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King Sturge

MANUFACTURING SLOWDOWN HITS INDUSTRIAL PROPERTY MARKET – BUT SUPERMARKET GIANTS REMAIN ACTIVE

The general state of the economy and a continued decline in traditional manufacturing activity is being reflected in falling take-up, falling rents and capital values and an increase in the supply of industrial buildings in the West – although there are some “bright spots” in the market, according to a sector expert.
 
Paul Baker, partner in the industrial agency team at King Sturge in Bristol, told the firm‘s annual media briefing that while the supply of industrial buildings in the region was up, take-up, rents and capital values had all fallen.
 
“However there are some bright spots, particularly the new 120,000 sq ft bakery opened by Warburtons at Severnside and, following GKN‘s acquisition of part of the Airbus business, the company is fitting out two new buildings, also at Severnside,” he said.
 
“GKN Airbus‘ acquisition of these two units represents the largest industrial speculative letting we have ever seen in the area, at just over 320,000 sq ft.”
 
Mr Baker said the supply of new speculative industrial development in and around the city has just dried up as a result of a combination of market uncertainty, the ‘empty rates‘ legislation, limited land supply and the lack of bank funding.
 
“In addition the ‘green agenda‘ remains at the forefront, with the likes of Sita, Cyclomax, New Earth Solutions and Viridor acquiring land to invest in new facilities to process and recycle the 1.7 to 2 million tonnes of waste that it is estimated is produced by people living in Bristol, South Gloucestershire, BANES and North Somerset.”
 
On the positive side, Paul Baker said the likes of Tesco, Asda and the Co-Op have all been acquiring or searching for land in the Avonmouth/Severnside area to build regional distribution centres of 400,000 to 500,000 sq ft.
 
He added: “With the proposal for a deep sea container port at Avonmouth, do these proposed acquisitions suggest a degree of forward thinking on the part of the supermarket groups? If the planning application is successful and a container terminal is built there, the area would become a very attractive location for container traffic.”
 
ENDS               27th January 2010
 
For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk
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