Yorkshire & NE led way in UK logistics take-up for Q3 2022

Tess Egginton
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Yorkshire & NE led way in UK logistics take-up for Q3 2022

Yorkshire & North East led the way in UK logistics take-up for Q3 2022, contributing 27.1% of total take-up, despite a 38% decline in the region for this quarter, according to the latest research from global real estate advisor, CBRE.

Availability rose to 1.8m sq ft at the end of Q3 in Yorkshire & North East, up 16% QoQ, with 56% of this available space comprised of speculative units under construction. Due to the lack of ready-to-occupy space, the region’s vacancy rate fell further to 1.04%, down slightly from 1.07% in Q2. Big box prime rents remained stable for the fourth consecutive quarter at £7.75 psf. Prime yields moved out a further 60bps to 4.50%.

Nationally take-up of logistics space totalled 7.67m sq ft for Q3 2022. The aggregate for the first nine months of 2022 stands at 30.25m sq ft, which equates to 95.8% of 2021 and 92.1% of the record-breaking year of 2020 for the same period, signalling the sector’s resilience. 

This represents a decrease of 30% compared with Q3 2021, which saw take-up reach 10.9m sq ft. A total of 29 deals have completed this quarter, a decrease of 19.4% compared with Q3 2021, which saw 36 deals complete. Speculative schemes accounted for almost half of total take-up at 46.9%, followed by build-to-suit at 34.7% and secondhand accounting for the remaining 18.4%. 

Third-party logistics dominated at a sector level, accounting for 56.3% of total take-up for the quarter. This was followed by retail at 21.3%. The remaining 22.4% was split across supermarkets, manufacturing, motor and other, demonstrating that demand for logistics space is wide-ranging and that competition for units remains strong. 

Take-up was widespread across the regions for the quarter. Yorkshire & North East led the way at 27.1%. This was followed by West Midlands at 20.7%, East Midlands at 19%, South East at 16.3%, North West at 9.3% and the South West at 7.5%.

Nationally, vacant available space increased from 5.73m sq ft at Q2 2022 to 6.51m at Q3 2022. This was due to a number of speculative buildings reaching practical completion during the quarter. However, with only 21 built speculative units available, there remains a significant under supply. The increase in completed units resulted in the UK vacancy rate increasing fractionally from 1.18% to 1.32%.

Mike Baugh, executive director, CBRE Leeds, said: “The regional market is still in a good place, with a comparative low supply of space and continued steady occupier demand.  There are a number of significant deals under offer in Yorkshire, which will hopefully lead to another strong performance for the year end.”

Jonathan Compton, senior director, UK Logistics at CBRE, said: “Despite the ongoing economic uncertainty, the logistics occupational market remains strong with a wide range of occupiers securing space across the country. The decrease in take-up this quarter points to a degree of normalisation in the market following a prolonged period of record-breaking numbers, however the under-offer pipeline signals towards another robust year for the sector.”

Annabel Nash, senior analyst, UK Logistics Research at CBRE, added: “We have seen a significant shift in the type of occupier taking space following a dominant display from online retail. Third-party logistics providers are now leading the pack, accounting for more than a third of total take-up year-to-date. Ongoing supply chain and shipping disruptions are resulting in longer lead times, driving retailers to extend their stock profile in the UK. Therefore, companies that do not have the sufficient infrastructure are turning to third-party logistics providers for fulfillment on their behalf.”

Completion of Saltend Tricoya project plant suffers further 6 month delays as ownership changes

