Pooks Commercial Property Consultants of Shrewsbury report that 2011 has seen a surprisingly steady demand for factory and warehouse property, with well-financed local companies taking advantage of break ups and dispersal sales by national or failed concerns.
With speculative development not viable, existing stock has taken up this demand, both for purchase and lease. Typical was the sale of the former Livesey’s premises at Longden Road, Shrewsbury (23,000 sq ft) which attracted considerable interest from a variety of local concerns. It was eventually sold to MaxPack at a price in excess of £500,000.
As part of the reorganisation of a property portfolio on behalf of a local private investor, Pooks sold three units at Hussey Road, Shrewsbury achieving prices of around £65 per sq ft. The Battlefield area of the town is now firmly established as the main industrial/commercial locality and a number of other units have been let including space at Archers Way and within the successful Evans Easyspace Business Centre. Older stock at Harlescott Industrial Estate has been let by Pooks at Ennerdale Road, including about 12,000 sq ft to Hoistquip Ltd.
Away from Shrewsbury, Craven Court at Craven Arms Business Park is now fully let, with the remaining land zoned for development having been sold to an expanding local company for their future development. This reflected about £100,000/acre. Similar levels have been achieved at PxP West Midlands Partnership’s development at Leominster
Enterprise Park, with further sales to local concerns for both industrial and trade counter schemes.
In Mid Wales at the Mochdre Industrial Estate, Newtown there have been a number of lettings on behalf of Goldtique GP Ltd in sizes from 750 – 11,000 sq ft. The new occupiers have comprised concerns in the plastics and motor trade support industries, rather than manufacturing or distribution concerns. A larger unit of 37,500 sq ft is currently available.
On a broader basis, the imbalance between relatively large amounts of older stock to lease in, for example, Telford, but a shortage of high quality space is likely to continue in 2012 as increased construction costs, cautious financial arrangements and historic land acquisition costs overcome static end values to inhibit development throughout the area. In effect, the market is reverting to a more historic norm, where it needed public sector investment, particularly in infrastructure and especially in the smaller towns, to encourage growth.
Charles Howell of Pooks commented “The continued availability of sites in the main industrial estates in Telford, Battlefield in Shrewsbury and at Tern Valley, Market Drayton are the primary sources of supply for future development in Shropshire. Their status as employment land appears to be secure, but in other locations calls for more land for business use may be ignored in the face of more lucrative proposals from the residential and retail development sectors.”
He added “With the beginning of a trend to revive manufacturing, it will be a challenge for the local planning authorities to bring forward and/or protect such land for this use, rather than for housing or retail development, especially when significant areas are owned by local councils themselves, who are in urgent need of cash funds for the immediate rather than long term future.”
Pooks do not see any significant increases in values for industrial property in the forthcoming year, but possible shortages of existing or suitable stock may encourage some new development in Shrewsbury in particular.