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From Zero to Hero: The sudden rise of the A14 shed market

Developers are racing to deliver the eastern promise of the A14 corridor, but keeping up with demand for new warehouses is stretching them to the limits. David Thame reports. 

Until very recently, East Anglia was a place goods travelled through. On the whole, they didn’t stop unless it was at traffic jams or coke points on the A14. 

The result was that the region had few warehouses, those which were there were tended to be small and development sites were like hens teeth. The mood was move along, nothing to see here. 

Then two things happened. The A14 got better and the Golden Triangle locations got very expensive, with high rents and high labour costs. 

The result has been a sudden surge in demand for East Anglian warehousing, a terrific uplift in rents and a shed development business that literally cannot keep up with demand. 

It has also meant land prices shooting through the roof – and that brings with it some potential headaches for later. 

So where is the East Anglian warehouse scene today? 

Phil Dennis is Chelmsford-based industrial property director at Savills, and one of the keenest observers of the coast-to-Golden-Triangle shed scene. 

“The eastern warehouse market started from a lower base than the other regions. Quite simply, there was no stock in the first place. So when demand started to rise sharply in 2019 developers had to jump straight into action. The result is that we now have about 9 million sq ft in the development pipeline, and in ordinary times that would account for several years supply,” Dennis explains. 

That 9 million sq ft figure might look a bit over-the-top. Remember, regional take up has never yet topped 3 million sq ft a year (see side panel). In fact, the headline number slightly over-stated the extent of new development because around 2 million sq ft (out of 9 million) has already been developed, or pre-sold, or was built-to-suit anyway. 

One of the key sites to watch is the 156-acre Gateway 14 site at Stowmarket. During August, planning permission was granted for up to 2.36 million sq ft of build-to-suit and speculative warehousing on the council-owned site close to junction 50 of the A14. Developers, Jaynic, will be appointing contractors to go on site in the coming months to construct the estate road infrastructure, services and landscaping. It could be delivering buildings by the second quarter of 2022. 

The name is similar, but the location is further down the A14 at Ipswich’s Eastern Gateway site. Close to junction 54 this plot could accommodate 1 million sq ft, and enjoys enterprise zone status. 

Further along, at junction 56, the promoters have (wisely) decided against calling it “Gateway” and instead opted for the direct simplicity of “Junction 56.” Developers, Pigeon, have around 200,000 sq ft in mind, perhaps in four units, perhaps in one, depending on demand. 

Don’t forget Port One on the outskirts of Ipswich which offers 1.8 million sq ft. This site, like Gateway 14, is part of the region’s Freeport (see sidepanel). Big deals are rumoured to be pending. 

“There’s probably only five or six sites accounting for most of the East Anglian supply pipeline. And most of it will come forward as pre-lets or built-to-suit,” says Dennis, who explains that the route to speculative development is surprisingly complex. 

Thanks to surging demand, and the bottlenecks in supply provided by the planning system, speculative development is a lot less prevalent than you might suppose. “Everyone is now waiting to see who opts to build speculatively,” Dennis explains. The smart money is on a toe-in-the-water at Eastern Gateway (maybe 50,000 sq ft), and perhaps something similar at Port One, and perhaps something bolder at Gateway 14, where appraisals suggest a 100-200,000 sq ft speculative unit could make sense. 

“It is not so much that developers do not want to risk speculative development, or do not need to risk it, but that the market is moving quicker than their decision-making on whether to spec or not,” says Dennis.  The moment word gets out that developers are pondering a speculative start, a queue of potential occupiers forms: usually one of them signs a pre-let long before a speculative start begins. This pattern is playing out on units large and small – some of those intended as speculative units, but pre-let, are as large as 300,000 sq ft. 

The result is almost no speculative development in East Anglia. With some sites still needing infrastructure, the list of potential speculative wins is small. 

The tight market has had a swift and predictable effect on rents. Rents on larger units (100,000 sq ft) have surged from £6.25 a sq ft up to £7 a sq ft, and for smaller units the benchmark is now £8.50 a sq ft. There’s excited talk of a £9.25 a sq ft rent in Ipswich, which is music to the ears of landlords and will certainly encourage developers. Premium pricing is a new phenomenon in East Anglia, and one to watch. 

