Midlands

Property News Index

Read about the latest news, views and developments in the commercial property world from our industry expert.

Looking AHEAD
Making THINGS
Refurbishing AS WELL
InBrief #1
Developers RESPOND
SELL AS prices rise
PROPERTY profile
InBrief #2
SPREADING the joy
HIGHER rents
InBrief #3
Watling Street CPR

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Midlands Commercial Property News - Friday, February 10, 2017

Issue #75

Looking AHEAD

Midlands News

Having battled to overcome the problems of the recent recession and fighting its corner in the competition between regional cities, Birmingham has developed a deep rooted resilience and forward thinking economic approach.

This is being helped by positive government action in fostering development and transport improvements, notably the plans for the HS2 rail link. As such, it underpins confidence and helps developers plan new schemes.

In the case of the HS2, there is a £1.7 billion development plan for the 348 acres around the new Curzon Street railway station following a public sector injection of £1 billion into infrastructure and transport improvements.

As a result there will be 4,000 new homes and 603,850 sq.metres (6.5 million sq.ft.) of commercial space, together with a new metro link to Solihull and Birmingham International Airport, as well as a new public square.

The potential of the developments can be seen with the success of the rebuilding of New Street railway station with the building of schemes around the station. Patrick Power of Network Rail said: ”The redevelopment (bars, restaurants and a new hotel nearby) has visibly given our city a lift and we have a station everybody can be proud of”.

Regional cities also need to have a thriving technology industry and in the case of Birmingham the latest arrival is Wayra UK, part of the Telefonica Open Future, which has become a commercial partner in the Innovation Birmingham Campus’ Serendip Smart City incubator. The concept is to foster digital start-ups across the region.

The incubator is located in the iCentrum building. Gary Stewart of Wayra commented: ”Birmingham is an entrepreneurial hot spot. Not only does the city have the highest number of new starts-ups and active businesses outside London, it also boasts incredible transport links, access to talent through four leading universities, a lively entertainment and cultural scene and an insatiable appetite for business”.

A report from KWB made the following points about the Birmingham office market:  Corporate office consolidation is to continue to provide the market with large lettings;  Birmingham businesses are doing well and there is an expansion in employment;  While SMEs are doing well, they are likely to be ‘quieter’ in the market;  Fresh large office stock is coming in the city.

Proof of the business confidence in Birmingham is that Aprirose, an investment firm, has chosen it as the venue for its first residential investment in the UK with £35 million of funding for a 22 storey tower at the junction of Broad Street and Sheepcote Street. It will have 189 apartments and commercial space on the ground floor.

Making THINGS

Midlands News

Birmingham’s ambition to remain the heart of manufacturing in the UK is indicated by the speculative development of the 8,779 sq.metres (94,500 sq.ft.) Apollo Advanced Manufacturing Hub.

It will be developed close to Birmingham city centre by Trebor Developments and its investment partner Aviva, in conjunction with the city council and the Homes & Communities Agency. Savills and Cushman & Wakefield are agents.

The Hub already boasts the large engineering plants of Hydraforce and Gehring and the new scheme brings investment to over £40 million.

Council Chief Executive Mark Rogers commented: ”This demonstrates that the city has a strong economic base, including our expanding manufacturing sector”.

In a different kind of development, but also indicating confidence in the future, a civil engineering consultancy is working on a scheme for the revival of the Sparkhill swimming pool and leisure centre in Stafford Road which has been closed since 2009. Funded by the council, the centre will have swimming pools, fitness rooms, a dance studio and community room.

Refurbishing AS WELL

Midlands News

Such is the strength of demand that landlords are encouraged to refurbish industrial estates, such as CBRE Investors at the 23 unit Frankley Industrial Estate in south west Birmingham.

The refurbishment is both internal and external in the vacant units on the estate. Chris Keye of letting agent Darby Keye Property (joint with Harris Lamb) said: ”This should be welcome news to occupiers currently frustrated and, in some cases, held back by the acute shortage of good quality industrial property in the West Midlands”.

The most recent letting is to KDK Bathrooms, a specialist distributor.

