In the second feature of our regionalised series, Chancerygate’s development director, Mike Walker, and development manager, Chris Brown, share their thoughts on how the business has built a presence within the north of England and Scotland, and what makes our Warrington office stand out from the competition.
Chancerygate’s “Northern Outpost”
Our Warrington office operates across the north of England and Scotland. It has become Chancerygate’s ‘super hub’ for the North, with recent acquisitions in Leeds and Edinburgh signalling our expansion into Yorkshire and Scotland and intent to grow further into these markets.
Replicating the activity of our London and Midlands offices, we are actively looking for opportunities across the region in proximity to strong transport links and urban logistics locations serving Liverpool, Manchester, Leeds, Edinburgh and Glasgow. In many of these areas, there has been no speculative industrial development for more than 10 years, despite there being strong demand for new, modern multi-unit schemes. This is something Chancerygate is looking to address.
Establishing ourselves as the go-to multi-use industrial developer in the North
Since opening our North West office from a standing start in 2015, we have burgeoned an excellent reputation for successfully identifying and delivering multi-unit industrial schemes across the North and Scotland.
We pride ourselves on our entrepreneurial business model, always buying sites with the intention of speculatively developing. Our ability to offer units to occupiers on both freehold and leasehold bases is a key point of difference that we offer over our competitors.
Across 2020, we achieved practical completion on nearly 300,000 sq ft of industrial and warehousing space, with an end value of £45m. This year, we have secured planning on a further 445,000 sq ft of space with an end value of £60m, and have bought sites and submitted planning for another 490,000 sq ft with an end value of circa £70m.
Asset management is a core part of the activities in our office – we currently manage a portfolio of 18 properties to the total value of £46m and are actively looking for more.
Growth in demand for manufacturing units
Over the past 12 months, Brexit and the global pandemic have accelerated the growth of the industrial property market and has underlined the importance of the asset class to the economy creating pent up demand from investors and occupiers.
Across our region, we have seen a particular increase in demand for smaller units from manufacturers and trade counter occupiers from businesses within the DIY and home improvements sector, such as builders’ merchants, and décor and furniture businesses.
In the manufacturing sector, we have seen a rising trend in manufacturers requiring bright, clean, modern premises to meet production, employee and customer requirements. An example of this is at our recently completed Mersey Reach scheme in Liverpool where we have agreed leases to zero calorie tonic start-up Skinny Tonic and Hardy UK for the manufacturing of precision knives and blades for the leather industry.
Developing purposeful public sector relationships to deliver regeneration
A unique selling point of our northern office is that we have dynamically worked alongside local authorities (“LAs”) and public funding bodies to deliver industrial schemes which support regeneration.
With pressure being placed on LAs to meet regeneration and economic targets, we have built purposeful relationships with authorities and funders in the public sector. Economic issues, such as job creation, are integral parts of any regeneration requirements and public / private sector collaboration can help support this. Without this collaboration much-needed regeneration may not be feasible.
We have developed schemes using public sector investment from JESSICA Funds. At Livingston Trade Park, we used development funding from the Scottish Partnership for Regeneration in Urban Centres (SPRUCE) fund, and at our Mersey Reach scheme in Aintree, Liverpool, we used funding from The Chrysalis Fund. Here, we worked closely with Sefton Council’s economic development team to find occupiers for the units.
Feeding the development pipeline
Moving forward, we aim to continue to deliver high-quality multi-unit industrial and logistics developments across the north of England and Scotland.
Our goal is to think differently, act decisively and seek new opportunities in markets and areas which other developers may not. A good example of this is our work at Novus, Knutsford, a high-net-worth area not typically associated with its suitability for industrial development.
An insight from the agents
We spoke with Jason Print, partner at Gerald Eve and head of the firm’s national logistics and industrial team, about how the industrial property market has been impacted by Covid-19 and his outlook for the future.
Discussing the current market situation, Jason said: “Across the North, occupiers have been eagerly awaiting new units to be built in strategic locations. This occupier demand has created a massive shortage in small and mid-sized industrial property.
“In most cases, more than 50 per cent of new small to mid-sized units are either let, sold or under offer by the time a development achieves practical completion. This highlights the depth of demand for high-quality, new industrial space.
“Over the course of the last 12 months, many businesses have had to shift focus from growth plans to purely surviving. However, as we move out of restrictions once again, these plans are being brought back to the forefront and businesses want to fast track expansion ambitions. This is is generating huge, pent-up demand for new space across all sectors and industries. Onshoring to shorten supply chains is also a contributing factor to the growth in demand for small to medium-sized space.
“The pandemic aside, occupiers are placing a greater emphasis on the sustainability credentials of a property. ESG has now become a priority for businesses, and opting for a newly built industrial unit enables them to tick a lot of boxes to meet ‘green’ requirements.
“Moving forward, I see no reason why the upward trajectory of demand for small to mid-sized industrial units will slow down. The dynamic of marketplaces aren’t going to see drastic changes, especially as the demand for manufacturing and purchasing of goods from this country rises. This will mean the requirement for high-quality small to mid-sized industrial stock will continue.”
Chancerygate’s Warrington office is always seeking opportunities for new sites for development and investment. Our land requirements for development are for sites between two to 15 acres and we are also looking for multi-let industrial estate investments ranging from £3m to £20m.