The final countdown

By Liza Helps, Property Editor, Logistics Matters

ON THE face of it there is plenty of warehouse space to be had in the Northwest, but statistics can be made to say anything you want and while it is easy to lie with them it is also hard to tell the truth without them – it all depends on the data.

Right now, if you were to look at all the data on immediately available warehouse space in the Northwest – there seems to be an awful lot with vacancy rates reportedly running at near 9%.

At the end of June this year, Savills recorded a 34% year-on-year increase in industrial and logistics floorspace across the Northwest totalling some 7.8 million ft2 across 40 units of 100,000 ft2 +.

The latest figures from Box4 Real Estate, which looks at buildings from 50,000 ft2 +, takes that figure to 13.51 million ft2 in 102 buildings.

Looking at properties over 100,000 ft2 in the region property analyst CoStar’s northwest market analytic director Giles Tebbits puts the vacancy rate at 5.2%. “That’s a nine-year high, up from a low base of around 2% in 2022, when the northwest markets (Greater Manchester, Merseyside, Lancashire, Cumbria, Cheshire) were among the lowest in the country. However, the vacancy rate currently tracks the national average.”

However, remove the space that is secondary and tertiary stock and things start to tighten up considerably.

Digging deeper into his data Savills logistics research associate Lewis Rapley says: “Looking at we have; 51% of the vacant space comprises good-quality, Grade A speculatively developed space, 9% is second-hand Grade A space, 16% is second-hand Grade B space, and 24% is second-hand low-quality Grade C space.”

Newmark’s national industrial and logistics partner Jason Print notes: “There is a certain amount of secondary and tertiary stock that sits on the market getting no interest, there will always be availability – it will never go to zero. If that [unwanted stock] sits at 3% then that will always be part of the supply data distracting from true availability.”

All things being equal, suddenly vacancy rates of 9% do not look quite so rosy and pockets where availability is notionally 6% in prime locations such as Manchester look positively sparse.

Indeed, Cushman & Wakefield’s head of UK logistics, industrial and retail research Edward Bavister says: “Best in class space [in the Northwest] is not as healthy as say somewhere like the East Midlands, and supply is just that little more patchy meaning that it is harder to find  the right building in the right place.”

What compounds the issue is that there is very little speculative pipeline coming forward with just 1.23 million ft2 under construction in units above 50,000 ft2. Cushman & Wakefield partner Rob Taylor says: “There has been a lull in construction starts throughout the first half of this year with only two started in Q3.”

While that is not so much of an issue if there is no take up, the problem is that properties are being let with Box 4 Real Estates founding partner Sam Royle saying that in the third quarter alone some 965,000 ft2 of space was let across six transactions. “This brings the year-to-date total to 2.77 million ft2 across 22 deals in units of 50,000 ft2+.”

Royle adds that a further 2.3 million ft2 of industrial and logistics floorspace is currently under offer and should that all transact by year-end ‘would not only better the take-up figures for 2023 and 2024 but also ride above the pre-Covid average’.

It is clear that take-up is outstripping newly developed units being delivered but is take up also eating into the space that is already there?

Tebbits says: “Negative net absorption in industrial units of more than 100,000 ft2 was pronounced in 2024 (at more than 2 million ft2) as occupiers leaving space comfortably outpaced those taking it.

“However, expectations are for positive net absorption this year and further improvement next year. When combined with slowing construction starts, vacancy is expected to fall back.”

With that in mind it seems odd that there has not been more speculative development starts. That could be due to the issue of development viability, with some sites dealing with a legacy of high acquisition prices through 2020 to 2022. Sites in Trafford Park peaked at £2 million an acre in 2022, which Colliers Northwest industrial and logistics director Andrew Pexton says, ‘would probably test at £1.3/4 million an acre now’. Those high prices coupled with high construction and borrowing costs, make development appraisals hard to stack up.

But the consensus of opinion is that the real nail in the coffin is the fact that what deals are being done are taking a long time to transact.

