Pre-lets in prospect for South Coast industrial units – Lambert Smith Hampton
Lambert Smith Hampton’s team covering the market for industrial property and logistics property for sale and to let on the South Coast has been considering the prospects for this year. Director Adrian Whitfield says there was a fall in transaction numbers last year, compared with 2010, especially for industrial units above 20,000 sq ft, as a result of limited availability of quality buildings in the area.
Industrial occupiers on the South Coast are still cautious, the firm says, particularly if they need bank debt in order to proceed with expansion plans. “Much of the discussion for 2012 will focus on the lack of larger, quality units along the M27 corridor and a steady level of demand across all size ranges,” it adds.
Lambert Smith Hampton expects some occupiers to go down the design-and-build route as a result, and says pre-lets may also be agreed this year. Design-and-build lettings may be particularly in focus for industrial units of more than 30,000 sq ft and where occupiers require bespoke facilities, adds director Jerry Vigus. “Hargreaves Holdings, which owns five acres at Hamilton Business Park in Hedge End, is already in detailed discussions with two occupiers showing interest in design and build opportunities between 35,000 sq ft and 75,000 sq ft,” he adds.
Mr. Whitfield notes: “Already this year GeoPost has signed a 36,580 sq ft pre-let agreement at Hamilton Business Park. The 12-acre site at Voyager Park South in Portsmouth is another prime target, having existing B1, B2, B8 planning consent. Furthermore, Canmoor Developments and Cordea Savills’ site in Southampton, Endeavour Park, will provide 15.2 acres capable of accommodating up to 170,000 sq ft on a design and build basis close to the city, docks and the M271/M27.” Also being marketed is F&C REIT Asset Management’s vacant 86,000 sq ft unit at Stoke Park in Eastleigh.
LSH says industrial units in Portsmouth and Havant are expected to attract interest from logistics companies and ferry-bound import operators, now that the A3 Hindhead tunnel has reduced the drive time between these locations and the M25.
The firm expects headline rents to remain at current levels, but has noted that even a small rise in take-up will put pressure on the stock of available industrial units to let, and will lead to a reduction in tenants’ incentives.
“With discussions ongoing from 2011 into 2012, transactions are likely in the early part of this year at Segro’s Merlin Park in Portsmouth, which has outline planning consent for 85,000 sq ft. Likewise at its Voyager Park scheme, which is the only site along the M27 corridor currently capable of accommodating a single unit over 200,000 sq ft,” Mr. Vigus adds.
