an improvement or rather the return of a market in development land after the near complete lack of a market for most of 2008 and the whole of 2009. Descriptions of the development land market as sterile during 08/09 are probably correct.

Residential land deals are probably leading the market back to an active level and the £8 m sale by Goodman of the Browns Lane, Coventry site to Taylor Wimpey a few months ago may be one of the ‘stand out’ deals of 2010.

Harris Lamb have just sold a mixed use commercial development site on Penn Road in Wolverhampton on behalf of Parkridge to Cranford Projects. This is a 2.7 acre site which went unconditionally at a sale figure that achieved over £400,000 per acre, an adjoining slightly smaller site is under offer for sale and suitable for a variety of commercial uses. We are also close to a major land sale for residential use on Bransford Road in Worcester which looks set to change hands to a national housebuilder.

The main characteristic of demand in land at the moment is that quality counts. Demand led by consumers and industry is that the better locations are the ones favoured and earmarked for development sooner rather than later. Any hints of demand being ‘suspect’ or ‘unsure’ from end users seems to cast sufficient doubt creating sites unviable or not worthy of further consideration.

We are working on several projects involving a trade in land where new build looks likely to come forward in 2011 with residential, care, retail, mixed use and employment projects all involved.

Justin Parker, Managing Director of A&J Mucklow, one of the leading active developers and investors in the Midlands area with whom we conduct a variety of work across our 3 offices, provides some insight:

“We are now looking to invest in strategically located development sites for the first time in the last 3 years, looking at opportunities to develop and add to our portfolio of industrial, office and mixed use investments. As a major developer and investor it is important for us to support our existing stock of tenants when appropriate, as well as adding a new stock of investments.”

“Our requirements will look at sites across the Midlands and we think the market conditions now favour land acquisitions for the first time in some while – where we have realistic potential to develop. We welcome information about all sites and opportunities in the wider Midlands region being put to us” – Justin Parker, A and J Mucklow (0121 5501841, Justin.parker@mucklow.com)

Demand is being lifted by the increased confidence in the consumer sector, this despite much press and media comment that appears to ‘beat this back’. We are also seeking a significant increase in business confidence born from a number of factors but corporate UK seems to be rising to the challenge.

Ultimately, I believe the prospects for 2011 and development activity look far brighter than they have for the last 3 years.

If you have a requirement for development land or are looking for advice and strategic input, please contact me or one of the development land
team.

Jacqui Bayliss.

Jacqui can be reached on 01905 22 666 or via email: Jacqui.bayliss@harrislamb.com.

Disclaimer: The views expressed within this article or weblog (‘blog’) are the personal views of the contributors and authors only and do not necessarily reflect the views of any named companies or thier employees.

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