Signs of activity for large industrial site space

In a report on the region's logistics market, CB Richard Ellis (CBRE) said the sector had witnessed early signs of activity with strong enquiry levels in the first two months of 2010, including interest by compost and recycling specialist New Earth Solutions.

Dave Cato, associate director for industrial agency at CBRE in Leeds, said: "As we move into 2010, we are seeing an increase in momentum namely due to the strong enquiry levels which are currently live in the marketplace with a number of occupiers actively looking for 100,000 sq ft-plus within Yorkshire.

"A sector for which we are seeing increased activity during 2009 and into 2010 is from the waste-management and recycling industries who are actively seeking facilities in excess of 100,000 sq ft."

New regulations placed on local authorities to reduce the amount of waste going into landfill are driving the growth.

Mr Cato added: "The emergence of enquiries from companies such as New Earth Solutions is good news for the Yorkshire logistics market where there are currently at least 20 new-build/modern properties over 100,000 sq ft available."

Take up of modern, new-build space of more than 100,000 sq ft in Yorkshire and the North-East increased slightly to 1.71m sq ft in 2009, from 1.61m sq ft in 2008.

Mr Cato said landlords are offering greater flexibility in terms of rent, lease length and incentives. Prime yields in Yorkshire and the North-East have hardened from 8.5 per cent in the last three months of 2008, to 7.25 per cent in 2009, signalling a positive outlook for the market as property values rise.

There were several notable deals in Yorkshire in the second half of 2009.

Vasanta snapped up 250,000 sq ft at Wakefield Europort off ProLogis, while Wincanton took 135,000 sq ft at the business park, and The Car Shop moved into 142,000 sq ft at Trax Park in Doncaster.

There are currently a number of key buildings offering in excess of 400,000 sq ft in the Yorkshire region, including at Sherburn Distribution Park, CrossFlow 530, in Barnsley, Thornton Road, in Bradford, Nimbus, in Doncaster, SIRFT 1&2 and Blade G Park, in Sheffield, and Vulcan Firstpoint in Doncaster.

Mr Cato added: "Despite no brand new build entering the Yorkshire market in 2009, availability of over 100,000 sq ft space in Yorkshire and the North-East had reached 9.2m sq ft in Q4, an increase from 6.7m sq ft in Q4 2008.

"This increase was, in part, due to a large amount of space coming back to the market as a result of company failures, lease expires or break clauses being exercised."

The existing available stock faces stiff competition from

several development sites that can offer design and build opportunities, such as those at Capitol Park, in Goole, Link 62, in Normanton, and Logic, in Leeds.

However, the over-supply levels and the introduction of empty rates legislation signals good news for occupiers, according to Mr Cato, as landlords are offering deals which can secure up to two-and-a-half years rent-free on 10-year leases with up to 3.5 years on a 15-year lease.

But he warned that these deals will not be around forever.

Mr Cato said: "Occupiers who are in a position to act quickly can take advantage of the flexibility offered by landlords with excellent deals available. Once the available space starts to get taken up, landlords will begin to be less flexible and rein in their offers."

He added: "With the difficulty experienced by developers in obtaining bank funding for speculative development, no new space of any significant size is expected to enter the market during 2010. This should have a positive impact on the market as rental levels increase due to the reduction in supply levels."

Time running out for tax deal

Businesses are being encouraged to take advantage of the UK's largest Enterprise Zone before it expires next year.

Brookfields Park, the last remaining development site on the Manvers Enterprise Zone, in Rotherham, is almost full, with just two plots awaiting development

The 85-acre former colliery site was designated Enterprise Zone status in 1995, along with five others across the Dearne Valley.

Although its status expired in 2005, the site's owners, St Paul's Developments, and its funding partner, Tritax Assets, extended the contract until April 2011.

This means that tax relief can be claimed on any development which takes place before April 2011.

Lambert Smith Hampton and Knight Frank are joint agents.

Around 1.6m sq ft of space has been built and the park is home to Next, Maplin Electronics, Garnett Dickinson and Pegler Yorkshire

Group.

The remaining two sites provide a further 180,000 sq ft of office, industrial or warehouse accommodation.