The first in our regionalised series, Chancerygate’s development director and head of our Birmingham office, Mark Garrity, shares his thoughts on how we’ve built a presence within the Midlands since opening our base in the region in January 2019.
We’ve also spoken with Ed Kennerley, an associate in Knight Frank’s Midlands logistics and industrial agency team, to gain insights from an agent’s perspective on how the Midlands industrial property market has reacted as Covid-19 restrictions begin to ease.
Burgeoning a reputation
Chancerygate has been active in the Midlands market for more than 15 years. 18 months ago, we opened our first office in the region and this physical presence has led to a very busy period.
Having a physical presence has certainly helped with forging stronger relationships, being made aware of sites (particularly those which are off market) and building our profile. The consequences of this are that we have become one of the ‘go to’ developers in the region for urban logistics sites. New schemes at Minworth Business Park, Aston Gateway in Birmingham and Coventry’s Holbrook Business Park have been secured over the period.
Chancerygate’s reputation for delivering high-quality developments has certainly helped us stand out more in the area. We have been particularly well received thanks to our preferred business model of selling units freehold.
A personal highlight for myself was Chancerygate acquiring Minworth Business Park within six months of me joining the team. We were selected as the preferred bidder in March 2019 and completed in July 2019.
It was important to get the first deal ‘under our belt’ and securing this excellent site so quickly helped enhance Chancerygate’s reputation within the Midlands. It emphasised to the market that we are active in the region and keen to secure sites which we probably would not have pursued without a regional presence.
Impact of Covid-19 in the Midlands
The demand for industrial and logistics warehousing in the Midlands appears to be just as strong now lockdown is easing as it was prior to the lockdown.
We’ve achieved practical completion at Trent Gateway, Beeston Business Park during the lockdown period. We’re seeing strong demand from occupiers and that there’s still an appetite for deals to be completed. Over a five-week period following the easing of lockdown, we agreed deals on four units. We’re continuing to bid on sites too, highlighting our conviction in the industrial property market.
There is evidence that businesses in the region are finding new opportunities and revenue streams creating demand for units. For example, a fresh fish supplier in Nottingham is under offer to acquire a unit at Beeston. It normally supplies the restaurant industry and has now opened a home delivery service to the public which has thrived, so will be operating both business models post-lockdown. These new revenue streams are increasing the demand from occupiers.
Demand will be further increased by a change in shopping habits caused by the pandemic which will inevitably lead to greater demand for warehousing space as more consumers move to e-retail. It is unlikely that consumers will rush back to stores even post-pandemic, so the online marketplace will continue to grow.
During the lockdown, supermarkets have thrived, and their business model has also changed, with more consumers utilising online orders and delivery services. If this change in consumer habits lasts, supermarkets will adapt and evolve their delivery operations and require further warehousing to base their deliveries from.
Developing our Midlands presence
Our overall goal is to become the number one developer of urban and last mile industrial units in the Midlands. To enable the Birmingham team’s growth and reach this goal, we anticipate following the blueprint of Chancerygate’s North West office, which started as a one-person operation in 2015 and has now expanded to five people.
Currently, the Birmingham team consists of project manager Dan Powers and myself, but I aim to expand this team over the next 12 months to continue growing our presence. With a larger team, we will be able to further scale up our work in the region.
There is a fantastic opportunity to build on the success that we have had in the Midlands since the office was established. The market has remained resilient despite the challenges that have arisen since the Covid-19 pandemic. Over the coming years, I aspire for Chancerygate to become the number one industrial property developer of multi-unit industrial estates in the Midlands, renowned and recognised as providing a fantastic high-quality product of desirable schemes.
An insight from the agents
As lockdown restrictions ease and the economy begins to reopen, we spoke with Ed Kennerley, an associate in Knight Frank’s Midlands logistics and industrial agency team, to get his thoughts how the industrial property market in the region has reacted to the Covid-19 pandemic.
Discussing the current market situation, Ed said: “I’ve been pleasantly surprised to how the market has adapted since the Covid-19 lockdown, with businesses continuing to push on taking new space. There has been a lot of demand in the larger end for industrial and warehousing space, as well as in the SMEs.
“Although we saw an initial pause in the demand with new and existing requirements at the start of the lockdown, there was an initial uplift from occupiers with short-term requirements in the main to service the food and health sectors. We’re noticing that more businesses are now looking at their mid-to-long term solutions and demand has swiftly returned, particularly over the last month or so as measures have eased, and businesses try to resume normal practice.
“In the main, this uplift has been created by the further growth of e-commerce. There has been a shift in consumer behaviour, with buying online becoming more popular for purchases, rather than visiting a physical retailer given the latter option was not available for some time following lockdown.
“Businesses are having to adapt how they operate to meet these requirements and it has led to a greater demand for warehouse space. We feel this trend will continue to grow in the mid-to-long term.
“However, with an increased demand comes the risk of a shortage in supply of industrial and warehouse space over the next 12-18 months and it’s important we continue to see more speculative development to fulfil the demand.”
Chancerygate offers freehold industrial and warehousing units for sale in strategic locations across the Midlands. We are always looking for new sites. To find out more about how we can help with your requirements call Mark Garrity on M: 07773 530 205 or E: firstname.lastname@example.org