Indeed, one particularly large deal that was first mooted as in solicitors hand in July may not even make it over the line in December.

Taylor says: “Frustration is certainly a theme in our market at the moment whether it be getting deals done, flushing out enquiries, or even getting people round buildings – it is taking a long time for those conversations to crystallise.

Newmark partner Jason Print agrees: “There is no such thing as a quick deal at the moment, occupiers are still cautious.”

Hardly surprising says Tritax Big Box Developments head of Manchester office, David Travis says: “A turbulent few years of economic uncertainty and unexpected moves by Governments’ both in the UK and abroad, have led to ‘perma crisis’ being the new norm.

“We have to accept that the period of growth from the 80s/90s is no longer around and since BREXIT we are not going to get it back in a hurry.

“Right now, I genuinely believe [some businesses] are using the upcoming budget as an excuse not to do anything though I do have sympathy with the financial directors making that call and risking getting it wrong with [whatever come out of] the budget.”

Pexton adds: “Many business cannot get past the impact of [the Chancellors’] unexpected hike in National Insurance Contributions in the last budget which in effect wiped – in some cases -up to a third off profits, it makes it difficult to do a business plan.”

“All this,” says Print, “is making developers more hesitant to crack on.”

Royle says: “We have some 3 million ft2 of sites with detailed consent on our books that are currently not coming forward but perhaps when investor and developers see more transactions, then we will see more starts.”

Box4 Real estate co-founding partner James Goode adds: “Those [developer/investors] with a entrepreneurial bent will likely be rewarded especially with units between 300,000 -400,000 ft2.”

This is a size range that is particularly in short supply with just two modern Grade A facilities currently available: Logicor’s newly constructed Bolt330 in Bolton and Baring’s Omega Loop 310 in Warrington, now that Indurent’s Omega 420 warehouse has been let to Regency Glass.

Bolt330 totals 331,982 ft comprising a 312,316 ft2 warehouse with 18m eaves, 32 dock and three level access doors served by a 50m yard with paring for 43 HGVs. In addition, it as 19,499 ft2 of office space with two storey hub and separate gatehouse all built to target BREEAM outstanding and an EPC A+ rating. Joint letting agents are Knight Frank, B8 Real Estate and CPP.

Meanwhile Omega Loop provides 309,663 ft2 of space with 292,108 ft2 of warehouse space with 15m eaves and 22 dock, eight Eurodock and four level access doors served by a 50m yard with parking for 54 HGVs. It has 15,422 ft2 of two storey offices a 1,912 ft2 hub and separate gatehouse. Joint letting agents are JLL and Knight Frank.

One such entrepreneurial developer could be Panattoni. It has just secured a 30-acre brownfield redevelopment site in Warrington in an off market deal from Firethorn Trust and already has a investor in tow with Japanese real estate investor Mitsui Fudosan. The partnership it intends to develop out the BREEAM Outstanding and an EPC A+ rated scheme speculatively.

The site at Hardwick Grange which housed the 432,166 ft2 former Safeway/Morrisons distribution centre was acquired by Firethorn for £21 million from British Steel Pension Fund in 2024 and was sublet to Iceland. According to Companies House the property as of 2024 had an investment value of £38.5 million.

It is situated in a prime distribution location, within one mile of Junction 21 of the M6 motorway.

Developer Stoford director Angus Huntley, says: “Any [units] over 300,000 ft2 are in a sweet spot at the moment, and those that have been available have gone well and in a reasonable time frame – it seems bigger is better in terms of letting.”

He adds that Stoford would consider developing a 300,000 ft2 facility speculatively at its latest scheme at Northwich. Stoford is bringing forward an 82-acre employment site near Gadbrook Park in Cheshire on Junction 19 of the M6 motorway, just southwest of Manchester Airport. It could subject to planning provide some 1.1 million ft2 of industrial and logistics space.

Huntley says: “Stoford Park Northwich represents a once-in-a-generation opportunity to unlock a site that has been allocated for employment for several years and has the potential to provide much needed supply in the North West.”

