A combination of diminishing supply, robust occupier demand and a strong investment market has led to a growing appetite for speculative distribution warehouse development in Northampton. And its arrival will ensure the town retains its ‘Mecca status’ in the sector says Prop-Search Director Ian Harman (pictured below).
The gathering momentum has seen a number of schemes either completed or in the pipeline, as developers seize the opportunity to capitalise on the improved market conditions and Northampton’s reputation as a key logistics hub.
Harman cites a number of examples of speculative schemes which are now coming to fruition, beginning with Grange Park, where Prologis has completed a 342,750 sq ft distribution centre.
Having purchased the 19 acre site from a joint venture partnership between British Airways Pension Fund and Evander Properties last year, Prologis embarked on the development of the scheme close to its two existing facilities totalling 328,000 sq ft, which are both fully let. And it is believed that agents may be close to announcing the letting of the new property to a major international retailer.
Also at Grange Park, Australian developer Goodman is about to commence the construction of two distribution facilities on 22 acres of land acquired from RBS Real Estate Asset Management. The scheme, which has been named Northampton Commercial Park (pictured below), will deliver a total of 366,000 sq ft of warehouse space to the market.
The biggest news of the year in the sector was the proposed 2.77 million sq ft big shed development being undertaken by Roxhill Developments on behalf of Howden’s Joinery.
However, the company has withdrawn its application and now plans lease a facility on Roxhill’s Warth Park scheme instead. Howden’s also plans to retain its 1.3 million s q ft national distribution centre at Brackmills.
Also of significance is the news that the 112,750 sq ft prime logistics warehouse Brackmills 112 has now been let, following its completion last year. When Hamdon Gate took the decision to embark on the scheme it was the first speculative constructed unit in the East Midlands since 2007, and its letting is clearly indicative of the turnaround in the market.
Harmen is also keen to draw attention to the development activity in Northampton town centre, which includes the demolition of the former Greyfriars bus station – once voted among the Top Ten Most Ugly Buildings in the UK, in a poll conducted by Channel 4 Television.
Over 2,000 individual explosive charges were used to bring down the 175 metre long building and clearance work will continue over the next few months to prepare the site for redevelopment.
The town centre has also seen the opening of new stores from Next and Primark to coincide with Legal & General’s £5 million investment into the Grosvenor Centre which is nearing completion.
Work is also underway on a major new hotel and restaurant development within the town’s Cultural Quarter which is scheduled to open before the end of the year. The Reef Estates scheme, on the site of a former car park, is in response to the expected business demand as the Enterprise Zone develops.
Together, these improvements have contributed to a 4.9 per cent rise in footfall in the town centre where the Borough Council’s regeneration strategy includes the launch of the ‘Love Northampton’ iphone app and the upcoming provision of free wi-fi on Abington Street to complement that already available on Market Square.
“As development in Northampton gathers momentum, it is likely that funds will start to align themselves with developers and actively pursue further opportunities in prime locations,” Harmen concludes.
“With the lack of quality investment portfolios, speculative development presents funds with an opportunity to acquire new well specified stock and enhance their returns by sharing in the development profit.
“They will generally expect to receive a large proportion of the profit with the developer being incentivised to let the property quickly.”
