Our biannual report offers fascinating insights into the industrial and logistics market this year to date.

1. MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
JULY2019
Haydock Industrial Park

2. MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
JULY2019
Venus 217, Knowsley
AT A GLANCE… INVESTMENT
£205M of NW industrial property investments transacted in H1 2019. Down 55%
on H1 2018 (£453m)
Significant amount of deals under offer (£95m - 15 deals) and due to
complete shortly.
Activity subdued, particularly in Q1, with supply hit harder than demand.
Pricing in certain sub-sectors appears to have softened slightly compared
to the 2018 peak.
Continued appetite for speculative funding but confined to prime locations.
The fundamentals of the NW industrial investment market remain strong
and we expect a slight rebound in H2, should BREXIT be resolved in an
orderly manner.
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3. F2G Multiply, Logistics North, Bolton
AT A GLANCE... OCCUPATIONAL
NW take up for units > 90,000 sq ft totalled 951,000 sq ft in H1 2019. Down
50% on H1 2018 take up level.
Brexit uncertainty lead to occupier caution in H1 although we anticipate
a stronger H2 with close to 1.6m sq ft in solicitors’ hands and increased
occupier activity.
Stronger occupier demand for good quality accommodation within the 90,000
– 170,000 sq t size range.
Continued speculative development for both big box and SME /
multi-let schemes.
Consistent demand for new build/Grade A units within 15,000 – 50,000 sq ft
size range.
Prime Big Box Rents established at £6.25 - £6.75 per sq ft.
Prime SME/Multi-let rents established at £7.50 - £7.75 per sq ft.
JULY2019
MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
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4. MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
Parkway 4, Trafford Park
H1 2019 INVESTMENT MARKET SUMMARY
• The total value of NW industrial transactions during H1 2019 stood at £205M (26 deals), which
is down by 55% compared to H1 2018 (£453M across 43 transactions). The five year average
for H1 stands at £320M.
• The reduction in volume has been most significant for larger lot sizes, with only £116M of units
>95,000 sq ft transacting, across four transactions. There has also been a significant
reduction in the larger portfolio sales which were so prevalent in 2018.
• Key transactions in H1 2019 include Apollo Park, Crewe (£14.7M – 5.35%), Eddie Stobart,
Warrington (£39.5M – 4.80%), The Cube, Runcorn (£10.6M – 8.65%) and Tesco
Distribution, Widnes (£58M).
• Activity has been subdued partly due to BREXIT. Whilst this has had somewhat of an effect
on demand, it appears to have hit supply harder, with many investors not willing to bring
assets to the market whilst the wider political and economic uncertainty remains.
• There is growing sentiment that the industrial investment market may have peaked in 2018
(particular for logistics yields), which has further exacerbated the effects of BREXIT.
• Pricing at the prime end is difficult to gauge due to a lack of recent transactional evidence.
We currently consider prime 15 year North West distribution/logistics yields to be in the
region of 4.50%, a discount of 25bps to last year.
• Overall pricing appears to have softened slightly in some sub-sectors, compared to the
2018 peak, with a number of assets withdrawn from the market as bids have not matched
vendor’s aspirations. There appears to be a slight mismatch between buyers’ and sellers’
aspirations for certain assets.
• There is a lot of investment stock currently under offer (circa £95M / 15 deals). A number of
these have been under offer for some time, with transactions currently taking longer than
usual to complete. The £485m traded in H2 2018 will however be hard to beat!
• There is still some appetite for speculative development funding, but interest is confined to core
locations. Some investors / developers are cautious following over supply in other regions,
but this is misleading for the North West.
• The fundamentals of the North West industrial market remain strong and we expect that
there could be a slight rebound in H2.
TABLE 1: NORTH WEST YIELD PROFILES
CLASS VALUE TREND
Prime Distribution (15 year assumed term) 4.50%+
Secondary Distribution 5.75%+
Older Secondary Distribution 7.25%+
Prime Industrial Estate 5.00%+
Secondary Industrial Estate 6.25%+
Multi-let Break Ups 9.00%+
TABLE 2: INVESTMENT TRANSACTIONS OF NOTE H1 2019
ADDRESS DATE
AREA (SQ FT)
(000S)
TENANT
APPROX. TERM
CERTAIN
PURCHASE
PRICE
YIELD
SINGLE LET
Tesco, Runcorn Q2 2019 528 Tesco 15.00 £58.00m Conf.