Stoford is not the only developer considering  speculative development, but while it may have to wait for planning, Tritax’s Travis says that developers such as Tritax are in a good position to bring forward new space earlier as, as well as already having planning in place the investor developer is well funded and does not have to go to the market to secure finance. However, he notes: “While there is a dearth of units at present, developers don’t want to flood the market.”

There is obviously a element of caution, that being said Tritax is looking to speculatively  develop two units of 110,000 ft2 and 190,000 ft2 at Tritax Park Wigan next year on Phase 1 of the scheme and is set to speculatively build a 238,000 ft2 unit on Phase 4 of its 1.3 million ft2 Ma6nitude scheme in Middlewich off Junction 18 of the M6 motorway which had previously been marketed as build-to-suit.

There is demand for space going forward despite previously alluded economic issues. Savills regional head of the north west industrial and logistics Jonathan Atherton says: “Enquiries are still coming in; in fact, there are two or three requirements in the market for units over 500,000 ft2.”

However, he says with ‘only one unit immediately available that could accommodate a 500,000 ft2 requirement, those may have to go down the build-to-suit route’.

Mirastar and Marshalls Xdock549 if the only brand new Grade A 500,000 ft2 facility  immediately available in the region. It has only recently reached practical completion. The cross dock facility has a 511,541 ft2 warehouse with 15m eaves as well as 61 dock and 15 level access doors. It is served by two yards of 83 and 100m, with 360 degree circulation and parking for 148 HGVs. It has 33,981 ft2 of Grade A offices as well as a two separate transport offices totalling 5,957 ft2.

Joint agents are Savills and Cushman & Wakefield.

As well as logistics occupiers seeking space in the Northwest, defence behemoths such as Bae are also looking for space alongside data centres meaning that the supply issues are likely to be more pronounced going forward.

Lambert Smith Hampton director James Lewis says: “While there could be a supply issue right now especially for larger properties there are a number of schemes in the pipeline that will come forward over the next five years.”

Atherton agrees: “While these big sites will take time to get out of the ground and through planning they are of a scale that we have not had for a long time.”

A brief round up of schemes [see below] puts the amount of industrial and logistics space set to be developed in the region of 22 million ft2 plus.

Right now, it may be short of space, but developers are looking to develop speculatively, and there are sites already with planning in place that could be brought forward quickly. There is a substantial development pipeline coming down the line – it just depends how long occupiers can wait.

Big box developments

Over the next two to five years some 20 million ft2 plus of much needed industrial and logistics development will come forward through the planning system in the Northwest.

Intermodal Logistics Park North (8.25 million ft2)

Investor developer Tritax Big Box has launched the statutory consultation for this 8.25 million ft2 + rail freight interchange on the former Parkside Colliery near Newton-le-Willows prior to submitting a Development Consent Order to the Planning Inspectorate early next year.

Subject to approval due around the end of 2027, Tritax is looking to be on site in Q4 2027/2028.

As well as the warehouse space the scheme will also provide a rail freight interchange capable of handling up to 16 trains of 775m in length a day including connections to the mainline and ancillary development such as container storage, cranes for the loading and unloading of shipping containers, HGV parking, rail control building, fuelling facilities and staff facilities.

In addition, the scheme will provide a lorry park with welfare facilities and fuelling, a new electrical sub station, energy centre and potential battery storage, a landscaped amenity areas, new woodland and connections for footpaths, cycleways, and bridleways, and public transport hub.

It will have a dedicated road access from Junction 22 of the M6 via Parkside Link Road East.

The scheme could provide circa 6,000 jobs and generate some £230 million GVA once operational.

Northern Gateway (6.5 million ft2)

Developer Harworth and partner Russell LDP has submitted a planning application for the first phase of the Northern Gateway project one of the largest strategic employment allocations in the country, straddling the districts of Bury and Rochdale and positioned at an important intersection around the M60, M62 and M66 motorways.

