New venture will help firms benefit from industrial property boom
With record demand for industrial property and the North West facing a shortage of supply, two advisory firms have joined forces to launch a new service to help companies take advantage of the rising prices.
The joint venture between Warrington-based Dow Schofield Watts and B8 Real Estate is aimed at helping property owners, occupiers and private equity firms to assess their position and consider ways to raise funds and reduce costs.
According to B8’s figures, occupier take-up of larger industrial and warehouse units (over 90,000 sq ft) in the North West rose by 43% last year to a record 5.2m sq ft.
With a further 2.5m sq ft under offer and only six to 12 months’ supply of new build or top grade units available, it says there is a very real prospect of shortages ahead.
Meanwhile, demand from investors is also strong. The total value of deals in the region last year was £695m, an increase of 37% on 2019.
Simon Wood, director of B8 Real Estate, said: “The industrial and distribution property market is at previously unseen heights.
“Demand from occupiers is not only coming from e-commerce firms such as Amazon. Parcel delivery companies are building their network of warehouses, medical suppliers are seeking more space, and supermarkets and consumer goods firms are increasing inventories and stock levels.
“Following the disruption to supplies earlier last year and now being seen through the Brexit restrictions, they know they can’t rely on just-in-time deliveries.
“On the back of Brexit there are also strong signs of a move to ‘onshoring’ manufacturing, particularly in the North with its cheaper land values, good labour supplies and power availability.
“In terms of investors, as well as traditional UK buyers there are huge flows of overseas institutional money seeking opportunities in the sector and no signs of this abating. This huge surge in demand has increased competition, but it does put existing owners and occupiers in a very good position.”
The partners believe the buoyant market could open up new options for businesses – for example to raise debt funding, release cash via a sale and leaseback or reduce costs by downsizing or relocating.
The new service will provide a one-stop shop for industrial property advisory services, including corporate finance, debt fundraising and tax advice.
James Dow, founding partner of Dow Schofield Watts, said: “These unprecedented levels of demand for industrial space, coupled with a relatively ‘fixed’ supply of industrial property, has created real balance sheet appreciation for many clients.
“Combining the skills of B8RE and Dow Schofield Watts, this new service line will help those clients access the value in these assets more strategically and effectively. The current industrial property market can rightly be regarded as a golden financing opportunity.”