Steve Fisher
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Completion of Saltend Tricoya project plant suffers further 6 month delays as ownership changes
The Humber’s Saltend Tricoya project plant, which has suffered various delays and spiralling costs has been put on hold as a new owner was revealed this morning. The new owner intends to freeze current plant activity on construction and commissioning for an anticipated period of at least six months Accsys has reached agreement to acquire full ownership of Tricoya UK Limited (TUK)and Tricoya Technologies Limited (TTL), from its Consortium Partners. The consideration for this will be satisfied by the issue of 11.9 million new ordinary Accsys shares to the other Tricoya Consortium Partners (the “Restructure”). The Share Issuance represents 5.74% of the current issued share capital of Accsys and based on the Accsys share price, it represents a value of around £8.4m. NatWest has agreed to restructure its TUK debt facility, reducing the principal amount by approximately €9m to total €6m, under a new 7-year term. The NatWest facility remains ringfenced from the Accsys Group, the Accoya® plant at Arnhem and other joint ventures. No repayments are due until the facility maturity date.
This 6 month delay will significantly reduce the FY23 cash impact from Hull on a monthly cost run rate basis from approximately €4m earlier in CY 2022 to around €0.5m going forward. During the Hold Period the Accsys Board will continue to assess the further work needed to finalise construction and commissioning of the Tricoya Hull Project and the forecasting of the remaining costs. The length of the Hold Period will be determined by the Board based on measurable parameters and will not be for an indefinite period. Two separate specialist firms were engaged to validate the capital costs for the remaining construction and commissioning work required to bring the Tricoya Hull Project into operation. Noting that the plant is the first of its kind, the specialists suggest that the additional capital cost to complete and commission the plant is expected to be up to around €35m. This would take total project capital cost to up to around €138m, from the previously announced expected maximum of €103m on 30 June 2022.

Plans approved for new build-to-rent community in York

Tess Egginton
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Plans approved for new build-to-rent community in York
Plans have been approved for a new build-to-rent community on the former Heworth gasworks site in York. Developer and operator Moda Living has been successful with a Reserved Matters planning application, following the granting of outline approval for the whole site in 2020. The plans include 392 new homes in a mix of studio, one- two- and three-bed homes, along with extensive state-of-the-art amenity spaces including private dining rooms, 24/7 gym and fitness centre, a cinema room and a 24-hour concierge, to create a health and wellbeing-focused community and address the shortage of quality homes for rent in York. With a community green at its heart, the neighbourhood will also deliver new landscaped green space open to the public. Moda Living Managing Director Tony Brooks said: “As a Yorkshire-based family business, we are very excited to have been given the go ahead to bring this new generation of rental living to York. “Our ethos is to put the needs of residents at the heart of everything we do, and so we offer deposit-free living, encourage wellness in both physical and mental health and run a regular programme of events for residents, designed around their interests and demands, to build a community they love being a part of. “The private rental sector continues to prove its resilience, and the demand for new homes combined with quality of product means we are confident that Heworth Green will prove a valuable addition to the city of York and its communities.” Works are expected to start early next year, adding to the £1.5bn of Moda Living projects on site across the UK. The 10-acre former Heworth gasworks site will be remediated early in the New Year and, as well as the new Moda Living community, also includes a masterplan with 215 other homes by North Star and Heworth Green developments, a new neighbourhood park and extensive landscaping throughout the development. Leeds-based architect, Fuse Studios, has designed the four- to six-storey buildings on this part of the site. The neighbourhood is part of Moda Living’s build-to-rent portfolio with investment partner Apache Capital Partners. CEO of Apache Capital John Dunkerley said: “This is an important next step in the growth of our prime multi-family portfolio, with a model focussed on premium quality and service, and high amenity provision in core regional economies. Our operational schemes have illustrated the resilience of the class A multi-family model in a sector already attracting heightened interest from income-seeking investors, and Apache Capital and Moda have set the standard within it.”

