FHP SECURE ONE OF THE BIGGEST LETTINGS OF 2012 IN A DEAL OF REGIONAL SIGNIFICANCE


September 19, 2012

Industrial/Warehouse News

Acting on behalf of Scottish Widows Investment Partnership, Tim Gilbertson, Director of FHP is pleased to announce the disposal of prime high bay warehouse accommodation at Junction 26 of the M1 which has been let to Asda Stores Limited.

The deal concluded sees over 100,000ft² of prime space let to this blue chip covenant on a long term lease.

Offering prime accommodation the building was secured by James Darby of Colliers Birmingham office and will serve as Asda’s Nottingham base for their ever growing home delivery business.

At a time when the property market proves difficult and the economy overall is tough, this deal has local and indeed regional importance as it highlights again how prime well presented space is still a sought after commodity as stock levels remain limited throughout the Midlands.  This, coupled with the building being let to a blue chip covenant has hugely impacted in a positive way on the owners investment whilst creating a superb base for the continued expansion and success of Asda’s home grocery delivery business.

Tim Gilbertson commented:

“Having acted on various other units in the area for Scottish Widows for many years I was delighted to put this building to the market.  Rather than be daunted by the scale of the instruction its magnitude immediately appealed to me as it was clear from recent dealings that whilst demand across the warehouse and distribution sector is limited, equally the supply of high quality products such as this has been, and remains, poor.  This was borne out in two ways as the marketing and transaction progress. 

Firstly, the building was put ‘under offer’ within a matter of days of marketing commencing and this lead to a swift disposal being secured. 

Secondly, again due to the quality of this property and the lack of competing space available throughout the Midlands we had to turn away any number of seriously interested parties which is particularly disappointing at a time when demand remains generally still weak.

The dearth of high calibre big shed space in the East Midlands is becoming a real problem and we are seeing a continuing trend with potential occupiers of 100,000ft² plus being frustrated in an attempt to secure property as appropriate availability is simply not there.

As a result we are now witnessing some companies turn to the build to suit solution and whilst this offers a lengthier process to ultimately occupy and operate from an appropriate building it does spell good news for developers and inward investment around the region and hopefully the built to suit path may be followed by any number of occupiers in the near future.

I hope to be reporting shortly a significant build to suit letting of 60,000ft² in the region which again has arisen as a result of the lack of immediately available space. 

Whilst I still believe that speculative development is not yet on the horizon for most developers in the Midlands, certainly with the current stock level difficulties sooner or later a developer will be brave and commence speculative construction of large sheds and I believe that that if their timing is right their reward will quickly follow as not all operators can wait for build to suit opportunities to be constructed. 

We are though obviously delighted to have secured this disposal for our clients increasing significantly the value of their investment and equally we are sure that it will serve Asda well for their expansion in the region.”

Haseeb Hassan from Scottish Widows Investment Partnership commented:

“I am absolutely delighted with this letting and especially since this unit only became vacant at the start of 2012 when the previous tenant went into administration.  This was a huge void for the Fund and in the current climate where valuers are taking a bearish view on void periods and incentives the impact on the overall Fund performance was significant.  I was impressed by the way Tim at FHP remained confident of finding a tenant sooner rather than later and the proof in the pudding is how quickly he secured this tremendous deal for the Fund.  I wish Asda well in their new operations in the region and I think it is a fantastic story to the amount of new jobs it will deliver for the area.”

Asda Stores Limited were represented by James Darby of Colliers Birmingham office.

For further information or to see how FHP can help you secure and occupy for your building please contact the team on 0115 9507577.

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