With a severe lack of new and modern industrial/warehouse space along the South Coast, will 2012 be the year of the pre-let? Jerry Vigus, Director in the South Coast Agency team of national commercial property consultancy, Lambert Smith Hampton (LSH), looks at the prospects for pre-lets over the next 12 months.
“Over the last two years we have been highlighting our concerns that the impending shortage of modern industrial space along the South Coast is going to become a real challenge for landlords and occupiers alike. The stall in speculative development since the economic downturn, and the arrival of Empty Property Rates legislation, have collectively taken their toll, and we are now in a situation where the availability of new and modern industrial space is not there to support occupier demand.
“As we enter 2012, we are already in discussions with a number of occupiers regarding sites where our developer clients are actively targeting pre-let opportunities. Additionally, following the acquisition of the NXP site by Canmoor Developments, we have been approached by numerous occupiers with have requirements in the Southampton area for units in excess of 30,000 sq ft. This scale of such requirements can’t be satisfied by existing stock, and therefore 2012 is likely to deliver a number of pre-let deals.”
LSH’s South Coast team is actively marketing sites that are capable of offering tenants Design and Build opportunities. These include: a 40 acre site in Newbury, owned by Prologis, which has outline planning consent for 500,000 sq ft; SEGRO’s site at Voyager Park, amounting to 13 acres and which offers the opportunity to secure a single building of over 250,000 sq ft; Hargreaves’ site at Hamilton Business Park of approximately 5 acres; and SEGRO’s Merlin Park in Portsmouth, which has outline planning consent for a 85,000 sq ft unit.
“A year ago we looked ahead to 2011 with optimistic concern. It was undoubtedly a tough year for the industrial and logistics market, and the South Coast was no exception. However, the team at LSH were involved in more that half of all industrial deals completed in the region, including unit 210 on Nursling Industrial Estate for SEGRO where, within four months of coming back to the market, LSH let the space to a local distribution company. The team also completed the letting of Unit 1 Trilogy for SEGRO, amounting to 50,000 sq ft, to Contego Packaging and acquired 30,000 sq ft for Wiggle at North Harbour, Portsmouth. Additionally, despite the climate, LSH fully let Southampton Trade Park for CBRE Investors within 12 months of its acquisition of the estate.
“2012 isn’t going to be an easy ride, but the lack of quality space and the clear appetite from occupiers to expand and upgrade their business space all point towards another strong year for a volatile but recovering market. The anticipated pre-lets will be votes of confidence for the South Coast’s economy and its commercial property market.”
