As the sun sets on the UK’s membership of the EU (although many legal commentators agree that the actual setting itself will take far longer than most politicians admit) it’s a good time to reflect on the opportunities for those businesses that are anticipating post-Brexit growth, but who are concerned that they may soon be out-growing their current commercial premises.
With land prices at a premium across London and the South-East it may be time to start thinking about relocating outside the M25 — where rentals fall the further north of Watford you travel.
With this in mind I asked Bob Hyatt, MD at Liverpool-based Hyatt on Property, to prepare comparisons for a 10-year lease (with a 5-year tenant break) on industrial rents and availability in three key parts of the country: the Home Counties; Birmingham and Liverpool. Irrespective of HS2, it’s worth remembering that even now the North West is under three hours from Euston.
Over the wider areas of Hemel Hempstead, Watford and High Wycombe, commercial agents advise that the range of rentals for both 5,000 and 40,000sq. ft. units is £9-10 per sq. ft — with no discounts for larger units.
In and around Birmingham Bob reported that there is a shortage of commercial premises, but generally rentals were coming in at between £4.50-6.50 per sq ft, with discounts for larger units. Finally in the Liverpool area, rentals are around £5 per sq ft for the smaller units and £4 per sq ft for larger premises.
By relocating ‘up north’ business owners could be making serious annual cost savings. Based on a 40,000 sq ft warehousing facility they could be saving over £150,000 per annum. In addition to the availability of high quality, low energy developments, there is a ready supply of skilled and semi–skilled labour, and wage rates are generally lower than in London. By choosing sites adjacent to major motorways, companies that do relocate may find that they are better connected than before.
When looking at indicative rentals, it’s always wise to err on the side of caution because they don’t take into account specific locations, age of property or type of construction, and lease terms, which would all effect the annual rental. Additional factors such as rent-free periods have also not been taken into account in producing these headline figures.
Consideration should also be given to the availability of grants, which can vary from one local authority area to another and may well depend on the number of jobs that would be created — rather than simply being based on the fact that a business has chosen to relocate.
Whatever rentals are achieved, one thing is certain: if businesses choose to relocate outside the South-East they’re likely to benefit from significant cost savings, which in turn might be diverted into new product development, recruitment and capital investment.