Industrial units, or ’sheds’ as they are affectionately referred to by those in the industry, are often branded with remarks such as ‘boring, four crinkly tin walls with a roof and little difference between them’, writes Luke Tillison, senior surveyor in the industrial department at Lambert Smith Hampton.
At Lambert Smith Hampton, we could not disagree more. In fact, our industrial team enjoy working with ‘sheds’ so much in Milton Keynes that we have succeeded in letting and selling more than 1.0 million square feet of them within the last 12 months!
This has given us the prestigious award of Most Active Agent in Buckinghamshire by the Estates Gazette.
Substantial sales and lettings have included the Former Alps Building in Wymbush (155,685 sq ft) and further lettings at Dawson Road (108,000 sq-ft) and the Autoliv building in Kingston (60,154 sq ft).
But it is not all about the big stuff… Our totals include some 90 individual transactions of small and medium stock and more specifically 28 transactions between 3,000 and 8,000 sq ft.
However, that is not to say that the economic climate has made it easy. At the peak of the market around 2007 it was not uncommon for rents to range between £5.00 and £9.00 per sq-ft. Compare this to now with rents having settled between £3.50 and £6.00 per sq-ft.
Landlords willing to make these reductions have made way for an influx of savvy tenants eager to secure great rental deals before the market improves – and with a limited supply of new warehouse stock, the emphasis on securing a deal is even greater.
One local business LSH recently helped to relocate have reportedly secured a 33 per cent reduction of overhead costs.
Availability within Milton Keynes over the past two years was never something that agents needed to worry about.
Vast quantities of the Milton Keynes mid 80s stock has been available with the left overs of pre-recession new builds being offered out at competitive rates. Things have changed though. Over the past nine months due to our success we are now in a position where stock levels are reducing, and within six months we could potentially be at the other end of the spectrum suffering from a lack of stock within the market place particularly in certain size ranges.
The market is especially suffering from a lack of quality A grade industrial space within Milton Keynes between 3,000-10,000 sq-ft.
As a direct result of this LSH have let six units in the modern Chancery Gate scheme within Denbigh West in the last nine months.
This now takes the scheme up to 75 per cent let. Once this has been depleted there will be very little availability left of this size and type of property.
There is however, light at the end of the tunnel, with developers slowly and cautiously re-entering Milton Keynes.
With LSH offering two Design and Build sites to the market including the former Alps site in Wymbush of up to 200,000 sq-ft and an opportunity to acquire a design and build within Mount farm of up to 66,000 sq-ft.
For reasons of confidence and particularly finance, speculative development is unlikely to occur in the foreseeable future but the death of grade A stock bodes well for developers taking positions on well located sites where they can deliver ‘D & B’ solutions.
With developers becoming more confident and returning to Milton Keynes, perhaps an influx of fresh new buildings and higher rental levels are on the horizon. Only time will tell, but everything would appear to point that way.