More than 1m sq ft changed hands in 2016, totalling £92m across 27 deals, according to Warrington & Co’s nineteenth property review.
The document provides analysis of the Warrington property development and investment market.
According to the report, compiled by BE Group, over half of the £92.1m traded in investment deals was generated through industrial transactions.
The largest industrial deal in 2016 was achieved at Winwick Quay with Aberdeen Asset Management’s purchase of the AAH Pharmaceutical’s facility for £13.9m. The unit totals 160,000 sq ft and represents a net yield of 5.31%.
The total investment in Warrington stands as the sixth largest for a single year and, at 27 deals, marks the second highest level of transactions in a single year since 1999. However the £92.1m investment is significantly lower than seen in the previous two years, with 2014 seeing an investment of £400m involving 32 deals and 4.7m sq ft, while in 2015 £160m was invested involving 21 deals and 1.7m sq ft.
Industrial deals accounted for the largest uptake of space and value with a total of 850,000 sq ft completing across 2016, amounting to £50.6m.
The shortage of industrial floorspace, highlighted in the council’s Employment Land Review, also produced by BE Group, suggests that the town has an industrial vacancy rate of just 4.4%. At 350,000 sq ft, this is less than one year’s supply. This shortage has caused yields to drop as investors compete for property.
Woolston saw the greatest number of industrial transactions, however the two largest deals were completed on sites at Omega, with a 360,000 sq ft building sold to a buyer understood to be Amazon and 120,000 sq ft site sold to Domino’s Pizza.
The year’s highest rent, topping £7.43/sq ft, was achieved at Birchwood Park with Patrizia letting 711 Cavendish Place to Bathgate flooring, continuing Birchwood Park’s trend of setting the prime industrial rental levels for the town.
The office market showed an increase of 20% in total floor space transacted, as well as an improved average deal size of 7,100 sq ft with lettings to Muller, Canon and Ofcom. Smaller lettings of between 2,000 sq ft and 4,000 sq ft accounted for 42% of all those completed.
The largest transaction of office space was the letting of Allday House in Birchwood, with the Nuclear Decommissioning Authority taking a new lease on the 52,000 sq ft headquarters building which will house the project team for Sellafield, one of Birchwood’s biggest occupiers.
The report said that 615 homes were built in 2016, with nearly half of those built in the town centre.
A £2.5bn deal was announced which will see Warrington-based housing association Your Housing partner with WElink to see the creation of 25,000 solar-powered flat pack houses. The joint venture will also involve finance from the China National Building Material Company.
The town centre’s redevelopment is underway with Time Square’s temporary market hall due to complete construction this week. This marks the initial stage of the £107m development, due to be completed in 2019.
Plans to redevelop Junction of 8 of the M62 are also moving forward, with work commencing on the £12m scheme in partnership with Highways England and Cheshire & Warrington LEP.
The upcoming HS2 and HS3 have caused interest in the Bank Quay Gateway and development for an improved and expanded railway station is in the pipeline.
The Warrington Annual Property Review is commissioned by Warrington & Co, Warrington’s partnership for driving growth.
Sponsors of the 2016 review are Cheshire Science & Enterprise Zone, FDR Law, St. James Business Centre, Orbit Developments, Muse Developments, Peel, I & H Brown, Turner & Townsend and Leach Rhodes Walker Architects.