Harris Lamb Blog – 16th May

16th May, 2011.

Food Stores Continue to Acquire New Sites – The Property Opportunities

By Andy Lamb, Director.

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.

We have been doing a fair number of conditional food retail deals over the last two years, possibly more than we have ever done before.

Across the national operators of food supermarkets they are all acquisitive as they continue to grow their businesses largely at the expense, or so it would appear, of the smaller independent retailers.

When you look at the sales figures being reported it is little wonder their appetite for growth is so good.

Sainsbury’s reported like for like sales up to 4.2% for the 1st quarter 2011. It also announced it had exceeded its target for opening and extending stores year. Sainsbury’s is looking again at opening dedicated warehouses for online orders.

The Co-operative Group has posted operating profits in its food division up 33% to £382.6m. It plans to open more branches by 2013. All the remaining Somerfield stores are due to be rebranded by early summer in 2011.

The Co-operative Group is rumoured to be taking a 500,000 sq ft distribution centre in South Normanton to support its recent acquisitions.

Haldranes will convert the 20 former Netto stores acquired from Asda by the end of May 2011.

Tesco reported profits rose by 12% from £3.8bn for three years to February 2011. Tesco is looking to realise property profit in the range of £250m – £350m per year by continuing to focus on sales and leasebacks of UK stores.

Waitrose announced that sales grew in 2010 by 9.8% to £4.97bn. It is looking to open a new regional distribution centre in Chorley in 2012 as part of its plans to double its estate in the North and is to open 100,000 sq ft site in Acton for online orders.

The merger between AF Blakemore and Capper & Co will create the largest Spar franchise in the UK within 1,096 stores and a combined turnover of £1.1bn.

Morrisons have obtained permission for a 375,000 sq ft depot in Bridgwater, adding to the 890,000 sq ft. it is due to open at the end of 2011.

Morrisons plans to open its first M convenience store in Ilkely in July 2011. Others in Manchester and Merseyside are due to follow.

Marks and Spencer are planning to add around 2% to its portfolio in the UK by opening new stores.

If you have a site or property in a good town centre or edge of town location then talk to us as we can quickly establish with our Planning and Agency teams the potential for any site to be suitable for retail use.

We are working on a cross section of new food store applications and agreeing deals across England. We are also well established in the logistic and warehouse requirements for these operators and their 3PL partners.

For advice and assistance on all aspects of development, Andy would be happy to help. He can be reached on 0121 455 9455 or via email: andrew.lamb@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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