For a significant time now the commercial and industrial property market has reported concern over the lack of good quality commercial/industrial building supply coming to the market following virtually no speculative development in the last 4 or 5 years due to economic conditions. 2012 saw a series of commercial property deals at Bulleys which demonstrates the take up of existing stock and intensifies the point on shortage of new existing stock. Amongst these deals are the take up of Hayes Park in Lye, a new unit of 60,000 sq.ft., which Bulleys let to Toolbank, who were desperate to take the building, having lost out to another company on a building in Birmingham. They have leased the building for a period of 10 years at a rental of £5.00 per sq.ft. Another deal at a scheme overlooking junction 1 of the M54, Vernon Park, involved German industrial filter company, Mann and Hummel, taking the last remaining existing unit there which amounted to 55,000 sq.ft., also at a rent based on £5.00 per sq.ft. on a 12 year lease. In addition, having marketed Unit 8 Britannia Park known as Britannia Point in Wednesbury for only 4 months, the 56,000 sq.ft. unit was successfully let to a major E-retailer on a 5 year lease after fierce competition from 2 other parties. Bulleys have also been instrumental in putting together an off market deal on Rosehill Business Park in Willenhall, where they have put vendor and purchaser together in a deal on premises of over 60,000 sq.ft on a site of 3.5 acres where Middleton Developments have purchased the site which has taken a further similar size premises out of the market. These are just a few selected property deals which have occurred during 2012, which demonstrates that the good quality stock on the market is attracting demand and, in certain situations, competition is healthy due to the limited amount of stock.
As a result of the above, Bulleys are pleased to report that new build activity has returned to the market where available existing premises cannot be found. Design and build solutions where purpose built facilities are procured for occupiers are happening and further such solutions are looking more likely in the future. The flagship development, i54 overlooking the M54 motorway close to junction 2 is a perfect example of this. Bulleys report their first deal here involved the construction of approximately 200,000 sq.ft. for the headquarters manufacturing facility of Aerospace company, Moog. The building was constructed on a site of approximately 11 acres. This initial investment on i54 was significant for Wolverhampton and South Staffordshire, in that the quality of the i54 site appealed to the American parent company, allowing the development to go ahead in the face of competition from other parts of the UK and even abroad. After this successful start, i54 attracted an international food testing company, Eurofins, who have now constructed their 50,000 sq.ft. facility which incorporates an area for expansion. These 2 deals acted as a catalyst to bring forward the profile of i54 as a premier location. This has ultimately culminated in the successful negotiation for Jaguar Land Rover to select the site for their new engine manufacturing plant upon which they are currently constructing an approximately 750,000 sq.ft. facility which is a huge boost for the area and further afield. All this activity on i54 has enabled it, with its connection to a new dedicated motorway junction onto the M54 to be completed during 2014, to be a nationally, if not, internationally recognised site. Of the existing i54 development, there only remains approximately 30 acres for new development and strong interest is reported to have already been shown.
Another site where Bulleys report activity has been bought forward after some time of dormancy is Castlegate Business Park in Dudley. Castlegate Business Park is a 47 acre development which incorporates headquarters office buildings, a cinema, a hotel, a bowling alley, a pub and series of other restaurants. 8 acres of development land remained available and, during the last part of 2012, it was announced that a further hotel would be developed where Premier Inn are constructing a 63 bedroomed hotel, which will complement the other facilities on the site. This new development has acted as a catalyst to further activity. Bulleys have just announced that the Home Office are to build a 10,000 sq.ft. office facility which, in the face of a shortage in office demand in recent years, is hopefully a sign that other developments will follow.
This account of new build development during 2012 is not only good news for the property market itself but also for other sectors such as the construction industry, who welcome such developments as a badly needed boost to their sector.
For further information contact Noel Muscutt, Partner at Bulleys Chartered Surveyors on 01902 713333.