Real estate report: Industrial investment continues to grow

It was once home to the trading estate run by the late Blackburn Rovers owner Jack Walker – an empire built on steel.

Decades later, the Walker Industrial Estate, which sits at Junction Five of the M65, is owned by an overseas investor, bought in a high-profile deal late last year hailed as a ” meaningful vote of confidence” in the local economy.

The acquisition by a San Francisco-based investor is also seen as further evidence of the growing demand for industrial space in Lancashire – and the growing eagerness of commercial property companies to invest in the county.

The Walker site was purchased by 4th Industrial, backed by US-based TPG Real Estate Partners, which currently has around $6.4 billion in assets under management.

B8 Real Estate acted as agents for the buyer. Simon Wood, its chief investment officer, says competition was tough for the industrial park, which was sold for an undisclosed sum.

He says: “Lancashire has a vibrant industrial base which is driving demand for space along the M65 corridor from Chorley to Blackburn. We particularly liked the Walker estate because of its excellent layout and opportunities to add value.

“This deal demonstrates how major overseas investors are increasingly willing to look beyond the M6 ​​corridor and make significant investments in industrial areas like Blackburn. As such, it represents an important vote of confidence in the northern economy.

The 21.3-acre site was redeveloped by the Walker family following the sale of their business to British Steel for £330 million in 1989. At that time it was the highest amount ever recovered for a private enterprise.

Today the Walker Industrial Estate is home to eight fully let units totaling 324,340 square feet of space with a total annual rental income of £1.49m.

Tenants include Wincanton, Perspex International, Steel Dynamics, NeoNickel (Blackburn), Pentland Wholesale and Carlisle Interconnect Technologies.

It’s not just the big industrial sites that are attracting the attention of investors. An acquisitive property investment group added to its portfolio in February this year, after acquiring three new commercial properties in central Lancashire.

PJM Property Investments has acquired Cuerden Green Mill in Lostock Hall and units at Charnley Fold Lane in Bamber Bridge, while one of its group companies, MM Acquisitions, has purchased Gaskell House in Rough Hey Road, Preston.

Cuerden Green Mill is a 32,000 square foot industrial premises located in the Sherdley Road Industrial Estate. The currently vacant property is being renovated before being re-let.

Its investment in Bamber Bridge comprises a mix of business units. PJM plans to work with existing occupants to revamp and renovate the site and attract new businesses.

And Gaskell House, located in an industrial estate on the outskirts of Preston, is a 56,000 square foot property comprising a warehouse, large yard and newly refurbished offices. No figures were given for the transactions.

PJM Director Patrick Murphy says, “The demand for good warehousing space is high. Our model is based on the acquisition, adaptation and modernization of tertiary premises in order to make them attractive to new occupants.

“These three properties will help us support Lancashire’s economy by providing viable space for growing businesses in thriving locations.”

Manchester-based Property Alliance Group has also been active in Lancashire. In January, it acquired a 32,166 square foot industrial unit in Blackpool for £1.3million.

Located next to Blackpool Retail Park and south of the town center off Squires Gate Lane, the property is a warehouse with offices. Alliance plans to spend £250,000 on its refurbishment. Ian Hunter, Director of Property Alliance Group, said: “As part of the corporate area of ​​Blackpool Airport and approximately two miles from the M55, the unit is located in an up-and-coming area. We are convinced that its location combined with the quality of our renovation will result in a quick rental. “This is our first acquisition in Blackpool and with the rapid development of the Enterprise area, we are looking for further investment opportunities in the coming year.”

Growth in the industrial sector continues to intensify, with the availability of units failing to keep up with demand – a national trend reflected in Lancashire.

Industry watchers say the wider North West market is characterized by a significant supply shortfall and strong occupier demand, which has led to rising rents.

B8 Real Estate reported that 2021 saw 106 investment deals in the area worth a total of £1.3bn, an 86% increase on 2020, while lettings activity increased increased by 16% and base rents by 7.4%.

Danny Pinkus, a partner at Preston-based property consultants Robert Pinkus and Company, says investors are turning to places like Lancashire because prime markets such as Manchester and Liverpool have become “quite heated”. They also seek to create more value.

However, he says, “There’s not a huge amount to watch. The main problem is usually the lack of vacant opportunities. We just need more stock.

Danny adds: “Demand from developers and homeowners for employment land in Lancashire is still very strong, but sites don’t come up very quickly.

“If we are not careful, the money will be spent elsewhere. The speed at which the earth moves is a major problem, it just takes too long.

“The cost of construction also continues to rise, making it difficult for developers to firm up prices. Delays cause real problems.

“Another issue is that a number of good job sites have shifted to housing, which appears to have been more of a priority for some local authorities, at the expense of business.”

Caroline James, managing director of Trevor Dawson, a commercial property consultant based in Blackburn, says foreign investors are increasingly interested in Lancashire.

She adds: “The perception of the M65 corridor is improving, especially since Frontier Park has established itself as a logistics destination.

The £100million business park on the Hyndburn/Blackburn border near Junction 6 of the M65 has been a major success story.

Caroline says the arrival of the National Cyber ​​Force headquarters in Samlesbury, near BAE Systems’ new advanced manufacturing research center and military aircraft factory, will also bring spin-offs.

However, she echoes warnings about the lack of venues and adds: “We need to provide opportunities, we will lose in other areas if we don’t.”

Some projects are progressing. Planning approval has just been given for a 55,570 square foot multi-tenancy industrial project in the Old Mill Industrial Estate in Bamber Bridge.

Industrials REIT will transform its existing estate by redeveloping a former industrial building and using vacant land to create 44 new light industrial units.

Once operational, the scheme is expected to provide an annual boost of £3.8m to the Bamber Bridge area.

Paul Batho, Senior Director of Development at Industrials REIT, says, “The highly sustainable design allows for flexible unit sizes and meets the unprecedented demand we are seeing for new space in this sought-after, well-connected area.

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