Marc Ballard discusses the challenge of warehouse stock drying up across Derbyshire and Nottinghamshire.
The great news is that economic growth in manufacturing and distribution sectors has bucked the trend of the overall economy. This has resulted in good take up of industrial and warehouse stock over the past couple of years across Nottinghamshire and Derbyshire. With local businesses expanding, the bad news for occupiers is that the availability of new and good quality stock is now extremely low.
It's apparent that East Midlands companies with growth plans looking for warehousing or larger premises are now beginning to experience a very limited choice of build stock. My fear is these companies will start looking further afield for new industrial space. We don't want to lose talented firms to the likes of the West Midlands or Yorkshire - just because we have a shortage of stock.
What I would say is that companies which have requirements now - or think they may have in the near future - should act quickly before commercial availability becomes critically low or indeed to allow adequate time to identify design and build opportunities.
Already this year, Salloway has carried out a number of transactions for companies seeking industrial space. One example, is Granger's - the Alfreton-based manufacturer of waterproofing and cleaning products including Cherry Blossom shoe polish, which snapped up a 13,000 sq.ft warehouse building in Alfreton. The company wanted a warehouse close to its main site and Salloway were able to assist them with the perfect short time solution. Longer term we are developing a strategy to satisfy the future needs of the business which would seem to indicate a Design and Build solution. We are seeing a lot more instances like this - particularly in distribution.
Indeed a further example is the recent sale of Unit 11 Victory Park in Derby, a high quality modern unit of 28,000 sq.ft which was only on the market for 6 weeks before a sale being agreed at good values for the vendor.
As supply tightens, I predict that developers will become more inclined to consider speculative development in the coming months, and on the back of improving values and continued growth in manufacturing and distribution we could even see a return to modest speculative development in early 2012.