Valley of the Sheds

JUST FURTHER than halfway along the A14 motorway from Felixstowe on the East Coast to the Midlands – a familiar route for many an HGV driver – you’ll start to notice the pale clad walls of warehouses appearing and disappearing behind the trees at the top of the dual carriageway embankment. 

There has always been industrial and logistics activity along the A14 corridor but in recent years it has become more prevalent – especially around Kettering, Wellingborough, and Corby, in North Northamptonshire

It’s definitely an industrial heartland but not everyone would agree it is a core one along the lines of bases such as Lutterworth or Rugby, possibly because while the A14 is a key part of the strategic road network and is a main freight corridor, the majority of the logistics process tends to happen in huge regional and national distribution centres and fulfilment hubs in the Golden Triangle or else in Felixstowe, the UK’s biggest container port.

In the last five years or so it seems every industrial and logistics developer and investor has claimed a stake, GLP, Prologis, SEGRO, Tritax Symmetry, St Modwen and Logicor to name a few.

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The question has to be asked – why? For Collier’s director of industrial in Birmingham Tom Arnold the answer is simple – land availability.

“Because land availability has been so tight in the traditional Golden Triangle, developers have been pushing the boundaries. With floorspace supply falling and vacancy so low occupiers in recent years have not been able to be as picky and to secure space, so they have had to go further afield.”

CoStar’s director of market analytics Grant Lonsdale says: “There is a definite broadening of acceptable locational geography.”

Occupiers such as Amazon have embraced the challenge. These entities as well as requiring ever larger buildings and hence larger tracts of land to build them, also need a large pool of skilled workers preferably at a discounted rate of pay due to labour generally taking up the lions share of operational costs.

Ben Silcock, development manager, St Modwen

A combination of the availability of large tracts of land, a sympathetic planning regime and an abundance of workers in Kettering, Wellingborough and Corby have proved irresistible and it helps that as well as having discounted land prices for the developers, wages are also at a discount.

It is one of the first things that St Modwen development director Ben Quarrie, who is in charge of the group’s 900,000 sq ft St Modwen Park Wellingborough at Stanton Park scheme, impresses upon me when I visited on one of the rare sunny days in summer.

“Labour costs are at a definite discount in this area, with salaries close to or lower than the national average.”

The average weekly wage for North Northamptonshire is £592.10 while the national wage is some £642 for the rest of the UK according to official ONS figures. The average full time weekly wage for a warehouse worker in Corby according to job site Indeed is £414, for Kettering £444 and Wellingborough is £424.

It is not just the discounted wages in North Northamptonshire, GLP development director James Atkinson notes: “It’s also about the availability of the labour pool in an area, especially with it being so tight nationally.”

GLP is developing out its 400-acre Magna Park Corby scheme in the region. It pre-let a 650,000 sq ft warehouse to modular home manufacturer TopHat last year and is speculatively building a further 586,353 sq ft building as part of its first phase.

“While there may not be a pool of workers to fill every job within Corby, the job density among transport and logistics employees in the town is very low meaning a lot of them are commuting out to work – this is a workforce that could be working closer to home.”

Over in Wellingborough, Quarrie points out that St Modwen’s scheme is literally going to have labour on its doorstep. The commercial development is part and parcel of the overarching £1 billion Stanton Cross mixed-use extension to the east of the town which, as well as the St Modwen scheme, will also include 3,650 homes and community facilities in addition to a further 600,00 sq ft of retail and office space.

Around 42,000 people in the region are working in transportation, manufacturing, distribution, and storage – almost double the percentage of the UK average and of a population some 350,400, over 60 per cent of are of working age.

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The strength of this area as a logistics location can be borne out by Tritax’s decision to speculatively build out a 500,00 sq ft  warehouse at its 136-acre Symmetry Park Kettering development, a mere 15 minute drive up the A509 from St Modwen’s scheme in Wellingborough.

The decision was taken in July this year  and when I dropped in a few weeks ago work was well underway with the plateau visibly taking shape. Unfortunately, the day after my visit the news came that Buckingham Group – the construction contractor at Kettering – had gone into administration. Tritax construction director Ben Sanders, reports that development will stick to schedule with delivery of the facility in the Autumn next year: “Only site preparation works had commenced at Symmetry Park Kettering and consequently we have already engaged with our other approved contractors, which have delivered on other Symmetry Park schemes across the UK.”

