The clamour for Mid range warehouse space under 60,000 sq ft across the East Midlands is at an all time high because of demand from growing regional firms that simply have nowhere to go.
Prime space is being snapped up across the East Midlands leaving latent demand and expanding firms wondering where they can go next. The lack of new builds is placing increased demand on existing units.
“There is very little available for warehouse space between 20,000 sq ft and 60,000 sq ft,” says Sunny Landa from NG Chartered Surveyors. “East Midland firms are experiencing a very limited choice of stock of the right size and in the right location for their needs.
“The problem boils down to no new starts in the mid-size range entering the market,” explained Sunny. “Not enough developers are building the units needed. We’ve seen lots of smaller second hand shed stock below the 20,000 sq ft figure around Nottingham, Mansfield, Sutton Ashfield and Derbyshire. But in-between 20,000 sq ft and 60,000 sq ft mark there is little quality around resulting in such demand from competing regional firms.
Ian Muxlow, from Savills, said: “The existing pool is shrinking and we are left with poorer quality buildings. Companies need storage solutions immediately – many don’t want to or can’t afford to wait a year for the developers to start building again.
“But it is a catch-twenty-two situation. If firms find the right warehouse location, often the property is not suitable for their needs. But location is key for successful storage. We are finding that many firms are willing to strip down and rebuild existing sites to make them match their exact specification. This is a strong sign that companies are willing to go the extra mile to get suitable mid-size shed buildings.”
“At the moment there are no speculative builds in the pipeline,” said Sunny. “Developers are not building because there is no incentive to do so when empty rates liability remains so off putting. Plus, the banks are not lending. When we talk to developers they say they are sitting tight and holding on until things change. But until then we have a bottle neck. Inevitably when the general consensus is better times are back all the developers will all build the same thing at the same time and the market returns to over supply. Its really a case of whoever builds now will reap the rewards.
“NG receives lots of enquiries for medium size units across the East Midlands, but the choice is still limited. As a result landlords are starting to be more aggressive in their terms.”
A recent deal brokered by Sunny and Ian supports this. NG working on behalf of a landlord, secured a lease on a 25,000 sq ft unit on the Apollo Industrial Park, Nottingham, to Crafttime Ltd,
Stuart Bestwick Group Managing Director at Craftime said: “We had been looking for a suitable unit for over two months until we found this one in the Apollo Industrial Park. The move was part of an expansion and relocation strategy for the firm. We needed to upsize our capacity to keep ahead of the growing demand. We have a constant stream of new products entering the market and we needed the extra space in our operations centre to meet our customer demands.
“The move allowed all our operations to be located under one roof, previously we were trading out of three units in Sherwood Park and Newstead Village. The move will undoubtedly improve our efficiency.”