Lincolnshire to receive a share of £17.5m funding boost to spur future growth

Steve Fisher
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Lincolnshire to receive a share of £17.5m funding boost to spur future growth
A successful bid for the region to the Department for Culture, Media and Sport’s Create Growth programme will see £1.275m in grant funding coming to Greater Lincolnshire. The funding aims to support high-growth potential creative businesses in sectors such as film, gaming, fashion and architecture. Businesses will also benefit from investor engagement through pitching events and investor outreach, and will be able to draw from a fund of up to £7 million being managed by Innovate UK to support them in achieving their growth potential. Cllr Colin Davie, Executive Councillor for Economy and Place at Lincolnshire County Council, said:“We know that there can be barriers to some businesses getting the support they need to grow and prosper. We have some fantastic businesses in the creative sector in the county but many don’t have the support needed to scale up and attract investment for growth. “This funding means they can get specialist support to overcome those challenges. Yet again in Lincolnshire we’re showing the power of partnerships – unlocking a significant amount of money that can be invested in our businesses.” Sukhy Johal, Director of the Centre for Culture and Creativity at the University of Lincoln, said:“We’re delighted to hear of the success for the Create Growth Programme, with over 3500 creative sector businesses across greater Lincolnshire, the investment will provide a boost to the burgeoning ecology, coupled with development of the Barbican Creative Hub on the horizon. “This fabulous news underlines our collective commitment in supporting this important and growing sector.” Pat Doody, Chair of the Greater Lincolnshire Local Enterprise Partnership, said:“The success of our regional bid for funding from the Create Growth programme is fantastic news for Greater Lincolnshire. “The creative industries are one of the fastest growing sectors of the UK economy, providing significant employment opportunities and economic benefits, and the programme will provide a support package to help our businesses to scale up and access investment in order to grow.”

South Lincolnshire Food Enterprise Zone welcomes first tenant

Steve Fisher
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South Lincolnshire Food Enterprise Zone welcomes first tenant

Moving into new office space was a well-calculated decision for local accountant Tim Burrows, of Station One Accountants.

Tim owns and runs the accountancy firm, whose main client base is agricultural and food businesses, making the South Lincolnshire Food Enterprise Zone the perfect location for his new office. Cllr Colin Davie, executive councillor for economy and place at Lincolnshire County Council, said: “The Hub building is a great new space for established, growing and start-up businesses. I’m delighted that an existing local business has chosen to re-locate here as the first of many new tenants, and wish Tim every success. “All businesses who locate at the Hub will benefit from being at the forefront of new developments and innovation in agri-tech and in turn, will add their own expertise to support the sector.” Tim Burrows, said: “To have my own office with high-tech spec and the support of The Hub staff, but with the opportunity to hire a Meeting Room as and when I needed one, was just what I was looking for, and I am not disappointed. “When the Café is open on the ground floor, it will be even more attractive for client visits in a more informal, but professional environment. “There is plenty of parking on site, with EV charging points too. The building has been well thought out, with a shower room for example, if you cycle to work. “I am looking forward to the opportunity of working alongside other companies to offer advice where I can with my experience of working as an accountant within the food industry to help their business flourish.”  

South & East Lincolnshire Councils Partnership awarded NPO status and £2m funding

Steve Fisher
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South & East Lincolnshire Councils Partnership awarded NPO status and £2m funding
The South & East Lincolnshire Councils Partnership is delighted to have been awarded National Portfolio Organisation status for the first time – securing just under £2m to support art, culture and creativity across the Partnership. The prestigious status awarded by Arts Council England has seen funding of £1,955,799 allocated for 2023-2026 to help support arts and cultural organisations across South Holland, East Lindsey and Boston. It will also support the creation of cultural centres at The Guildhall in Boston, Ayscoughfee Hall in South Holland and the Colonnade in Sutton on Sea and fund a programme of art and culture across the Partnership centred on the rich heritage and stories from each district. Education, research and skills programmes will also be developed, giving more people access to culture on their doorstep. The NPO comes after Boston and East Lindsey adopted a new cultural framework which sets out an ambitious vision for culture, connecting heritage and the visitor economy while recognising the health and wellbeing benefits culture brings to people’s lives. The Partnership is committed to extending the Cultural framework into South Holland too. Competition for the status was extremely high, with 1,700 applications made nationally from organisations, venues and providers. In total, 990 organisations will receive a share of £446 million (each year) ensuring that more people in more places have access to fulfilling art and culture. As well as the NPO for the Partnership, The SO Festival, Magna Vitae Trust for Leisure and Culture’s flagship cultural event in East Lindsey has also been awarded Arts Council England funding and secured its place as a National Portfolio Organisation for the third time running https://www.sofestival.org/so-festival-npo-2022/ Cllr Craig Leyland, Leader of East Lindsey District Council said: “Achieving NPO status and almost £2m for our communities to better access culture is genuinely a monumental achievement for the Partnership. “The Partnership has a proven track record of working collaboratively, including in the arts and culture sector across our three districts. This funding will help support them, as well as the health and wellbeing of our residents who will have more access to events and culture and support the local economy.” Lord Gary Porter, Leader of South Holland District Council said: “Being part of the National Portfolio investment programme and the funding awarded will create new opportunities for our residents, community groups and organisations and support Ayscoughfee Hall in Spalding as a central hub. “The heritage of South Holland is what shapes this district and we should all celebrate the stories which have built our communities. Going to any event, whether it be a drama group, show or festival, can really help improve health and wellbeing. I am pleased this funding will help our residents access even more things to do on their doorstep.” Cllr Paul Skinner, Leader of Boston Borough Council said: “This is a fantastic achievement for the Partnership and Boston. The town is built around its history and has so much to offer for local and international visitors. “This funding will help tell those stories to a wider audience and support our community-driven cultural providers as we lead up to the milestone of Boston 2030 and the internationally opportunities that will present to celebrate the town’s heritage.”

