EDITORIAL FOR BUSINESS TIMES – WELLINGBOROUGH FEATURE

‘THE MARKET RETURNS’

May 2010

Mark Brown of Budworth Hardcastle reports a dramatic increase in industrial/warehouse lettings over the past six months.

In early 2009 most companies with relocation/expansion aspirations were reluctant to make a commitment to take additional space. Not surprising given the extraordinary economic circumstances and at the time companies were still assessing how their particular businesses would be affected by the economic downturn.

Since late 2009 that situation has changed, those companies that have survived or in some cases even prospered in the recession are now looking to take advantage of the many excellent property deals available.

Unfortunately due to difficult lending criteria being set by the majority of Banks, the freehold market is still relatively quiet even though across the board commercial property has probably dropped in value between 25% - 40% depending upon what type of property and location.

Nevertheless with excellent deals now available on leasehold properties and with landlords becoming increasingly flexible in terms of the types of leases they are prepared to offer, the take up of such accommodation is now back to a similar level as prior to the recession.

For example at Fleming Close on the Park Farm Industrial Estate in Wellingborough, there are 16 units ranging between 3,100sq.ft and 12,500sq.ft.

Just six months ago there were eight units available, now there are just two units available comprising 9,906sq.ft and 7,506sq.ft respectively. These refurbished industrial units are available on a flexible basis at a commencing rent of £2.50 per sq.ft subject to status.

Harrowden Court is a new industrial development by Rotherhill and this has been similarly successful.

The total development comprises approaching 90,000sq.ft in eleven units.

There is now just approaching 17,000sq.ft remaining to let or for sale, in units from 4,454sq.ft up to 16,670sq.ft.

Significantly the units at Harrowden Court are brand new, available on a virtual freehold basis or on leasehold basis where the landlord is prepared to fit out the shell unit to an ingoing occupier’s requirements subject to agreeing suitable terms.

Significantly three of the smaller units at Harrowden Court have been sold to owner occupiers at prices which represented good value for money to the purchasers.

Within the last six months Budworth Hardcastle have also let a 6,500sq.ft unit at Rushden Business Park to Boy Ltd, and a 5,500sq.ft unit at Morris Close, Park Farm which has been on the market for over two years is now under offer on a virtual freehold basis.

Another significant letting has occurred at Unit 1 Wendel Point, Park Farm where Budworth Hardcastle have let a 25,000sq.ft modern facility on a new lease to a local company.

A significant new instruction has just been received by Budworth Hardcastle (working in this instance with Prop Search), at Sinclair Drive, Park Farm.

The property will be available from Summer 2010 and comprises 40,766sq.ft. It is a detached building suitable for both industrial and warehousing uses. The building is available to let although the owners may consider a freehold disposal.

To sum up therefore Mark Brown describes the market as:

‘Buoyant for decent quality leasehold property, providing landlords are prepared to be realistic with regard to rental expectations, quieter in respect of freehold disposals, mainly due to the strict lending criteria of most mortgagees.

Our biggest concern is running out of stock to let over the next 12 months as the majority of the good quality buildings are going at a steady rate, very little is coming new to the market, mainly because there is no new development taking place. The Government policy of charging rates on empty commercial property certainly does not help in that regard!’