With the news that the tolls across the two River Severn crossings are to be abolished by the end of 2018, leading property adviser GVA gives its thoughts on the implications for the industrial property market from both sides of the Severn.
Tom Merrifield, Director in the GVA Cardiff office Agency team says,
“The removal of the tolls will be of significant benefit to the further development of the South Wales economy, reducing costs to businesses and travel times, and helping attract more investment into the region. Used by more than 25 million vehicles every year, the tolls on the Second Severn Crossing and the Severn Bridge have been widely seen as a deterrent to business. This news provides a huge boost.
“By removing the burden of the additional costs South Wales becomes a more attractive location where businesses can benefit from lower overheads without facing the extra cost. Rentals in the region are competitive and with a good availability of a suitably skilled workforce we anticipate business will now consider the region as more attractive. The removal of the tolls also serves as an incentive for those businesses established in the region to not only maintain their presence, but seek to grow and strengthen.”
He continues:
“Moving forward, we now need to see significant and swift progress on the resolution of the Bryn Glas tunnel bottleneck which has been a further barrier in attracting investment into the region and supporting the growth of the economy.”
Cars currently pay a toll of £6.70 to enter Wales from the South West, and £20 for lorries, these charges often described as a tax on Wales.
According to Welsh Secretary, Alun Cairns, the move will boost the economy of South Wales by around £100m a year, when the bridges fall into public ownership.
Byron Hammond, Senior Surveyor within the industrial agency team at GVA’s Bristol office observes,
“We’ve had a fantastic couple of years’ development in Avonmouth, with logistics occupiers such as The Range, Farmfoods, DHL, Lidl, Davies Turner, and Chep UK choosing the location for distribution hubs. The removal of the toll, together with the future new motorway junction off the M49, opens up a wider labour force for these and other new occupiers.
“Avonmouth has continued potential to act as a transport hub for Welsh companies due to its excellent connections to both the M5 north and south, as well as the M4 going east and west. With its flat topography, making for easy development of larger warehouses, the advantages of Avonmouth and Severnside will be opened up to companies who might otherwise have selected a location on the other side of the bridge. Furthermore those companies who currently run two sites may consider opting to benefit from the removal of the cost barrier by running just one Avonmouth centre.
“We do expect relocation of some Welsh businesses looking for new stock, into the Bristol market due to a greater amount of speculative development having been undertaken over the last couple of years compared to more limited stock in Wales.
“However, the removal of the tolls has to be seen as a positive from whichever side of the bridge you sit on – the business economy is the winner.”