Gerald Eve property market score* Northern West Midlands rank 7/26 regions 1
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*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)
88%
69%
£8.43
5.5%
UK average 77%
UK average 54%
UK average £8.62
UK average 4.6%
Investment Investment transactions totalled £362 million during 2017, a small decrease on the volumes transacted in 2016, but significantly ahead of the regional average. Strong levels of inward investment from leading investors such as Tritax Big Box REIT, who have been very acquisitive in the region in 2017, have made this one of the most active regions for distribution warehouse investment.
Tritax completed 3 acquisitions in 2017 which accounted for the 66% of total investment transactions. Deals agreed were on good quality distribution warehouses in Tamworth, Stoke and Cannock and let to high quality tenants such as Morrisons, Marks & Spencer and Uniliver. As a result of such investor interest, we saw prime yields sharpen by 20 bps during the year.
Key investment transactions Location
Tenant
Purchaser
Price (£m)
Yield (%)
Birch Coppice, Tamworth
Morrisons
Tritax Big Box REIT
92.33
5.25
Prologis Park Sideway, Stoke-On-Trent
Marks & Spencer
Tritax Big Box REIT
78.50
5.13
Hickling Road, Cannock
Unilever
Tritax Big Box REIT
44.25
Centrum 100, Burton-Upon-Trent
Molson Coors
Private investor
33.40
5.01
Centrum West, Burton-Upon-Trent
Palletforce
UK CPT
22.20
5.80
Outlook
Key Contact
The amount of space reaching development completion in 2017 rose significantly to 3.2 million sq ft, strongly driven by purpose-built developments. These include the 877,850 sq ft purpose-built unit for the Ministry of Defence and the 562,000 sq ft Screwfix facility at Prologis Park, Fradley. We also recorded some speculative development in the year, including the 372,000 sq ft M6DC building by Graftongate at Kingswood Lakeside Business Park. There are currently 8 buildings under construction in the region, of which 5 are speculative. We expect that developers will continue to capitalise on the historically low availability rate of new or modern stock and develop space to satisfy latent tenant demand. This is likely to continue to drive rents and we forecast 2.6% annual growth over the next five years. 2018 is projected to see the strongest growth rate in rents given development activity and we forecast 3.7% growth this year. Prime headline rental growth forecasts
Northern West Midlands %, per year 2018-2022
2.6%
UK average %, per year 2018-2022
Jon Ryan-Gill Tel. +44 (0)121 616 4803 Mobile +44 (0)7961 820757 jryan-gill@geraldeve.com
2.6%
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