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Yorkshire Commercial Property News - Friday, November 11, 2016

Issue #51

Yorkshire TOPS

Transport improvements are at the heart of government plans for a stronger economy in the region.

Improved rail service to a number of cities such as Bradford and Hull as well asmore capacity into Sheffield and Leeds will come through new trains and increased scheduling.

These are key decisions for the property industry with a total of £1.2 billion committed to rail improvements.

Sir Richard Leese of the Association of Rail North Partner Authorities said: “This is another crucial move towards devolution for the North Rail”.

Air transport links are also to being expanded. Air minister Robert Goodwill said: “Carlisle, Newcastle and Bradford Leeds airports are vital engines to the northern economy, connecting the UK and creating opportunities”.

JLL’s Jeff Pearey said: “While the omission of investment in high speed connections across the north is disappointing, the increase in transport in capital spending is welcome. Increasing the capital that Transport for the North has for devolution Infrastructure is a vital part of the economic prosperity also a further step in the right direction”.

It comes at a time when the region is enjoying a strong economy and property market, as indicated by the construction figures. In the last quarter of 2015 £2.3 billion of commercial construction and refurbishment started across Yorkshire, a 123% increase on the same period of 2014.

Tony Stott of JLL said: “Beyond London and the south east, Yorkshire is seeing significant activity which is in line with our predictions”.

A further positive indicator is that take up of offices in Leeds city centre last year was the second highest on record, said the Leeds Agents Forum with a total of 63,206 sq.metres (680,100 sq.ft.), an increase of 25% on 2014.

The final quarter of the year saw a record take up, well up on the previous three months.

Robin Beagley of WSB for the agents said: “Activity has exceeded expectations and was particularly strong in the final quarter. Looking ahead with new offices at Wellington Place, Sovereign Square and Queen Street coming on stream in 2016, the outlook looks extremely positive”.

The out-of-town market has also improved with 245,911 take up last year. Nick Salkeld of Fox Lloyd Jones said: “We have seen a resurgence of the market and a new headline rent, this will strengthen the new developments planned for Thorpe Park, WROP and Kirkstall Forge”.

There has been a steady increase in the industry’s investment in the regions, reaching £44.4 billion in the past decade commercial property and in the case of Leeds it ranks third in the retailing sector.

The total for Leeds was £3.7 billion for the period, said CBRE.

In total the regions account for almost 60% of the commercial property transactions outside London and the south east. CBRE attributes this to successful civic leadership, talent in growing sector and infrastructure. The leader in attracting investment is Manchester, followed by Birmingham.

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AND IN Huddersfield

Huddersfield is also getting its share of new development with the completion of the 13 acre Park Valley Mills Phase 2 site which has already been let.

The 18 unit industrial project has been derelict for years until Holmfirth Dyers went for a new scheme.

Mike Haigh of Dove Haigh Phillips said: “This is a superb development which is already creating jobs and regenerating the area”. Also, investment is flowing into the industrial sector, such as Knight Frank selling a 3,531 sq.metres (38,000 sq.ft.) unit on the Adwalton Business Park in Drighlington for Friends Life.

Nick Prescott of Knight Frank said: “This a significant deal primarily because of a record price for a 15 year old industrial property in Yorkshire which is partly due to a lack of warehouse supply in the county”. The development is on the site of a civil battleground fought between the cavaliers and round heads in 1643.

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Bradford ALSO

Bradford has had a tough time for years but now the mood is changing as a number of property deals go through.

APAM, advised by JLL and Eddisons, has sold the 3,253 sq.metres (35,000 sq.ft.) Kingfisher House, formerly occupied by RBS, to Overland Developments. It will now be refurbished.

Sonny Sharma of Sharma Williamsons said: “There is a lack of sizeable venues within the city region that have excellent transport links and Kingfisher House will fulfil this demand”.

