Harris Lamb Blog – 29th March

 


 

Neil Slade

29th March, 2011.

Property Disposals to the Manufacturing Sector.

By Neil Slade, Commercial Agency.

With the news that UK manufacturing is growing at its fastest pace in 16 years; this is seemingly assisting with the recovery of the Midlands property market for industrial and warehouse units.

 

 

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.

Here at Harris Lamb we are seeing a significant increase in property disposals to manufacturers.  A few weeks ago I talked about the automotive sector particularly, however, we are ‘doing deals’ in the industrial sector around the Midlands to companies in diverse areas, from renewable energy to pharmaceuticals to precision engineering. 

The Office for National Statistics has just announced manufacturing output up by 6.8% on January 2010.  With Bank Base Rate unaltered at 0.5%, this has given both the economy generally and the manufacturing sector particularly the headroom to consolidate and now grow. 

From our Stoke and Birmingham offices primarily, we have been witnessing disposals to a range of manufacturing companies at an encouraging rate.

We currently have somewhere approaching 600,000 sq. ft. of manufacturing requirements, where we are acting for clients looking for space.  The return of a market in providing design and build turnkey packages for occupiers is not one that many would have predicted barely 12 months ago.

DTZ research shows 20% of the currently available industrial stock is prime.  The research also showed 6.9 million sq. ft. of take up in 2010 and 990,000 sq. ft. being disposed of in the final quarter of 2010.

The significant figure from the research is that year on year there are overall reductions in available stock now taking place with 27.1m sq. ft. available in Q4 2009 and 25.3m sq. ft. available a year later.  With speculative construction looking some way off, the reduction in available space will at some stage see a firming effect on rentals and capital values. 

Whilst take up of industrial and warehouse space in the Midlands is continuing to be helped by manufacturing and associated third party logistics partners the region will see plenty of follow on benefits.


If you would like to speak with Neil about any issues raised in his blog, he can be reached on 0121 455 9455 or via email: neil.slade@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.