Logistics: On the move again

By Ged Henderson

04 Oct 2022

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The logistics sector is firmly back on Lancashire’s development map with major schemes on the drawing board that could deliver thousands of jobs and new businesses to the county.

The high-profile projects would also help to secure the M65 as a logistics corridor that can compete with the sector’s traditional North West heartlands in neighbouring Greater Manchester.

Sector watchers believe attention is turning to Lancashire once again because of rising prices around the M6 and M62 junctions. Availability and scarcity of new sites are playing their part and traditional logistics powerhouses like Trafford Park also have their own challenges, including traffic congestion.

At the western end of the M65 corridor, the county council and its development partner Maple Grove Developments - part of The Eric Wright Group – have submitted detailed proposals for the prime Lancashire Central site at Cuerden.

A planning application for a logistics and distribution led development, close to the M65, M6 and M61, was submitted at the beginning of September. Steve Burns, head of strategic development at the county council, describes Lancashire Central as “regionally significant”.

This development aims to deliver around 1.7 million sq ft of floor space. The aim is to create up to 5,600 full time job opportunities. It is also estimated that the development will boost the local economy by up to £390m a year.

Further east, Eshton, the developer behind the highly successful Burnley Bridge business park, now an established logistics hub, is looking to redevelop a 33-acre site between junctions nine and 10 of the M65 that has been allocated for employment use.

And the billionaire Issa Brothers’ development arm Monte Blackburn bought a nine-acre site at Burnley Bridge last October with the aim of bringing forward a speculative scheme.

Michael Cavannagh, director at commercial property expert Trevor Dawson, says: “It is great to see ongoing developer confidence in the area for speculative development.”

There is no doubt Monte’s Frontier Park development, one of the largest speculative industrial projects in the North West, sitting just off the Whitebirk Roundabout of the M65, has been a major success story.

Logistics firm Fagan and Whalley, which has an operation at Burnley Bridge, is just one of the business working out of Frontier Park after acquiring a 208,000 sq ft warehouse there.

Three and a half years after work began, the development it is fully let. Caroline James, managing director at Trevor Dawson says: “That is phenomenal for a scheme of this size. I can’t think of anything in the North West built out that quickly and let. It was a new venture for them and shows real confidence in the area.”

Those behind the new logistics and distribution led Lancashire Central scheme also see it as a sign of that growing confidence. The masterplan has been drawn up after an earlier retail-led plan for the site, anchored by what would have been the North West’s largest Ikea store, fell through.

Karen Hirst, managing director of Maple Grove, believes the new and updated vision for the key strategic employment site at Cuerden, offers major possibilities.

The proposals that will be put forward to planners will divide the site into a series of smaller development plots, setting out the intended use and scale of development for each. Detailed proposals for the plots will follow through a series of separate applications for ‘reserved matters’.

Looking at what the site can offer, she points to Lancashire Central’s ideal positioning close to the North West’s motorway network as a major selling point.

The mixed-use elements of the plan – as well as logistics, other commercial and housing development is proposed – also makes it more “sustainable”, she says.

She adds: “In terms of where the industrial and logistics market has gone, it is such a strong market. This plan will bring jobs.

“We have not even started marketing it yet, but we are already getting enquiries from potential occupiers and funders on a regular basis. They are saying it is a strong market and I believe that will continue.”

James Scott, Maple Grove development director, says the new vision for the site is “primarily employment led”. If the go-ahead is given, he says the first stage will be to carry out infrastructure work. If the plans are approved that work could begin later this year.

Caroline James adds: “There is a marked difference to where we were five years ago. The M65 is now recognised as a corridor of opportunity, and it is only going to get better. Lancashire Central will help with that.”

She also emphasises the impact logistics developments can have. While much of the current focus is on town centre regeneration, big sheds bring with them major employment and can play their part in the levelling up agenda. Caroline says: “They generate jobs and rates for the local authority.”

Property developer HBD is involved in two high profile logistics and industrial schemes in the Preston area. Its initial joint venture (JV) with east Lancashire based Barnfield has seen the 70,000 sq ft first phase of EAST completed, with phase two of the site, next to the M6, now in progress.

A second JV with Barnfield has seen a planning application submitted for 800,000 sq ft of industrial and warehouse space at Roman Way, to the north east of the city, also close to the M6.

Dan Lawrenson, development surveyor at HBD, says demand for space in Lancashire is so great, “we received more requirements than we can accommodate at EAST”.

He adds: “Although capital markets have been impacted by interest rate rises, with fewer funds now in the market, industrial and logistics has held up well and continues to out-perform other real estate sectors.

“Parts of Lancashire that benefit from close proximity to the motorway network will remain a very attractive logistics location, such as Preston.

“The logistics market in Preston continues to perform well from an occupier perspective, despite the current market challenges, which is very encouraging.

“We developed five speculative units as part of our first phase at EAST - all of them were let, demonstrating strong occupier demand for high-quality, well-located industrial space in Lancashire.”

Danny Pinkus, at Preston based commercial property specialist Robert Pinkus and Company, says despite the upturn in potential developments Lancashire still has an availability problem when it comes to land availability. He says: “There remains a shortage of well-located sites for logistics and industrial use.

“We are in a bit of a vacuum at the moment, which has been a reason why prices and rents have been pushed up.”

He adds that with logistics operations taking most of the developments coming out of the ground there is a real need for smaller units and more sites for manufacturing.

And he says: “There has been a big focus on housebuilding. Some of the land taken up by housing should have been employment sites, without question.”

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