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Industrial/Warehouse News
MIDLANDS property consultancy FHP has secured another major distribution deal along the M1 corridor, building on a track record which takes in transactions with some of the biggest names in business and the biggest sites in the region.
The latest deal has seen it agree terms for Menlo Worldwide Logistics to take 167,000 sq ft of space at The Core, the commercial and industrial development just off Junction 29 of the M1 at Temple Normanton in Derbyshire.
Menlo, a third-party logistics specialist which is part of the $5 billion US freight distribution giant Con-way Inc., is the latest in a series of major names to sign up for space at strategic locations close to the M1 in Nottinghamshire and Derbyshire. The past 18 months has seen Marks & Spencer take one millions sq ft at the East Midlands Distribution Centre at Castle Donington, Co-operative Group sign up to a purpose-built 477,000 sq ft distribution warehouse at Castlewood off Junction 28, and Asda take 100,000 sq ft just off Junction 26.
All of the deals have been handled by the commercial and industrial team at FHP, the consultancy acting for Royal London Mutual Insurance in the Menlo letting. John Proctor, director of the team, says that while the scale of the deals is a testament to FHP’s market expertise, it also demonstrates the increasing importance of the distribution industry to the East Midlands economy.
He commented: “From our own perspective, we’re naturally pleased to have secured another major distribution warehouse deal involving prestige clients. Over the past few months we’ve transacted more than 2.5 million square feet of space, which is a real tribute to the team.
“But the bigger picture is the increasing contribution which the logistics industry is making to the regional economy, which is only now being properly appreciated. For far too long the perception has been that this is an industry full of nothing but fully-automated, lights-off facilities providing little in the way of jobs. That’s a misplaced notion.
“The reality is different. The M&S facility at Castle Donington and the Co-op warehouse at Castlewood will employ in excess of 2,000 people between them. And that’s just two sites.
“While fully-automated facilities do exist they are the exception rather than the rule. That’s because the demands of customers are now such that logistics companies have to be able to provide a highly flexible service capable of delivering anything from a small individual item within 24 hours to a large shipment. The result is that the majority of distribution sites actually offer a high level of employment for a good range of skill sets from pickers, forklift drivers, the administrative and clerical management teams to the HGV drivers themselves.
“So the logistics industry is an asset to the East Midlands economy which should be appreciated more. It’s a competitive industry with some major players and we need to be doing everything we can to make sure they know we’re a well-placed location which understands and appreciates what they do,”
John Proctor negotiated the deal at The Core with Savills’ Birmingham office, which acted for Menlo. Full details of the transaction have not been disclosed, but it’s thought Menlo has signed up to a 10-year lease on the property, which sits on a stretch of the M1 which has easy access to the M18, A1 and A38.
John Proctor concluded: “This is an important deal for the region and it continues a national trend which has seen a marked increase in the take up of good quality distribution units throughout the UK. This was one of the last units which was constructed speculatively in the region and it has been frustrating to see a unit of such good quality in such a strong location waiting for an occupier.
“The market is now changing, though. There is now only a limited supply of good quality new distribution space on the market and occupiers are having to plan their future needs much further ahead – which means new facilities will inevitably have to be built to order. Fortunately, we still have a good range of well located distribution sites on the M1 corridor within this region”.