Developing nicely

July 07, 2014 by Kirsty Adams
  • Share on LinkedIn
  • SHD Logistics News RSS
  • Email this page

The 7th July is going to be a big day for East Midlands logistics. Sometime on or before the 7th, Communities Secretary Eric Pickles is due to make his final decision about DIRFT III, the third phase of the Daventry International Railfreight Terminal, writes David Thame.

The DIRFT III proposal for 7.8m sq ft of extra warehouse floorspace close to junction 18 of the M1 motorway at Daventry is expected to win approval. The Planning Inspectorate issued a report of recommendation to the Secretary of State on 7th April 2014, and although nobody knows exactly what’s in it, the feeling is that Prologis, who promoted the plan, succeeded in ticking all the relevant boxes. “We anticipate a favourable outcome,” Prologis says, modestly.

If all goes as expected, the rail-freight-related scheme will be welcoming the first of its potential 32 trains a day soon, especially if Prologis decides to launch a modest speculative development.

Prologis’ cheers are likely to drown out the sighs coming from rival developer Roxhill, whose plans for the 6m sq ft East Midlands Gateway logistics site at Kegworth are still some way from approval.

An application was due to be submitted to the government’s Planning Inspectorate in the first half of this year. Once the application is in, progress will be brisk – but they haven’t yet got to first base and the scant recent paperwork logged on the Planning Inspectorate’s website suggests the pre-application stage isn’t moving on greased rails.

SPECULATIVE DEVELOPMENT
The East Midlands’ two mega-schemes edge forward as the rate of speculative warehouse development begins to accelerate.

Last summer Prologis announced it was to launch a 310,000 sq ft speculative scheme at Phase II of Prologis Park Dunstable, close to Junction 11 of the M1 motorway. The US-owned developer has detailed planning permission for two units on its 32-acre Boscombe Road site.

Earlier this spring, Prologis revealed a third speculative shed development, this time in Northampton. The plan is to build 340,000 sq ft on a 19-acre site at Grange Park, Northampton, close to junction 15 of the M1.

Prologis hints that, for now, that’s enough speculative floorspace, but according to surveyor Savills, other big shed developers have board approval to risk speculative starts on a number of their Golden Triangle sites.

Goodman, the Australian-owned logistics developer, is well worth watching. It has an 8-acre site at Hinkley Commercial Park, Derbyshire which could make a tempting 170,000 sq ft speculative unit. Meanwhile Goodman is testing the market by offering a 1m sq ft unit in Daventry. The so-called Bigfoot unit at the Royal Oak Distribution Centre was once occupied by Tesco.

Surging take-up figures -– and a sharp drop in the supply of larger warehouses – will have encouraged them. Data from JLL shows that take-up of larger units above 100,000 sq ft rose to 5.4m sq ft in 2013, double the figure for 2012.
The supply of existing units is shrinking fast: units over 100,000 sq ft total around 8m sq ft, but a large chunk of this is likely to be unsuitable for modern warehousing. And with 1m sq ft units like Bigfoot adding to the total, the 8m sq ft figure need not represent many individual buildings.
 
James Keeton, associate director at JLL in Nottingham, says: “The supply of second-hand warehouse floorspace has continued to reduce, and with very little speculative development, this is expected to continue with a considerable shortage of Grade A space over 100,000 sq ft.

“With a good land supply throughout the region and an improving level of good quality requirements, further pre-let design and builds will be delivered in 2014.”  


What's related

Most popular this week.