As expected given the overriding political and economic uncertainty, confidence in the commercial property market has been affected. However, the Industrial sector continues to buck this trend nationally and this has certainly also been experienced locally in Ashford, with continued demand on both a Leasehold and Freehold basis for units.
At the lower end of the market, there is strong demand from local independent users seeking units from which they can benefit from small business rates relief. In fact, when units at this level come to the market for rental we are often inundated with enquiries, such is the demand. In the past week alone we have completed on 4 & 17 Henwood Business Centre, Ashford, two units from which occupiers will benefit from small business rates relief. Various other units of this nature are currently in solicitors hands.
At the upper end of the market, we have received requirements from high profile companies seeking space from 10,000 sq ft upwards. There is considerable demand for distribution warehouses of this size, with a real lack of quality stock, if any, above this level. This may come as no surprise, given the move towards e-commerce and the resultant shift towards ‘last touch’ Warehouses from which retailers can distribute directly to consumers, or to a retail store.
In terms of Freehold opportunities, there is strong demand across all sizes given the under supply of stock, even more so than on a Leasehold basis. We have recently sold 100 Ellingham Way on Ellingham Industrial Estate, Ashford, which encompassed 8,857 sq ft GIA of industrial and ancillary office, with a yard of 0.416 acres. We were quoting offers in excess of £800,000 for the Freehold, but interest was extremely high and after going to best bids, we ended up achieving £930,000! Many prospective purchasers we met with mentioned how difficult they have found it to find any Freehold units locally, which was clearly demonstrated in the value achieved. Similarly, there is a scarcity of small Freehold units coming to the market and in recent times, we have achieved record high rates of £190 psf for vacant new build units of circa 2,000 sq ft, which is a significant jump from values being achieved even a couple of years ago on new build units.
Ashford’s location logistically has likewise made it a strong choice for many transport companies, with this demonstrated by the numerous units being taken my likeminded users at Waterbrook Park. This development has particularly caught the attention of many given its prominence being just off of Junction 10a is Waterbrook Park, which we are pleased to be acting on behalf of GSE Developments. In our previous article back in January we mentioned that 2 of the lettings had completed and since then, a further 4 deals have completed including to Dulux Decorating Centre. There are only two units remaining available to rent, and all Freehold opportunities are under offer.
We have various other opportunities in the pipeline, including new build units at Javelin Way, Ashford and another site in Folkestone. Whilst this may bring about an oversupply which will stabilise and potentially reduce values, developers are now often choosing to retain industrial units as investments due to their popularity.
In addition, investors have shifted away from other forms of investment in sectors such as retail due to the enhanced risk of secure income and also, in part, from straight office investments not benefitting from an immediate PD angle. This has further strengthened industrial yields.
If you would like to express your interest in the aforementioned schemes, please call our Ashford office on 01233 629281 and we would be happy to assist.