Marks & Spencer has pulled out of a 220,000 sq ft industrial letting at Daventry International Rail Freight Terminal.
The retailer had been under offer at the Warner Estate shed at £5.50 per sq ft since July. It wanted to create a distribution centre for its internet shopping business.
It had only planned to take the unit for five years, however, before relocating to a larger building.
But senior management have vetoed the Northamptonshire deal, saying the fit-out costs would be too high.
“The cost of fitting out the warehouse was too great given the fact it was only taking it for five years,” a source said. “It had planned three levels of mezzanine floors, and a mechanised system to service them, which is very expensive to introduce.”
Warner Estate bought the warehouse, Unit 1E, last October from GE Capital for £17.95m for its Radial Distribution Fund. The fund now owns more than 800,000 sq ft in four sheds at DIRFT.
Last week, M&S announced that it had set up a property jv with ProLogis to create a 1m sq ft distribution hub in Bradford, West Yorkshire, as part of plans to increase its trading space by 20% during the next five years.
It will buy a 50% interest in a site on Prologis Park Bradford for £13.7m. M&S and ProLogis each agreed to invest around £20m in the site, with the retailer taking a 35-year lease.
Cushman & Wakefield advised M&S in DIRFT; M3 acted for Warner.