InBrief #1

Midlands News

Student accommodation has been an important part of the property market in recent years helping agents, developers and builders overcome the effects of the recession.

It has also brought new life to inner cities. In Birmingham city centre Prosperity Capital Partners and London & UK Property have bought a site for a £45 million development of student housing on the former Globeworks site.

It will have 520 student rooms in the Gun Quarter in a 10 stiorey building as well as other amenities. Gavin Barry of Prosperity Partners said: ”Birmingham has a thriving higher education sector with almost 60,000 full time students but student accommodation is an undersupplied market here with a clear need for better quality facilities as well as more bed space generally”.

Developers RESPOND

Midlands News

Developers are responding to the strong market performance with new projects, such as Hodgetts Estates planning a new scheme called Core 1 at Core 42 distribution hub.

The 32,097 sq.metres (345,500 sq.ft.) warehouse and office space is in the Midlands Golden Triangle and adjacent to Birch Coppice Business Park, which has several large occupiers including UPS and Volkswagen.

In addition to Core 1, the site can accommodate development on a similar scale on five purpose built development plateaux. Edward Hodgetts said: ”Demand for large Grade A units is still very strong in prime locations such as Core 42.

This will provide a boost for the local community and bring a significant level of employment opportunities”.

While KWB notes that Birmingham Business Park takes 55% of the out-of-town office transactions, it said the low level of enquiries in the Solihull and M42 market indicates a less than average year.

Even so, there have been some significant deals, such as Clearbell letting 4,645 sq.metres (50,000 sq.ft.) in Blenheim Court, Solihull to a financial services provider.

Rob Mills of Clearbell said: ”Solihull is particularly well placed to capitalise on the strong fundamentals that make the UK an attractive place in which to invest and do business”.

At Birmingham Business Park, Quartz Investments has bought a detached 2,415 sq.metres (26,000 sq.ft.) office property from Aberdeen Asset Management. Using DBK, a consultancy firm, they will refurbish the unit to Grade A standard.

Also at the park, Vail Williams is marketing the 2,781 sq.metres (29,935 sq.ft.) 2800 The Crescent for London & Scottish Investments.

Vail Williams is also marketing the 7,246 sq.metres (78,000 sq.ft.) Cobalt Square, Hagley Road for MCR Property.

A similar vein of confidence is once again shown by Tritax Big Box REIT in providing the £56.3 million funding for the 50,509 sq.metres (543,692 sq.ft.) logistics facility at Four Ashes, Wolverhampton being built by Bericote Properties with completion expected in July 2017.

A long lease has been signed with a global designer and manufacturer of components and assemblies.

Colin Godfrey of Tritax commented: ”This is our seventh pre-let forward funded development and the third with Bericote, one of the UK’s leading developers of big box assets”.

SELL AS prices rise

Midlands News

Strong investor interest in industrial property has led Innes England to bring a key strategic site to the market.

Fulwood Park in Sutton in Ashfield, Nottinghamshire has a capacity of 19,323 sq.metres (208,000 sq.ft.).

This has been identified by Invest Ashfield & Mansfield as one of the area’s key sites. Craig Straw of Innes England is marketing the park on behalf of a private investor and said: ”This area of north Nottinghamshire is extremely attractive to businesses with its relatively low rents, rates and wages”.

Joint agent Stephen Salloway added that: ”The first phase has proven extremely popular thanks to its excellent location and the availability of a local workforce”.

At Hucknall, Muse has combined with Rolls-Royce to develop the Harrier Park on a 70 acre site which is adjacent to the aero engine makers’ existing factory. Infrastructure work has commenced.

Dan Needham of Muse commented: ”The park has huge potential to grow and will improve businesses and economic growth”.

PROPERTY profile

Midlands News

Progress Centre Walsall Road Cannock WS11 0JE Location: The property is located in a predominantly business area approximately ¼ mile south of Cannock town centre.

Description: The property consists of a 30,139 sq.ft. flexible college premises incorporating teaching rooms, workshops and welfare accommodation on a 4.15 acre site.

