£30m sale of B&M HQ is biggest industrial investment of 2011, says report

THE UK’s industrial property market is continuing to witness robust demand, with almost 10.4m sq ft of space acquired during the first half of the year, according to research from CB Richard Ellis.

North West deals accounted for 12% of this total – or around 10.5m sq ft. The biggest single industrial deal completed in the region was the 360,000 sq ft letting at Gazeley’s G.Park in Liverpool to DHL.

The number of investment deals completed during the first half was actually lower than last year, with RREEF’s £30m sale-and-leaseback deal on B&M Bargains’ 600,000 sq ft The Vault headquarters and distribution base in Speke the largest to complete in the North West.

The deal provided the second major windfall in a year for B&M Bargains’ owners Simon & Bobby Arora following the £45m sale of the Opus Homewares business by family members and trusts to B&M Bargains in August 2010.

Rehan Zaman, director of Capital Markets at CBRE North West, said: “In terms of where investment is coming from, UK institutions and overseas investors were responsible for the bulk of money invested in the sector so far this year.

“Investment demand has been increasingly polarised, with investor interest focused on the prime end of the market, invariably for assets with unexpired lease terms of 15 years and above, let to strong retail covenants with fixed rental uplifts to provide certainty of future income.”

Mike Walker, senior director of Industrial Agency at CBRE North West, said:  Trends within the North West Logistics market have tended to replicate the overall national picture.

“The encouraging signs are the continuing take up of new units such as DHL taking 360,000 sq ft at Gazeley`s, G Park Liverpool, and the two remaining 200,000 sq ft units at CBRE Investors’ Revolution scheme in Chorley going to Conair and Golden Acre Foods.”

He added: “Another encouraging trend is the emergence of the design and build market as evidenced by Waitrose agreeing a 440,000 sq ft deal at Matrix Park in Chorley.

“We envisage that because of the encouraging take up of existing new space and the consequent lack of supply of modern existing space, the design and build market will continue to improve in the second half of the year.“

Click here to sign up to receive our new South West business news...