AGENTS PICK THE MOST SIGNIFICANT DEALS (SIX MONTHS TO END OF OCTOBER)
UNIT 2, BIRCH COPPICE BUSINESS PARK, J10, M42
Type of deal Leasing
Developer IM Properties
Tenant UPS
Size 152,500 sq ft
Terms £6.15 per sq ft
Chosen by Simon Lloyd, head of industrial and logistics, DTZ
This deal, which sees space being let to international parcel delivery and logistics firm UPS at the Birch Coppice Business Park, is a great example of how take-up of speculatively developed space is taking off.
Birch Coppice, near Tamworth, has seen almost 500,000 sq ft of units taken up before practical completion in the past 18 months, largely due to its location and connections – it is the largest rail-served site in the West Midlands under development – and the fact that it already houses names such as Ocado, Volkswagen Group and Euro Car Parts.
The agreed rent is also one of the highest in the region and is consistent with where I believe rental values should be. Although this rate is not currently in favour with many potential occupiers, it is very positive for investors and developers. It also proves that demand for space in the region is high, with relatively low availability.
Type of deal Warehouse leasing
Developer Prologis
Tenant Jaguar Land Rover
Size 226,760 sq ft
Rent £5.95 per sq ft
Chosen by Robert Rae, partner, North Rae Sanders
Given the renewed confidence in the distribution and industrial markets in the West Midlands, Prologis’s decision to speculatively develop what was the largest available warehouse in the region – completed in May – was without doubt justified with this notable August letting.
Jaguar Land Rover, on the back of its fast growth and the resurgence of the manufacturing sector, acquired the warehouse at £5.95 per sq ft. It will now invest £20m in specialist equipment and a customer commissioning suite, in what will be its new global hub for creating special vehicles.
I believe this deal further reinforces the success Prologis Ryton has had, with some 800,000 sq ft developed out over the last two years. There is now a shortage of available buildings in the region, with only about six months’ supply of grade A stock. This will see further speculative development, which will continue to push rents above £6 per sq ft.
Type of deal Freehold purchase
Vendor Hines/Ballymore
Purchaser M&G Real Estate
Size 319,000 sq ft office and retail scheme
Price Undisclosed
Chosen by David Smeeton, head of Birmingham office, Colliers International
The acquisition of Two Snowhill by M&G is my chosen deal because it brought together a stream of deals that have taken place there over the past six years. Back in 2008, a prelet to Wragge & Co was achieved but then, as the recession bit, work on the scheme halted. In 2011, Hines European Growth Fund was introduced to Ballymore, seeing the potential of completing a part prelet scheme in a market where no other stock was being developed.
The scheme was completed in early 2013. Wragge & Co began its fit-out, i2 Group took about 23,500 sq ft and M&G was introduced as a potential buyer of Two Snowhill.
During the course of the negotiations, HS2 Ltd expressed interest in taking the remaining 100,000 sq ft, completely validating Wragge’s, Hines’ and Ballymore’s faith in developing out the building when few others were prepared to make such a commitment to Birmingham – all of this culminating in M&G’s September purchase.
Brum take-up climbs
Birmingham Office Market Forum figures revealed Q3 take-up topped 150,000 sq ft. Among the biggest deals were Vodafone at Colmore Plaza and the Office for Legal Complaints at Quay Place.
Solihull bags Waitrose
Standard Life Investments Pooled Property Fund and Opus Developments won consent for a 28,500 sq ft Waitrose in Solihull.
Second hub for Aldi
Discounter Aldi announced plans for a second distribution hub in Tamworth, agreeing to take a six-year lease on 120,000 sq ft at Centurion 120, Centurion Park.
HS2 travels North
Birmingham secured one of the largest relocations from London in five years when Ballymore and Hines announced HS2 had signed for 100,000 sq ft at Two Snowhill.
whg homes in on Keepmoat
Housing provider whg chose Keepmoat to develop more than 400 homes as part of a £50m regeneration scheme in Walsall.
Curtain rises on Arena
The first phase of Birmingham’s Arena Central development – 140,000 sq ft of offices, likely to start early in 2015 – got the green light from planners.
Famine before the feast
Birmingham’s post-2016 pipeline for office development paints a rosy picture with 7.4m sq ft consented. In the interim, the city could face a virtual famine, with experts predicting around one year’s worth of supply is left.