The Northern Gateway Development Vehicle – a 50/50 partnership between Harworth Group and Russell LDP submitted an outline planning application to Bury and Rochdale Councils earlier this year for 6.5 million ft2 of employment space with a focus on the advanced manufacturing and industrial and logistics sectors as well as supporting infrastructure and amenities, such as retail and leisure space, a hotel and landscaped green open spaces.

Northern Gateway represents the largest proposed employment site in Greater Manchester. The planning application represents approximately half of the total proposed floorspace at Northern Gateway, capable of supporting up to 10,000 jobs on-site, including skilled trades such as research & development, AI and robotics, and logistics. The Northern Gateway opportunity in its entirety is expected to deliver around 20,000 jobs.

Once complete, this phase of the scheme is expected to contribute £630 million of GVA to the regional economy each year and annual business rates of around £20 million to support council services.

The NGDV awaits the Councils’ determination of the outline planning application. If approved, a number of Reserved Matters applications will follow.

Fiddler’s Ferry Power Station (4 million ft2)

Peel NRE has already secured planning permission from Warrington Council for the first phase of the redevelopment  of the 820-acre former Fiddler’s Ferry Power Station. Approval was granted earlier this year for the redevelopment of the 98-acre former power station coal yard to provide a four unit scheme totalling 1.406 million ft2 of industrial and logistics space.

The scheme has already secured its first tenant Titan Group which will to build and operate a state-of-the-art processing and beneficiating facility to turn ash leftover from the power station into a low-carbon cement replacement. The new facility is expected to become operational by the first quarter of 2027.

The units with eaves height from 22-34m will range in size from 98,690 ft2 to 693,930 ft2 (GEA) and will be built to target BREEAM Very Good and an EPC A+ rating

When clearance and land remediation wraps up for the rest of the site, Peel NRE is expected to seek approval for up to 860 home son the site as well as a further 2.6 million ft2 of industrial and logistics space.

Tritax Park Wigan (1.4 million ft2)

Developer investor Tritax Big Box having secured detailed planning approval for the first two units at its 135-acre scheme off Junction 25 of the M6 motorway is seeking approval for the remainder of the site (109.14-acres) which is expected some 1 million ft2 of industrial and logistics space in five units ranging from 84,500 ft2 to 348,000 ft2. A reserved matters application was submitted for this second phase at the end of last year. Tritax is expecting to speculatively develop the first two units of 110,000 ft2 and 190,000 ft2 on phase 1 of the scheme in 2026 and will follow that with phase 2 subject to planning.

Finnington Land, Chorley (1.3 million ft)

Investor developer FI Real Estate Management has submitted plans for a 1.3 million ft2 logistics park in Chorley.

The scheme on approx. 100-acres of land close to Junction 3 of the M65 corridor envisages a £70 million development of just two BREEAM Excellent buildings. It has been designed to address to meet growing demand for 500,000 ft2 plus logistics and industrial facilities in the area.

It is expected to generate 1,300 jobs and contribute nearly £400m of economic value to the local economy. The proposal follows FIREM’s ongoing redevelopment of the Botany Bay site, a three-phase, 1 million ft2 project off Junction 8 of the M61.

Although the site falls within the Green Belt, the Central Lancashire Local Plan has earmarked the M65 corridor in Chorley as a key area for future employment and development.

Stoford Park Northwich (1.1 million ft2)

Developer Stoford has submitted a hybrid planning application for a new c.1.1 million ft2 industrial and logistics scheme in Northwich, Cheshire, with a GDV of £200 million in October.

The scheme will be capable of delivering manufacturing, industrial, and logistics units ranging from 100,000 ft2 to 600,000 ft2 on an 82-acre site adjacent to Gadbrook Park, near Junction 19 of the M6 motorway.

The proposals include a new primary substation to significantly enhance energy supply to the site and major infrastructure improvements, with an upgrade to the A556 highway junction.

The development is forecast to inject around £120 million into the construction sector, as well as creating up to 225 jobs during the construction phase and support a further 1,700 jobs once operational, generating up to £138 million annually for the local economy.