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InBrief #1

A joint venture between two leading Yorkshire property companies, Sterling Capitol and Marshalls CDP, has been formed to develop a prime industrial site at Capitol Park Barnsley by Junction 37 of the M1. The joint venture is planning to transform the 12.5 acre site into a quality business and logistics location, creating up to 500 jobs.

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Europort LEADS THE WAY

Wakefield is one of the most popular locations for industrial propertywith the high performing Europort leading the way.

In the latest deal, Knight Frank has bought the 26,115 sq.metres (281,000 sq.ft.) warehouse for Lancashire County Council Pension Fund for £19.1 million from IDI Gazeley. It is occupied by Bibbys Distribution.

Rebecca Farnsworth of Knight Frank said: “This is one of the most significant investment deals in West Yorkshire, this deal reinforces Wakefield’s reputation as the premier logistics and distribution destination in the region. The region is popular with investors”.

Another substantial deal is Keyland (part of Yorkshire Water) who are seeking planning permission on a 47 acre site in Wakefield for a scheme of 46,467 sq.metres (500,000 sq.ft.).

Formerly part of the Calder Vale treatment works, it is now the site of a 37 acre development, creating a new commercial hub to the east of Wakefield. Its attractions will be enhanced by the Wakefield Eastern Relief Road due to complete in 2017 and will include 2,500 homes, a primary school, heath facilities and neighbourhood centres.

It is being Marketed by Knight Frank and Bilfinger GVA with the firm’s Iain McPhail saying the mix of units within the planning application will ensure widespread opportunities to house a range of businesses”.

One large project for transforming a 110 acre site in Knottingley, Wakefield is St Pauls proposals which is being prepared for a power station to replace the Oxiris chemical works. It will now be cleaned up and the building demolished.

Ever active in its home county, Gregory has started construction of a 3,438 sq.metres (37,000 sq.ft.) warehouse development at Ossett with marketing by Bilfinger GVA and Gent Visick.

Iain McPhail of Bilfinger GVA commented: “Ossett will provide some of the first speculative warehouses in the area since 2008”.

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HIGHS FOR industrials

The industrial property market has really hit the high spots in the past few years and reached 150,800 sq.metres (1.7 million sq.ft.) for larger units in West Yorkshire.

That is 58% up on the first half year. Interestingly design and build accounted for two-fifths of the total, said Knight Frank.

KF’s Tom Lamb commented: “Of the 21 units available, only four were newgrade in prime locations, the others had been available for over two years”.

He added that developers are struggling to acquire sites with planning permission and flat land to accommodate over 46,468 sq.metres (500,000 sq.ft.).

What is impressive is that so many parts of Yorkshire have shared in this performance. For example, in Brough, East Yorkshire, the 79 acre Humber Enterprise has been launched on the market by LC Industries, a partnership of Lamina Real Estate Capital and Citivale. The Enterprise Zone park has 92,937 sq.metres (1 million sq.ft.) of industrial office space as well as 20 acres for further development. Due for completion in spring 2016 will be the newly refurbished Grade A office space being marketed as Firebrand.

Offering just over 10,000sq.ft. of high quality accommodation. Three further units named Buccaneer (4,582 sq.ft.), Bluebird (18,090 sq.ft.) and Mercury (8,070 sq.ft.) will also be available shortly.

So far £2.5 million has been spent regenerating the site, which is considered to be the top park in Humberside.

James Appleton-Metcalfe of Citivale said: “This will create a new and thriving business community with breathtaking views of the Humber”.

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Bradford BURNS BRIGHT

Precision engineering firm, Sigma Technologies, have taken a new 15 year lease on a 21,373 sq.ft. unit on the Park 26 development on the Euroway Industrial Estate in Bradford at a headline rent of £5.75 per sq.ft.

Daniel Walker from Gent Visick commented “This unit attracted a lot of attention highlighting the general scarcity of supply across the west Yorkshire

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InBrief #2

Themagnificent Grade II St Paul’s House in central Leeds, one of the most iconic office buildings in the city, has been sold for £23.7million.