Kettering 500 is cross dock building that has been designed to achieve a BREEAM Excellent and an EPC A rating. It is being built net zero carbon in construction.

It will feature two 50m yards and has 18m eaves as well as 96 dock and eight level access doors. The internal office will occupy the first and second floors over and undercroft.

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Elsewhere on site is the newly completed Unit 02 currently being fitted out for Iron Mountain and a fully serviced development plateau extending over 76 acres, capable of accommodating units up to 1.3m sq ft. Reserved Matters Consent has also been obtained a further building of 123,000 sq ft which could be delivered in less than 12 months from agreeing terms. 

Speaking to Tritax Symmetry development surveyor Charlie Mackaness during my visit we discuss whether the building will have a full PV array from the start he says that the property will be 100% PV enabled but will not have a PV array installed covering the warehouse until there are discussions with an incoming tenant. Similar to other Tritax Symmetry sites the scheme benefits from an on site energy centre. 

Grant Lonsdale, director of market analytics, CoStar

Tritax Symmetry development director Tom Leeming, says: “The installation of energy centres on our parks will provide tenants at the site with greater resilience, more competitive energy and a pathway to fully net zero carbon in occupation.”

The energy centre at its scheme in Biggleswade mixes a power hierarchy to provide to the Phase 2 tenants: PV generated power first then battery, grid (green energy), gas CHP (hydrogen enabled) and finally diesel back up. The EC has the ability to provide the four Phase 2 tenants in units totalling 577,000 sq ft, with power in ‘island mode’, i.e., independent of the grid. 

Ben Sanders, director of construction, Tritax

Not all developers go to these lengths, but nearly every developer is fully aware of the need to create power resilience on site.

St Modwen development manager Ben Silcock says: “There has definitely been a move from occupiers to secure more power in general going from an industry standard of 550 Kva to 2MvA and not being able to provide enough power is a deal breaker. An international occupier needed 2MvA of power and had two site options one could provide the power the other could not. There is no guessing which one the tenant opted for…”

At Wellingborough 184, on the first of the three phases at the St Modwen scheme, the developer is providing a 28,190 sq ft PV array across 40% of the roof space. Quarrie says: “That can produce 576Kw at peak if it is all used that would be a saving of £165,000 a year for the occupier off a rate of 30p per Kwh.”

While the scheme can provide 2MvA of power, the ability to secure some via a PV array not only saves the occupier money operationally it also boosts sustainability credentials and bolsters power resilience. The building which totals 183,624 sq ft has been built to BREEAM Excellent and an EPC A+ rating. It has 15m eaves as well as 12 dock and four level access doors and first floor offices totalling 9,691 sq ft of first floor offices. There is also a very smart  reception entrance and a separate first floor meeting room with full length glazing. The main employee car park is fully ducted to provide 100% EV charging.

St Modwen’s basic sustainability model known as Swan Standard, is implemented in its developments across the board and aims to ensure that any newly built individual asset in its property portfolio meets the highest sustainability levels right now and in the  years to come. Quarrie says: “We don’t know who will occupy this building, but we need to make it as future proof as possible. Perhaps they will use the car park for van parking and will need to charge them – it is the direction of travel after all.”

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GLP’s Magna Park Corby can provide up to 27MvA, which may seem excessive, but the scheme is targeting occupiers looking at XL warehousing of 500,000 sq ft plus. The developer has just put in planning for a further speculatively building of 1,003,799 sq ft on Plot MPC1, which totals 43.1 acres giving a site coverage of 53.45%.

The cross dock building will comprise 934,318 sq ft of warehousing, three storey offices totaling 47,921 sq ft as well as two transport offices of 20,107 sq ft. There will be a plant deck comprising kitchen and meetings rooms of 1,238 sq ft and a gatehouse.

The facility will boast 18m eaves, 147 dock and eight large dock  doors as well as eight level access doors. There will be 255 HGV parking spaces in addition to 795 car parking and 300 cycle spaces. It will be built to BREEAM Excellent and EPC A plus rating. 

Letting agents for Magna Park Corby are Savills and M1 Agency. 

The other advantage the area has over and above more core locations in the Midlands is that rents cheaper. Atkinson says: “The are is a discounted location on rent compared to say Lutterworth.” Rents in the area are guiding between £8.75 – £9 per sq ft according to research from Lambert Smith Hampton compared to £9.50 -9.75 per sq ft elsewhere for warehouses of 100,000 sq ft and above.