Developers share the sense of a market acceleration leading to pre-lets and pre-sales, and nixing hopes of speculative starts. 

Greg Dalton is project development manager at Trebor with responsibility for East Anglia. 

“As soon as you get on site, there’s a queue of potential occupiers. We always prepare for, and intend to do, speculative development – that is normally our intention – but in the last 6-9 months we’ve found that by the time we’ve got planning permission, an occupier has come along who wants it, or wants the site with something slightly different on it. And that puts an end to speculative development.” 

Developers like Trebor are doing their sums because rising land prices and construction costs inevitably mean higher rents. “We’ve got sites where we used to assume mid-box rents of £7 a sq ft before the pandemic, and now its £9 a sq ft – rental growth is very real,” says Dalton. 

So far, the feeling is that occupiers are swallowing the rising rents. Rents on existing units near Cambridge have risen from £5.50 a sq ft to above £8 a sq ft, without apparently causing occupiers to leave or move elsewhere.  

“Occupiers know East Anglia is still low rented compared to the Golden Triangle, or the huge growth in rents there has been along the M1, M6 or M40 corridors. They can now turn to the A14 corridor which, after the upgrade, is great. The result, though, is that in East Anglia we have a heady mix of decent demand and a lack of stock. And for the next two or three years than is not likely to change,” says Dalton.  

The outlook for the market is continual rental growth backed by continued sluggish supply. Savills estimate overall rents (e.g. properties of all ages and types) keeping up a steady 3% annual rise. In some locations, this will be complicated by other factors – the most prominent being the new Freeport and evolving supply chain strategies. 

“The Freeport is a really big change. It will make 2022 different from 2021 because it is already generating enquiries which have ramped up. And they are real enquiries,” says Savills’ Phil Dennis. 

Simultaneously, distributors continue to re-think their focus on the Golden Triangle. So long as they think cheaper locations like East Anglia can work whilst satisfying their labour force needs, they will continue to look east.


Why there’s a problem 

Take-up in the East Anglia shed market has recently been about as stable as the seaside weather at Clacton. 

Figures from Savills show a market with violent mood swings and huge variations in the number of deals completed. 

Take-up varies from a low point of 480,000 sq ft in 2018 to a high of 2.7 million sq ft in 2020. That steep growth curve – explained by improvements in the A14 trunk road, and by the pandemic – has caused massive problems. 

Why? Because whilst demand has moved dramatically – deal volumes are up by 500% or more since 2018 – the supply of warehousing hasn’t shifted much, or at all. Savills data shows total supply oscillating around 1 million sq ft.   

The figure only shifts above 1 million sq ft when developers get busy, and apart from 2020, on the whole they haven’t gotten busy. Total speculative new built is normally around 300,000 sq ft and in many quarters the volume of speculative floorspace reaching the market is zero. 

The result is a market under extraordinary pressure. 


Freeport East is one of eight new Freeports in England announced by the Chancellor of the Exchequer on 3 March 2021. It will be a hub for global trade and national regeneration as well as creating a hotbed for innovation that will have impact across the UK, or so its promoters promise. 

In truth there is not one Freeport East, but several: Harwich and Felixstowe joined with the Gateway 14 site. There are also four customs sites stretching from the Colchester outskirts. 

Gateway 14 at Stowmarket is the largest, with 2.36 million sq ft of development potential. Gateway 14 bridges the gap between the Midlands and one of Europe’s largest and busiest container ports at Felixstowe and is the country’s primary route for export to European and global markets, opening gateways to business. 

The development is being promoted by Gateway 14 Ltd (wholly owned by Mid Suffolk District Council) and Jaynic, which has a strong track record of implementing infrastructure and delivering high quality business and logistics parks on a speculative and bespoke basis in the East Anglian region. 

Freeport East has stated that its ambition is to create manufacturing, green energy and innovation hubs that capitalise on the unique qualities of the Eastern Region and will become an important part of the region’s post-Covid recovery. 

Nic Rumsey, managing director of Jaynic, says: “The confirmation of Freeport East as one the UK’s first Freeport sites is very welcome news for Gateway 14. The opportunities that the Freeport status will bring to Gateway 14 and the wider region will help us deliver our ambitions to encourage innovation, attract investment and support business growth.” 

Agents for the scheme are Savills and Avison Young. 

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