Work begins on £2m children’s care home in Lincolnshire

Steve Fisher
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Work begins on £2m children’s care home in Lincolnshire

Lindum Group has started work on a £2m children’s care home designed by Kier Construction, Design & Business Services on behalf of Lincolnshire County Council.

The council is looking to create additional places in the county for children aged between 12-18 that require a safe place to stay. The project will involve the creation of a two-storey, six-bedroom traditional brick and block property, with PV solar panels on the roof to improve energy efficiency. The proposed building aims to appear as domestic as possible, providing a safe, homely feel. The home will also include staff accommodation, a dining room, kitchen, and lounge. It will also be fully accessible for those with disabilities. In addition, the building will be fully soundproofed, with acoustic floor, ceiling, and panels under the roof. The grounds will feature landscaped gardens, a new car park and a gated entrance, and will be protected by a six-foot fence. Lindum will also be taking on improvement works to the road leading up to the house, benefitting both the children’s home and the nearby theatre. The scheme will cost over £2m and is being jointly funded by the county council and the Department for Education. The works contract was awarded through the Pagabo Medium Works Framework. The project will create 15 new jobs. Cllr Mrs Patricia Bradwell OBE, executive member for children’s services at Lincolnshire County Council, said: “Over the last few years, we’ve seen a rising number of young people needing care, so it’s important we have enough accommodation here in Lincolnshire for those who need it. To that end, the council has earmarked funding for the creation of two new children’s homes at sites in Louth and Lincoln. “The new homes will provide high-quality facilities for children in care and will mean that fewer children will need to be placed in homes outside the county. This will ensure these children remain close to their local community and existing support networks, leading to better outcomes.” The Louth home will be located behind the Riverhead Theatre, on the site of the former Pilgrim School. Work to demolish the existing building is due to start on 7 November, with the home expected to be completed in late summer 2023, with the first residents arriving in autumn 2023.
 

