New Road drives industrial demand

After a steady performance in 2010, the industrial market in Bedford is likely to benefit substantially from the new bypass around the town which links the M1 to the A1. “The road has become a real plus point for the town,” said Andrew Clark of Douglas Duff, ”and we hope the general expansion of manufacturing in the region will add to this positive trend.”

There has been an expansion of “demand for large industrial buildings and those suitable for trade counters. We are currently hoping to achieve the letting of a property of 12,449 sq.metres (134,000 sq.ft.).” The majority of the deals are around 1,858 sq.metres (20,000 sq.ft.) in a market which topped 69,675 metres (750,000 sq.ft.) in 2010. That is well ahead of the previous year although down on the 111,480 sq.metres (1.2 million sq.ft.) of 2009.

James Haestier of Colliers International said: “The market has been tough, but, because there has been some quality stock available, there have been deals. However, supply has dried up in the past 18 months. Now, occupiers will struggle to find a building of 18,580 sq.metres (200,000 sq.ft.) or more.”

The problem lies in the lack of speculative building which is due to the government’s empty rates legislation as well as developer caution in the face of a slow economic expansion. Even so, Bedfordshire is likely to see some sizeable schemes soon, driven by pre lets. Gazeley, with ICP Asset Management, for example, has a 32 acre site at Boscombe Road, Dunstable that could take a 69,675 sq.metres (750,000 sq.ft.) shed. Haestier says the bulk of the demand for larger sheds is coming from food and discount retailers.

An analysis by Capita Symonds highlights a resurgence of the small and medium enterprises (SMEs) in the manufacturing sector on the back of a competitive rate for the pound.“These smaller more nimble enterprises are competing on a global scale with both speedier delivery and lower costs,” it said. It notes that such companies are spread throughout the country and are not always in the strongest established industrial areas, helping rural areas and other industrial markets, a point made by Andrew Clarke of Douglas Duff for Bedfordshire.

Industrials beat offices

In Watford the market for offices is confined to the smaller sizes, while demand in the industrial sector is more broadly based. That is the experience of Peter Brown of Brasier Freeth. The agency has recently let two 929 sq.metres (10,000 sq.ft.) offices in 41-43 Clarendon Road, the type of deal that is the staple diet of the market.

Brown said: “There is more activity but the supply of Grade A offices is declining. The industrial market is more active and we have recently sold September Properties’ 5,853 sq.metres (63,000 sq.ft.) Eclipse after refurbishment which is now fully let.”

New shops in Luton and Basildon

One sign that the pressure of the recession is easing is that two major towns are likely to get major new shopping facilities. Basildon Council is pushing ahead with the big mixed use scheme in the town centre now that the Barratt/Bowden Wilson joint venture has been appointed to carry it out. This will have 51,979 sq.metres (559,520 sq.ft.) of retailing and leisure and slightly more than that for offices. There will also be 1,900 residential units together with enhanced civic facilities and infrastructure improvements.

A spokesman for the developers said: “Basildon is a good place to invest, with great potential for growth.” In Luton, British Land is expected to take over the stalled £200 million PowerCourt retail development from Ballymore, which owns around 40% of the site, the rest being with the council and the Environment Agency. The plan is expected to have 46,450 sq.metres (500,000 sq.ft.) of retailing and 200 homes.