Developers are preparing a rash of speculative “Big Hut” schemes across the North West with some experts predicting as much one-million square feet being unveiled before Christmas.
The latest warehouse and logistics boom — at half-a-dozen sites across Greater Manchester and Cheshire — is being credited to a sharp rise in available funding from the UK and overseas. Investors are now more willing to forward-fund the construction of new warehouses, rather than waiting and allowing rival bidders to swoop in and buy completed premises.
“The big funds cannot find warehouses to buy anymore,” commented CBRE’s Paul Cook. “They have now all gone and these forward-funding deals will now start to yield developments all over the North West and beyond.
“There is so little new warehousing available that occupiers now have to go to locations some way off pitch to find new premises,” added the property consultants Manchester director.
Cook predicts work on the first new warehouse will start early next year and be ready for occupation by the summer, with Manchester’s Barwood Developments (North) almost certainly among the first to confirm a speculative project.
It is known to be finalising plans for two sites totalling 375,000 sq ft — a 200,000 sq ft development at Knowsley and a 175,000 sq ft warehouse at Wigan — and will decide before Christmas whether to go ahead with both.
“We are contemplating both the Wigan and Knowsley development,” confirmed managing director Andrew Dickman. “Logistics managers want certainty on when they can get into a building, and that means building it and getting the site up and operating fast.”
There are four other logistics-based projects under preparation, excluding Barwood’s announcement earlier this month of a 16-acre joint venture Merseyside hub with logistics company Potter, and which local agents estimate will combine to top the one-million square foot mark.
Speculation is already rising that British Airways Pension Fund is about to sign a finance deal on a 190,000 sq ft warehouse at Chorley, Lancashire. Another potential project, so far with an unknown backer, is for a 210,000 sq ft warehouse at a Kingsway estate in Rochdale.
“There are as many as 15 or 16 sites being talked up as potential speculative warehouse starts, but I don’t expect more than five or six of them to get the go ahead,” said Cook.
“These investors and fund managers want to get deals signed before Christmas if they can. They are in a hurry.”
