Since March 2020, the pandemic has had a dramatic effect on the commercial property market and for long periods of time, during various lockdowns, many shops and offices remained empty, unable to open due to the restrictions put in place to combat Covid-19.
The industrial and distribution market has, however, enjoyed a period of growth that reflects the increases in demand, particularly for warehouse and distribution properties, in reaction to the demands placed on the supply chain by online shopping.
This explosion of online retail witnessed during the pandemic has been well documented, but what is less well understood has been the demands placed upon manufacturers, distributors and third-party logistics companies. The need for rapid delivery and fulfilment services has placed a particular challenge for what is known as “last-mile delivery”, which has seen high levels of demand from warehouse operators looking for regional and local distribution hubs that act as satellites within a national distribution network and serve the local area.
Due to its location, accessibility to the M3, M4, A303 and the National motorway network, Basingstoke has witnessed a particularly strong demand for suitable industrial properties during this period. A further factor in the demand for distribution properties in the Basingstoke area is the local supply of staff; those experienced in operating within the warehouse environments, but also the qualified forklift operators and HGV drivers.
In recent months, London Clancy has seen several key transactions in the Basingstoke market, along with the development of new logistics properties.
"Activity levels have been high throughout the pandemic," says Russell Ware of London Clancy, adding "Key transactions that illustrate this include the lettings of the 37,500 sq ft Horizon 5 and Unit A Antura (14,500 sq ft) on Kingsland Business Park, which have been let to DPD and BakedIn, respectively.
“The letting of Horizon 5 was completed prior to practical completion and established a new top rent for the town, on institutional terms, of £12 per sq ft per annum and BakedIn, which is a fast growing online retail business, took Unit A Antura during the first lockdown in Q2 2020, following a refurbishment of the property.
"With levels of demand remaining high, and a number of properties are coming onto the market soon, we expect the market to remain strong in the long-term,” he adds
.Properties that will become available over the next few weeks include two others on the Kingsland Business Park; Horizon 4 and D Lutyens.
Horizon 4, which fronts Wade Road and totals 23,176 sq ft, includes nearly 6,000 sq ft of office accommodation, making it a desirable HQ facility close to both the M3 and the A33. D Lutyens, which totals around 9,750 sq ft, has undergone a substantial refurbishment to bring it to a Category A standard, which is reflected in the quoting annual rent of £10.95 per sq ft.
Elsewhere in Basingstoke, a range of brand-new, distribution properties will also come to the market, with the imminent completion of St Modwen Park on the Viables Industrial Estate, where three properties totalling 186,340 sq ft are under construction. The three detached properties are just 2.2 miles from the motorway junction and each has a secure yard area and internal heights of between 10 and 12.5 metres. Completion is due within a few weeks.
"St Modwen Park, when complete, will provide some of the very highest specification industrial and warehouse accommodation in the entire south-east of England," says Russell.
"It is no surprise that the properties have already been gaining a great deal of interest from the local, regional and national markets."
While there have been several transactions during the pandemic, with a high level of demand for industrial and distribution space, the supply of such properties in the Basingstoke market has meant that the town still provides good value for money compared to other locations in the south-western corridor, which have lower levels of availability.
"Inevitably, there has been upward pressure on rents due to demand," says Russell. "However, with properties available at annual rents from between £9 and £12 pounds per square foot, Basingstoke continues to attract a wide variety of businesses involved in storage and distribution, which is great news for the town’s reputation as a first-rate business destination," he concludes.