There is car parking space for 150 cars and surplus land suited for development for a range of uses (subject to Planning Consent).

Similarly, the building could be used for other purposes, again subject to Planning Consent. EPC: C(58) Access: The A5 trunk road and Junction T7 of the M6 toll motorway are within ½ mile of the property and central Birmingham is only 16 miles to the south east and Stafford only 9 miles north west Terms: Freehold Price: Offers in region of £2,500,000 For further details and viewings, please contact sole agent: Kingstons CPC 01543 414300 www.kingstoncpc.co.uk enquiries@kingstoncpc.co.u

InBrief #2

Midlands News

Nelson Recruitment Services have expanded their Midlands operation by taking office space within the Regus Centre, Cannock. MD Paul Nelson along with Senior Consultant Chris James both believe confidence is returning to the Midlands Business community and expect further growth in the future.

SPREADING the joy

Midlands News

What is important is that the strength of the market is spread throughout the region and encompasses all the major urban areas.

In addition there is scope for improvement in other towns. Here an example could be Gainsborough which is known to be a place for forward looking and ambitious businesses.

Eve Fawcett-Moralee of West Lindsey District Council said: ”Gainsborough is one of the Midlands’ best kept secrets. The research supplied us with a benchmark to further improve the town’s offering.

Business growth in the area is stable, but as a designated growth area with Housing Zone status this can be improved upon”.

The council, together with Lincolnshire County Council, has one major improvement plan in the pipeline; a study of the scheme to develop a 150 berth marina and 450 homes on the River Trent in Gainsborough. Fawcett-Moralee said: ”The new marina is a transformational project that would reinstate Gainsborough as a waterways destination, strengthening links to the town’s rich past as an inland port”.

In Coventry and Warwickshire, the market ”remains strong with enquiries and demand for both industrial and office property very positive”, said D&P Holt. The problem is that the paucity of new development for years means a shortage of Grade A offices.

In Nottingham, the supply picture is brighter and there have been a number of significant lettings, notably the law firm Eversheds moving to a 1,765 sq.metres (19,000 sq.ft.) office in the refurbished Water Court.

Jamie Phillips of Knight Frank, who advised Eversheds, said: ”Water Court is completely different from anything else in Nottingham and immediately stood out. It will set Eversheds apart from its competitors”.

HIGHER rents

Midlands News

The fact that industrial rents are rising in the Midlands underlines the strength of the local economy.

Now Knight Frank predicts that top rents will reach £75.32 a sq.metre (£7 a sq.ft.), which has already been breached in an off market deal.

Fuelling this is that supply of prime stock in the region is down to nine months’ supply. Even more gratifying is that take-up in the first half increased by 34%to 561,334 sq.metres (6.04 million sq.ft.).

Jon Ryan-Gill of Knight Frank said: ”More than half the take-up in the six months to June was chalked up to pre-lets and design and build, underlining the lack of suitable oven ready space. Made to measure space is more expensive and an increase in build costs by around 10% over the last year has not helped”.

CBRE said that the first half industrial take-up was a record for the region and the company’s Richard Meering added: ”The Midlands is the Mayfair of sheds. It is home to the country’s biggest warehousing units and the epicentre of the distribution network.

To put this year’s take-up in perspective, total take-up last year was 650,321 sq.metres (7 million sq.ft.) so this has been a very healthy start to the year”.

What is interesting is that East Midlands accounted for 23% of the total let in the UK, while the West Midlands comes in with 19%.

Meering added that ”over the last few years average void periods for speculatively built stock have shrunk to low levels, removing much of the risk associated with building without a pre-let”.

It means active business for agents.

Lambert Smith Hampton completing deals of more than 92,903 sq.metres (1 million sq.ft.) in the region in the first five months of the year.

InBrief #3

Midlands News

Fusion Building Consultancy has handed over a £3 million distribution and customer centre for a leading cable management manufacturer, a month ahead of schedule.

HellermannTyton is relocating from Aldridge to its new 5,853 sq.metres (63,000 sq.ft.) warehouse in Kingswood, Lakeside, Cannock, after Birmingham-based Fusion oversaw the development.

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