Michael and Steven Elghanayan’s EPIC UK bought St Paul’s House from Boultbee Brooks Real Estate in an off-market deal, advised by the Leeds office of Knight Frank.

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BAM HAS Latitude

BAM has got planning permission for a £700 million scheme (Latitude Yellow) in Leeds.

It is on the prime Whitehall Road and will have 14,591 sq.metres (157,000 sq.ft.) plus basement car parking. Initially it is being offered by Cushman & Wakefield and BNP Paribas at a rent of £258.24 per sq.metre (£24 a sq.ft.).

One attraction is large floor plates.

BAM also has planning consent for Latitude Blue for a 10,587 sq.metres (119,000 sq.ft.) office at 5 Wellington Road.

Paul Smith of BAM said: “There is a high level of demand for quality offices We now have consent for 450,000 sq.ft. over 4 phases”.

Demand for heritage industrial space in Leeds is also strong for conversion to offices, said Eamon Fox of Knight Frank, he said: “The newest generation of workers expect their office to be inspiring and enjoyable.

Our future offices must break the mould of the past two decades”.

Fox quoted the example of Concordia Work, Sovereign Street on the banks of the River Aire: “Which is a unique and striking property over five floors close to Leeds City Station and the main retail heart of the city. It is being refurbished by Boultbee Brooks with modern businesses in mind but retaining the existing structure

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Decisive YEAR

This could turn out to be a decisive year for the Leeds commercial property market, said JLL.

The firm forecast steady economic growth (despite Brexit debate), said Jon Neale. “With low inflation and rising wages together with expanding firms helping to buoy demand Leeds is well placed to benefit”.

The growth of office employment will outperform Birmingham and Glasgow through to 2018. JLLs’ Richard Thornton said: “There is a lot of positivity in the market following last year’s exceptional level of take up. We have over 46,468 sq.metres (500,000 sq.ft.) of named requirements”.

He feels the future is bright for Leeds as occupiers continue to exhibit a desire for quality for new and refurbished space with a preference for large floor plates.

The firm also feels bullish about prospects for industrial property because of the demand for logistics space from retailers and parcel operators. This has driven demand for big box space as Yorkshire is disproportionately successful in attracting large occupiers for distribution units in comparison with the North West.

Evans of Leeds wants to keep the pace going in Leeds and has now tied up with Keyland for the creation of a new community including 1,100 homes as well as other facilities on a 170 acre site in the Aire Valley.

Skelton Gates is to the east of Junction 45 of the M1. There will be improvements to the local network and considerable work on the environment.

The Aire Valley is enjoying a renaissance with investment into the Enterprise Zone to the west of the site where work is well under way on the £95 million Temple Green scheme.

James Pitt of Evans said: “Major investment into the zone is transforming the lower Aire Valley, bringing in new businesses, transport links and jobs”.

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Sheffield IS BACK

Sheffield has returned to favour and this has stimulated new development such as St James planning a £35 million retail park on a former college site on Bochum Park.

This will be demolished and St James envisages a number of high profile firms, such as Aldi, taking space.

The company’s Paul Morris commented: “We believe there is a real need for a development like this, as people living close by have to get transport to find first class retailing elsewhere in the city”.

A milestone has been reached in Sheffield city centre with the completion of the 7,249 sq.metres (78,000 sq.ft.) 3 St Paul’s, a central part of the £130 million Heart of the City project. It is the first speculative office building in the city since the recession.

David Topham of CTP said: “St Paul’s Place is now established as a high quality office location and marks the revival of confidence in the city. Arup will be the first occupier”.

Outside the centre, a brownfield site at Vantage Park has been completed and brought praise from local MP, Clive Betts. He said: “This is exactly the type of industrial usage we want to see in this area offering crucial employment opportunities through regeneration”.

Just four units remain from the 10 built by local developer Tony Waddington and let by Knight Frank.