Ian Harman BSc MRICS, a Director of commercial property agent Prop-Search, writes: Keen to retain its reputation as a mecca for distribution warehousing, Northampton has witnessed a growing appetite for new development. With its rapidly diminishing supply of prime stock, robust occupier demand and a strong investment market, there is now speculative development in abundance.
Having acquired a 19 acre parcel at Grange Park last year from a joint venture between British Airways Pension Fund and Evander Properties, Prologis has now built-out a 342,750 sq ft distribution centre, close to its existing other two facilities – totalling 328, 000 square feet, both of which are fully let. There are rumours that its retained agents are close to announcing a letting of the facility to a major international LA retailer.
Also at Grange Park, Goodman announced – during 2014 – its purchase of 22 acres of land at Grange Park from RBS Real Estate Asset Management. Having obtained detail planning consent, the Australian developer will shortly commence construction of two distribution facilities comprising 304,000 sq ft and 162,000 sq ft. It has named the scheme Northampton Commercial Park.
Last year also saw the completion of an 112,750 sq ft prime logistics warehouse – Brackmills 112 – on Liliput Road. Hamdon Gate took the brave decision to speculatively build this unit, at the time being the first speculatively constructed unit within the East Midlands since 2007. This unit has now also been let.
The biggest news this year in the shed market was the proposed development of a 2.67 million sq ft facility for Howdens Joinery – with an investment in the order of £250 million. The company had been working in partnership with Roxhill Developments to secure a new Northampton facility on a site adjacent to Junction 15 of the M1. However, earlier this month it withdraw its planning.
Howdens, the largest kitchen supplier in the UK currently employs around 650 people at its 1.3 million sq ft national distribution centre based on Brackmills which it will retain. It will now lease an additional warehouse in Raunds, on Roxhills’ Warth Park scheme, which is already home to major occupiers including AirWair, Robert Wiseman Dairies and Indesit.
Significant development activity in Northampton town centre has also been seen in recent months. The former Greyfriars bus station, once voted – in a poll conducted by Channel 4 television – in the Top Ten Most Ugly Buildings in the UK, has at long last been demolished. Over 2,000 individual explosive charges were used to bring down the 175m long building and clearance work will continue over the next few months as the land is prepared for redevelopment.
Visitors to the town centre are on the up with footfall figures reported to have increased by 4.9 per cent. To coincide with the opening last year of new stores for Next and Primark, Legal & General’s £5 million investment into the Grosvenor Centre is nearing completion, with the refurbishment of the malls and proposals to remodel both the Market Square and Abington Street entrances.
Shoppers on Abington Street will also shortly be able to access free Wi-Fi to complement the existing system already offered on Market Square. The move is part of the Borough Council’s regeneration strategy, which has included the launch of the ‘Love Northampton’ app for iphone users – ensuring visitors to the town can identify places to eat, events, places of interest and car parks.
Work is also well underway on a major new hotel and restaurant development within the town’s Cultural Quarter. Reef Estates is constructing a new 104 bedroom Premier Inn hotel, on the former Albion Place temporary car park, to support the demand from business people as the Enterprise Zone develops. The new hotel is scheduled to open before the end of the year.
As development in Northampton gathers momentum, it is likely that funds will start to align themselves with developers and actively pursue further opportunities in prime locations. With the lack of quality investment portfolios, speculative development presents funds with an opportunity to acquire new well specified stock and enhance their returns by sharing in the development profit. They will generally expect to receive a large proportion of the profit with the developer being incentivised to let the property quickly.
