Gerald Eve property market score* Gloucestershire and Worcestershire rank 24/26 regions 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
*see Glossary for definitions of scoring methodologies
Distribution market
Labour market
Average population within 4.5 hour HGV drive time
Average population within 2.5 hour HGV drive time
Average cost of a warehouse/forklift operative (per hour)
Unemployment rate (% working age)
87%
72%
£8.72
3.9%
UK average 77%
UK average 54%
UK average £8.62
UK average 4.6%
Investment Since this is not one of the most established warehouse markets, the volume of investment transactions has a history of being erratic. During 2017, £88.5 million was traded within 18 individual deals; only four of which are classified as distribution warehouses.
The most important deal in the region was the acquisition of a Worcester Six property by Liberty Properties Plc for £13 million at a 5% yield. The transaction marked the lowest yield achieved in the region and is indicative of the level of investor interest in prime schemes, which has forced average prime yields to sharpen by 25 bps during 2017.
Key investment transactions Location
Tenant
Purchaser
Price (£m)
Yield (%)
Worcester Six, Worcester
Kimal
Liberty Properties Plc
13.00
5.00
Corinium Centre, Cirencester
Undisclosed tenant
Berry Hill Ind Estate, Droitwich
DHL
Paloma Real Estate Fund 1
8.40
5.58
Harworth Group Plc
5.20
8.15
Ashchurch Ind Estate, Tewkesbury
Restore
F&C Property Growth
3.59
6.15
Blaisdon Way, Cheltenham
Nationwide Crash Repair
F&C Property Growth
2.00
7.06
Outlook
Key Contact
Worcester Six is emerging as a prestigious industrial estate, with planning consent granted for 1.5 million sq ft of B1, B2 and B8 uses. As part of the scheme a speculative development of 163,000 sq ft has been completed by Stoford Developments and a 140,000 sq ft pre-let unit for Kimal Plc‘s headquarters is expected to commence construction in early 2018. Going forward we expect key schemes to maintain upward pressure on prime rents after a prolonged period of stagnation, especially given the fact that the region had a particularly low availability rate of 2.5% at the end of 2017. We forecast 1.8% annual average rental growth for the next five years, with the potential for greatest growth in the next couple of years as increased levels of development at key schemes come through in the region. Richard Gatehouse Tel. +44 (0)29 2038 1863 Mobile +44 (0)7710 171854 rgatehouse@geraldeve.com
Prime headline rental growth forecasts
Gloustershire and Worcestershire %, per year 2018-2022
1.8%
UK average %, per year 2018-2022
2.6%
39