Trade operators still biting says Mucklow
BLACK Country property developer and investor A & J Mucklow Group says the Midlands industrial occupier market is showing some encouraging signs of improvement.
In its interim management statement covering the period from the start of the year to May 15, the Halesowen-based firm pointed to a number of new lettings during the period.
Chairman Rupert Mucklow said there had been particular interest from trade operators and that the firm has recently agreed to new lettings to the likes of
Howdens, Screwfix, Euro Car Parts and City Electrical.
“However, our vacancy rate has increased marginally, from 6.5% to 6.9%, mainly due to the planned return of two large industrial units in Birmingham, totalling 60,000 sq ft,” he said.
Mucklow said rental levels and letting incentives are starting to harden for better quality properties, as tenant demand picks up and availability of modern space reduces.
“Two investment properties were acquired during the period at a total cost of £5.8m,” he said.
“The properties currently generate a combined income of £0.54m per annum and show an average return on cost of around 9.3%. First in February 2012, we acquired a 15,800 sq ft office building in Coventry for £1.5m. The property was built in 2000 to a high specification and is currently let at a rent of £0.24m per annum.
“Subsequently in April 2012, we acquired a modern 64,300 sq ft industrial unit in Tewkesbury for £3.95m. The property is located close to junction 9 of the M5 motorway and has recently been let on a 15 year lease at an initial rent of £0.30m per annum, increasing to £0.34m per annum at the end of the fifth year.”
Mucklow’s joint planning application with Helical Retail for a mixed use development in Tyseley was approved by Birmingham City Council on April 26.
“We will benefit from having five acres of industrial land being re-zoned for non-food retail and a new ‘spine’ road, which will greatly improve the prominence of our 20 acre site,” Mucklow said.
