As the UK’s largest urban logistics property developer and the only one operating nationwide, Chancerygate is in a unique position to explore factors shaping regional urban logistics markets.
This article examines the North West and how our developments in the region are enabling occupiers to unlock their growth potential through Grade A urban logistics space.
Location, population and transportation
The North West represents a significant regional market where there is strong and growing demand from occupiers for sustainable, Grade A urban logistics accommodation.
According to the ONS, the North West’s population grew 5.2 per cent between 2011 and 2021, with the two biggest concentrations being Greater Manchester, currently standing at 2.8m people, and Merseyside’s 1.4m residents.
With expanding populations and increasing levels of urban regeneration, the strong demand for urban logistics in the North West is sustainable and increasing. For that reason, Chancerygate has delivered seven schemes totalling 650,000 sq ft in the region over the past three years alone.
A fundamental factor of occupational demand, and causal urban logistics opportunities, is access to road infrastructure.
In Manchester, the M60 is regarded as the key road and is comparable to the M25 for London and the South East. The M60 is also one of the major reasons for Chancerygate choosing to develop in Bredbury, Oldham and Trafford Park which all provide fast access to the road.
In the wider North West region, access to the M6 and M62 is key and this was a key driver in our decision to develop in both Warrington and Congleton.
Anticipating demand
When exploring the potential for current and future developments in the region, a significant driver is analysing current and prospective occupier demand.
To ascertain this we draw heavily on our team’s intimate understanding of the North West, its towns, cities and demographics, how they are evolving and how they will change in the future.
For example, we have recently developed sites in Congleton and Knutsford. These are both towns with an entrepreneurial and affluent population, a high density of successful businesses, significant volumes of residential development and improved infrastructure.
Demand for Grade A urban logistics and industrial space in the North West is continuing to grow due to a range of factors. These include increasing levels of ecommerce and the need to accommodate growing stock levels for ‘just in case’ shipping.
In addition, inventory management and being able to weather potential supply chain and procurement shocks are also increasing interest in strategically located accommodation.
Supply, however, is simultaneously being constrained by the priority for residential development in national planning policy and, hence, local plans.
With these prevailing market conditions, we know that continuing to identify opportunities and acting decisively to secure them will enable the ongoing expansion of Chancerygate within the North West
Economic uncertainty and the sustainability agenda
For the last 12 months, we have been adjusting to rising interest rates and a highly inflationary economic environment.
However, there is now a growing confidence that this will improve over the course of 2023, so there are reasons to be optimistic for the ongoing prospects of Grade A urban logistics in the North West and beyond. This positive outlook is also improving investment liquidity and, we believe, will sharpen pricing.
The main driver for our increased optimism in the North West is the critical shortage of high quality Grade A space for both occupiers and investors.
This has been accentuated by a reduction in development starts over the last 12 months as markets stagnated, land prices crashed and construction costs increased.
In the meantime, occupational demand has remained robust and is increasingly focused on an environmentally sustainable product. Sustainability has, of course, been on investors’ radars for a few years now.
But, environmentally friendly assets are becoming more of a priority to occupiers as they increasingly start to embrace energy efficiency in response to their corporate agendas and need to reduce operational costs.
The combination of investor, occupier and regulatory demands around sustainability means urban logistics accommodation with strong green credentials will be an increasingly important driver of value creation.
Looking ahead
Since opening our Warrington office in 2015, we have worked hard to establish a reputation throughout the North West for the successful delivery of high specification, sustainable urban logistics accommodation in strategic locations.
Despite fluctuations in market conditions, these fundamentals of our proposition within the region remain the same because there is always demand for them.
When these are combined with our optimism about the regional economy, it makes us best placed to continue playing a leading role in developing more of the North West’s essential urban logistics space.
Chancerygate offers urban logistics units freehold or leasehold in strategic locations across the North West. To view our latest developments, click here.
To find out more about how we can help with your urban logistics property requirements in the North West, contact Mike Walker or Chris Brown.