East Riding council pave the way with first solar carport

Steve Fisher
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East Riding council pave the way with first solar carport
East Riding of Yorkshire Council recently completed a first-of-its-kind installation of a solar carport in Driffield. The installation is thought to be the first solar carport within the East Riding and certainly the first of its kind undertaken by the local authority. The carport houses 52.4-kilowatt peak (kWp) of solar photovoltaics (pv) along with two 7.4kW dual electric vehicle charging units. Solar pv is the generation of electricity using energy from the sun. The installation is expected to generate around 52,200-kilowatt hour (kWh) of electricity, reducing the carbon emissions associated with the site by 9 tonnes and reducing the centre’s electricity bills by almost £20,000 per year. The installation of electric vehicle (EV) chargers will also support residents of the East Riding in the transition to EV, minimising the range anxiety that can often be felt within a rural area. Range anxiety is the driver’s fear that a vehicle has insufficient energy storage (fuel and/or battery capacity) to cover the distance needed to reach their destination. The council’s asset strategy team was successful in securing funding from the European Regional Development Fund (ERDF) towards the installation of solar pv, a solar farm, a solar carport and EV charging units across the authority. The final strand of this scheme is the installation of a solar carport at East Riding Leisure Driffield. The leisure centre uses significant amounts of electricity, and the roof has already been subject to solar pv installations. The solar carport is seen as an innovative solution to allow the council to add additional renewable energy generation to supply the site. The scheme also includes two dual EV charging units which are available for users of the facility to charge their electric vehicles. The scheme cost in the region of £300,000 with almost 50% of the funding coming from ERDF. The council’s infrastructure and facilities team along with contractor JP Developers ensured the scheme was delivered on time, on budget and with minimal disruption to the centre users. Councillor Chris Matthews, portfolio holder for environment and climate change at East Riding of Yorkshire Council, said: “It is fantastic to see the installation of what is thought to be the first carport in the East Riding and certainly the first provided by the council. “This innovative solution allows us to continue to work towards realising the council’s net zero ambitions whilst also allowing ERL Driffield to reduce their electricity bills during this cost-of-living crisis. “I’m really pleased this work has been achieved with minimal disruption to our residents and now the people of Driffield have further EV charging units on their doorsteps.” Darren Jackson, general manager at ERL Driffield, added: “The solar carport is a really innovative way to generate green energy, tackle climate change and reduce our environmental impact. It’s a fantastic design that delivers on the environmental benefits without impacting on car park provision for our customers.”

Yorkshire warehouse sector heading for supply slump

Steve Fisher
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Yorkshire warehouse sector heading for supply slump
A lack of consented development land, coupled with rising construction costs and increased borrowing costs for developers, is likely to result in fewer big box developments coming through the development pipeline, according to the latest data from Lambert Smith Hampton (LSH). The company has found that the Yorkshire industrial property market is on course for a supply slump in 2023, with only 3.5 million sq ft of new space to be delivered across the region in the next 12–24 months. With developers facing rapidly rising construction costs and a further 5.5 million sq ft of industrial space likely to be put on hold, there is likely to be upward pressure on rents across the region. Q4 of 2022 is unlikely to offer any respite, with only a further 1 million sq ft of space to be delivered and just a couple of second-hand existing units available in the market. Scott Morrison, a director in LSH’s industrial & logistics team, said: “Unless a large wave of second-hand stock comes to the market, there is likely to be a marked drop off in supply. Annual requirements for large-scale (100,000 sq ft plus) industrial space throughout the region typically stands at around 5 million sq ft, so the current supply pipeline is falling well short of typical market demand.” Like most sectors, the industrial and logistics sector is likely to face challenges and some headwinds in the next 24 months with the economic background and rising costs. However, occupiers are warned to act now if they have lease events or need to upgrade or expand their facilities, or face increased competition and potentially higher rental values in the coming years. We have recently been appointed on Firethorn’s S42 scheme at Sherburn in Elmet which will deliver four units comprising 660,000 sq ft of new space. This comes on the back of being appointed on Arrow Point in Barnsley, which is nearing completion in December 2022, providing a combined 451,000 sq ft to the market across two modern units. Both schemes providing much needed stock to the market with high ESG credentials.

Doncaster sofa group sees demand bounce back

Steve Fisher
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Doncaster sofa group sees demand bounce back
DFS the Doncaster-based sofa group have seen revenues bounce back since their September statement over buyers remaining cautious, due in part to fears over disposable incomes and uncertain economic conditions. Since early September the company report a more positive trend, with Group order volumes growing relative to FY22 and also relative to the pre pandemic FY19 financial year. The company report that overall performance is in line with their “mid-case scenario (c.£36m PBT) for the full year”

Tim Stacey, Chief Executive, commented :“We are pleased to report that since mid September we have seen positive year-on-year order volume growth. While we continue to be watchful of the macro economic environment, we continue to take market share and our market leading position, inherent scale and proven strategy give us confidence in our future prospects.”

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