Kerry Logistics,
Trafford Park
Q2 2019 62 Kerry Logistics 5.00 £4.45m 6.25%
Crown Records Management,
Trafford Park
Q2 2019 42
Crown Record
Management
2.00 £3.08 5.58%
Eddie Stobart, Runcorn Q1 2019 365 Eddie Stobart 17.00 £39.51m 4.80%
The Cube, Runcorn Q1 2019 152 Movianto 1.50 £10.68m 8.65%
Neovia Logistics,
Irlam
Q2 2019 195
Neovia
Logistics
2.75 £15.08m 5.25%
MULTI LET
Penketh Business Park,
Warrington
Q1 2019 148 Multi-let 2.50 £5.95m 8.81%
Etherow Industrial Estate,
Glossop
Q2 2019 201 Multi-let 3.00 £6.50m 9.84%
Apollo Park, Crewe Q1 2019 125 Multi-let 8.36 £14.70m 5.35%
Bromborough Point,
Bromborough
Q1 2019 131 Multi-let 3.35 £3.85m 10.52%
JULY2019
Stable Improving Declining
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5. H1 2019
MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
Parkway 4, Trafford Park
JULY2019
FIGURE 1: NORTH WEST INDUSTRIAL INVESTMENT TRANSACTIONS
H2 2013 H2 2014H1 2013 H1 2014 H2 2015
£Millions
300
200
100
0
400
H1 2015 H1 2016 H2 2016 H1 2017 H2 2017
500
H1 2018 H2 2018
M6 Epic 50, Wigan
FIGURE 2: PROPORTION OF NORTH WEST INDUSTRIAL SALES BY VALUE Big Boxes
Multi-let Estates
61%
20%
Smaller Warehouses
19%
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6. MID-RANGE UNITS AND SMALL MULTI-LETS (BELOW 90,000 SQ FT.)
• The SME sector has seen consistent demand in H1 for both new build and good quality
refurbished accommodation. There has been particularly strong demand for new-build/
Grade A units in the 15,000 - 50,000 sq. ft size range highlighted by deals at Aurora,
Stockport; Mere Grange, St Helens and Kiwi Park, Trafford Park (see Table 4).
• SME speculative development continued during H1 with a further 1.1m sq. ft under construction/
committed (17 schemes) including Mersey Reach, Aintree by Chancerygate (33,500 sq ft
over 2 units); Birchwood Park, Warrington by Patrizia (170,000 sq ft over 5 units) Haydock
60 by Caisson/Patrizia (60,000 sq ft – single unit) and Carrington Gateway by Himor
(108,000 sq ft over 5 units).
• The majority of new speculative development is for units over 15,000 sq. ft with demand
for the smaller size range (5,000 – 15,000 sq ft) continuing to be met by good quality,
second-hand refurbished accommodation. This has led to continued rental growth and low
void rates for multi-let estates across the North West with second-hand rents in prime
locations such as Trafford Park and Warrington now achieving in excess of £6.50 per sq ft,
equivalent to new build rents in 2014.
• Prime new build rents are now established at £7.50 - £7.75 per sq. ft. Prime second-hand
rents are at £6.75 - £6.95 per sq. ft.
RENTS CURRENT QUOTING
Prime Distribution
(10 year assumed term) £6.25 - £6.75 £6.25 - £6.95
Secondary Distribution £5.00 - £5.75 £5.50 - £6.00
New Build 10 – 15,000 sq. ft. £7.50 - £7.75 £7.75 - £8.00
Modern 10 – 15,000 sq. ft. £6.75 - £6.95 £7.00 - £7.25
Older 10 – 15,000 sq. ft. £5.75 - £6.00 £6.00 - £6.25
LAND VALUES LAND VALUES
Prime Site £600,000 - £650,00
Secondary Site £350,000 - £400,00
Tertiary Site £200,000 - £250,000
TABLE 3: NORTH WEST RENTAL LEVELS
H1 2019 OCCUPATIONAL MARKET SUMMARY
BIG SHEDS (OVER 90,000 SQ FT)
• H1 2019 take-up for units > 90,000 sq ft totalled 951,000 sq ft (7 transactions), down
50% on the 2.0m sq ft (11 transactions) recorded in H1 2018.
• Brexit uncertainty has undoubtably increased occupier caution, however, with almost
1.6M sq ft in solicitors’ hands, several unsatisfied high profile requirements in the market and
the continuing growth of e-commerce, we anticipate much stronger take-up levels in H2.
