A Warwickshire commercial property expert says the “terribly neglected” small warehouse and industrial sector needs an equivalent of social housing provision to deal with a huge national increase in demand.
Simon Hain, from ehB Reeves, said while the large warehouse sector is very strong across the country, there is a huge shortage of smaller units which is harming small business development.
The Leamington-based firm’s director said an effective solution would be to mandate the creation of small warehouse or workshop units every time a large warehouse is built, similar to the rules which mean housebuilders have to give over a percentage of every new development to affordable homes.
He said this would help support the burgeoning small business sector of entrepreneurs who set up companies at home, both during lockdown and prior to Covid-19, but have nowhere to go if they want to scale up.
Simon said: “While retail rents have been chopped, warehousing/industrial units has remained strong and is growing steadily year-on-year, to the point there is a huge shortage of small units.
“Nobody is building small units because they are proportionately more expensive to construct. Building a single large warehouse generally requires the connection of one set of services but if you have a large site broken down into many starter units, each one of those will need to be fitted out with electricity, heating and so on.
“The sector has been neglected terribly. At a time when lots of people have been setting up businesses at home during lockdown, there is absolutely nowhere for them to go if they want to scale up.
“This shortage pushes rents up and stymies the development of small businesses. In my opinion, local authorities and county councils aren’t doing enough to help.
“What we need is a social housing equivalent in the industrial and warehouse space sector. Whenever a large warehouse development or even large-scale residential developments are built, there needs to be a percentage given over to smaller business units.
“We must also consider the cost of construction has risen over and above inflation, increasing the development rate per square metre.”
Simon said the idea of a social housing equivalent of the right design for warehouses and industrial space would work for smaller businesses because they are often more agile in how and where they operate.
“The recent, significant changes to the planning user class order, which has broadened the use of many commercial properties, has lead to a further increase in demand for smaller business units,” he added.
“In the time of technology we live in, people are developing new ways of working and buildings can be very adaptable.
“We mustn’t let ambitious smaller business owners hit a glass ceiling in their development purely because there aren’t suitable premises available for them.”
ehB Reeves was formed in 2018 by a merger between Leamington-based companies ehB Commercial and Reeves and Partners.
The firm enjoys a growing management portfolio in excess of £100 million and was ranked as the UK’s best-performing company for disposing of the highest percentage of its property portfolio in the NovaLoca Disposals Report 2020.