• Notable deals for H1 include the letting of a 102,500 sq ft speculative new build unit at Icon,
Manchester Airport to ALPHA LSG, the letting of 145,000 sq ft refurbished space to
Law Distribution at Millfield Lane, Haydock and the freehold sale of a 126,000 sq ft
modern unit to Alpla at Stone Cross, Golborne (see Table 4).
• 28% of take-up (270,000 sq ft) involved new build/design & build units with 56%
(535,000 sq ft) involving modern second-hand refurbished accommodation highlighting
clear occupier demand for good quality space.
• All H1 transactions comprised units within the 90,000 – 170,000 sq ft size bracket highlighting
continued occupier demand for this size. Transactions involving larger units were hindered by
a mixture of Brexit caution and a lack of supply.
• Online retailers and distribution occupiers again dominated take up, accounting for all big
box transactions in H1. That said, there are some larger B2 manufacturing requirements in the
market as occupiers prepare for Brexit related changes to the UK supply chain.
• H1 has seen continued speculative big box development in the North West with 7 new
speculative units > 90,000 sq ft completed (2.0M sq ft) and a further 5 schemes
(540,000 sq ft) committed/under construction compared to the 12 schemes (2.0m sq ft)
completed/under construction in the same period last year. Over 85% of the schemes
completed in H1 involved units above 200,000 sq ft as developers/funds look to address the
supply shortage and increased occupier demand in this size range.
• The third party logistics market was notably quiet in H1 despite reporting very little available
space within their portfolios and ongoing customer discussions. We expect this to result
in increased 3PL take up in H2.
MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
JULY2019 B8RE.COM

7. MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
JULY2019
Hurricane 47, Speke
SCHEME DATE SPECIFICATION
AREA
(SQ FT)
TENANT
ACHIEVED RENT
(PER SQ FT)
Q103, Unit 6 Broadgate,
Oldham Broadway
Business Park, Manchester
Q1 2019
Refurbished
modern unit
103,781 ADI Gardiner £5.00
The Cube,
Whitehouse Industrial Estate,
Preston Brook
Q1 2019 Modern unit 151,769 Movianto £6.50
ICON,
Manchester Airport
Q2 2019 Speculative new build 102,500 ALPHA LSG £6.75
Millfield Lane,
Haydock Industrial Estate,
St Helens
Q2 2019
Refurbished
second-hand unit
145,060 Law Distribution
£4.50
B8 advised
P150 Winsford Q2 2019 Modern unit 153,917 Warehouse One £4.85
Stone Cross 126
Golborne
Q2 2019 Modern unit 126,016 Alpla £85.00
ICON,
Manchester Airport
Q2 2019 Design and Build 168,000 HTG Group
FH sale -
Confidential
SMEs/MULTI-LET
203 Cavendish Place,
Birchwood, Warrington
Q1 2019 Grade A 15,000 Allied London
£6.95
B8 advised
203 Mere Grange, St Helens Q1 2019
Speculative
New Build
24,165
Kilwaughter
Minerals Ltd
£6.50
B8 advised
Europa Point, Warrington Q1 2019 Grade B 46,000
Bridgewater
Community
Healthcare
£7.00
B8 advised
Unit 11 Premier Park,
Trafford Park
Q2 2019 Grade A 8,486 NRI Europe Ltd
£8.10
B8 advised
Unit 2 1a Wilson Road, Huyton Q2 2019 Speculative New Build 15,000 Arcola Energy
£6.50
B8 advised
Unit G Aurora,
Stockport
Q2 2019 Speculative New Build 15,324
B & H
Engineering
£7.50
Unit 1 Kiwi Park, Trafford Park Q2 2019 Grade A 37,302
Sanzoom
International Ltd
£6.95
B8 advised
Pioneer Court, Blackburn Q2 2019 Speculative New Build 61,330 Tek-Dry
£6.00
B8 advised
Unit 1 Merlin Park, Trafford Park Q2 2019 Grade A 62,108 Green Group
£6.50
B8 advised
TABLE 4: OCCUPATIONAL TRANSACTIONS OF NOTE H1 2019
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8. MARKETUPDATE
NORTH WEST INDUSTRIAL & LOGISTICS
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FOR FURTHER INFORMATION
PLEASE CONTACT:
Hurricane 47, Speke Academy Business Park, Knowsley
Boston Park, Haydock Kingfisher Business Park, Bootle
Unit 1 Merlin Park, Trafford Park Venus 217, Knowsley
6550 Daresbury Park
JULY2019
E: simon@b8re.com E: johnb@b8re.com
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