Microsoft Word - 20141231-CommercialPropertyMarketAssessment-FINAL

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COMMERCIALPROPERTYMARKETASSESSMENT

Onbehalfof

COFELYGDFSUEZ

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December2014

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NorthEastLincolnshire

CommercialPropertyMarketAssessment

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EvolutionPDRLtd

December2014 2

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CONTENTS

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1.0 INTRODUCTIONPAGE3

2.0 METHODOLOGYPAGE4

3.0 AREACONTEXTPAGE7

4.0 INDUSTRIALPROPERTYPAGE9

5.0 OFFICEPROPERTYPAGE20

6.0 LANDPAGE27

7.0 CONCLUSIONSPAGE29

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NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 3

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1.0 INTRODUCTION

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1.1 EvolutionPDRLtdhasbeenrequestedtoundertakeaCommercialPropertyMarket

AssessmentonbehalfofCofelyGDF‐Suez.Theclientworksinapartnershiparrangeme nt

withNorthEastLincolnshireCouncil.

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1.2 Thepurposeoftheassessmentistoanalysethecurrentcondi tionswithintheCommercial

PropertyMarketwithin

theNorthEastLincolnshirearea,withspecificregardtoindustrial

andofficeaccommodationandconsiderationoftheprovisionofdevelopmentlandfor

commercialpurposes.

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1.3 Theaimofthisreportistoprovidearobustanalysisofcurrentmarketconditionsinrelation

totheexistingpropertystock,andanyissues

thatariseasaresultofthoseconditions.The

findingswillassistinformingrecommendationstotheNorthEastLincolnshirePartnership

regardinganyfutureactions.

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1.4 Specifically,itisunderstoodthatthisdocumentwillbeutilisedtosupporttheevidencebase

forthepreparationofthenewLocalPlaninrelation

totheprovisionofemploymentland.

TheanalysismayalsobeutilisedinsupportotherworkofCofelyGDFSuezinfulfillingits

obligationswithintheNELincolnshirePartnership.

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1.5 Thisreporthasbeenpreparedforthereasonsoutlinedabove,andislimitedtousebyCofely

GDFSuezand

NorthEastLincolnshireCouncil(NELC)infulfillingtheobjectivesofthe

partnership.Noliabilityisprovidedtoanyotherpartywhochoosestorelyonthisdocument

withouttheexpressauthorisationofEvolutionPDRLtd.

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

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 4

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2.0 METHODOLOGY

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2.1 ThestudyreliesonprimarydataobtainedfromtheEvolutivedatabase,NELC’sproperty

availabilityandenquirydatabasewhichhasbeenusedbytheCouncilforover10years.All

localagentsareknowntocontributepropertyinformationtothedatabase.Asaresult,it

providesarobustbasisfor

analysisofbothsupplyanddemandconditions.

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2.2 Whereappropriate,andspecificallywheredetailsarenotavailablethroughenquiresonthe

Evolutivedatabase,otherdatahasbeenanalysedfromdifferentsources,andisquoted

whereappropriate.

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2.3 Thecommercialpropertymarketisoneinwhichchangeisconstant.Analysisof

thedata

overthestudyperiod2009–2013,togetherwithdataobtainedfortheperiodJanuary–July

2014can,atbest,onlyprovideasnapshotofthecommercialmarket.However,thelongevity

oftheperiodstudiedandthewideusageofthedatabaseisconsideredtosufficientlyreliable

toenablerobustanalysisandidentificationofkeytrends.

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2.4 AstudyperiodcomprisingJune2009–June2013wasinitiallyidentifiedtoprovidethebasis

forinterrogationofthedatabase.Thisfiveyearperiodwasselectedinordertoensurea

rangeofeconomicconditions,operatingatbotha

nationalandlocallevel,couldbe

encompassed,andanyissuesspecifictoNorthEastLincolnshireidentified.Priorto

publication,thestudyperiodwasextendedtocovertheperiodfromJanuary2014toJune

2014inordertoensurethemostrecentinformationcouldbeincorporated,andanychanges

inidentifiedtrends

recognised.

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2.5 TheanalysisundertakenthereforeincorporatesthesixmonthperiodtoJune2014.Caution

shouldthereforebeexercisedwhenconsideringdataforthe2014period,asthisnotreflect

acompleteyearaswiththeotherdatasets.However ,itdoesallo wforidentificationof

emergingorchangingtrends.

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2.6 Interrogationofthedatabasewasundertakentoprovidespecificsearchesforeachannual

period(withtheexceptionof2014aspreviouslyidentified)inrelationtothefollowing:

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 Propertiesavailableonthemarket

 Propertieslet,soldandwithdrawnfromthemarketoverthesameperiod

 Enquiriesreceived

Thesearchesincludedofficeaccommodation(B1),industrialaccommodation(SpecificallyB2

andB8),andland.



NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 5

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FloorspaceSupply

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2.7 Floorspaceavailabilitywasdefinedthroughanalysisofthesearchresultsonthespecificdate

ofJune30

ineachyear.Anypropertythathadbeenmarketedatthatdate,andeither

remainedavailable,let,soldorwithdrawnwasincludedintheassessment.

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2.8 Thedatawasanalysedtoestablishtheextentofavailabilityinsizecategoriesupto500,000

sq.ft.foralltypesofproperty.Properties

transacted(i.e.identifiedassoldorletasof30

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Juneinthatyear)wereidentifiedaspartoftheoverallsupply,butseparatelyidentifiedin

ordertoestablishtrendsintransactions.

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2.9 Whilsttotalfloorspacedetailswereanalysed,thetotalnumberofunitswasalsoidentified in

ordertosmooththedistortionswhichoccurfromtheidentificationoflarge

units.

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2.10 Detailswereanalysedonannualbasis,aswellasanaverageoverthetotalstudyperiod.The

averageannualfiguresquotedincludetheperiodtoJune2014,exceptwherespecifically

stated.

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FloorspaceDemand

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2.11 DemandwasidentifiedbyanalysisofenquiriesrecordedbyCofelyGDFSuezinits

managementofthedatabase.Itisnotedspecificallythatotherpartneragenciesusingthe

databasemayalsorecordenquiriesreceived,butthese arenotaccessibletoCofelyGDF

Suez.Asaresult,therefore,theenquiries 

recordedrepresentonlythoseenquiriesreceived

byCofelyGDFSuezaspartofitsEconomicDevelopmentfunction.Giventhisrestriction,the

potentialforenquirylevelstobegreaterdoesexist,butitisnotpossibletoanalysewithany

degreeofcertainty.

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2.12 Itisnotedthatthereisno

definitionbetween“genuine”enquiriesreceivedfromcompanies

withadefiniteinvestmentinterest,asagainstthosewhichmaybeconsideredtobemore

speculative.Inadditionrepeatenquiriesarenotrecordedbeyonda6monthperiod,and

thereforeasaresulttheremaybeanelementof“doublecounting”inthefigures

presented.

Cautionshouldthereforebeexercisedintheirconsideration.

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2.13 Aspartofthemanagementofthedatabase,specificenquiriesrelatingtoFoodGrade

premisesareseparatelyidentified.GiventheFoodProcessingsector’srolewithinthelocal

economy,itwasconsideredappropriatetoaddressthisaspartoftheenquiry

analysis.Ithas

notbeenpossibletodeterminetheextenttowhichthesupplysideconditionsspecifically

addresstheneedsofthissector.



NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 6

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2.14 Totalfloorspacelevelswereidentifiedtogetherwiththenumberofunitsinorderto

overcomeanydistortionsarisingfromlargersizedunits.Annualaveragefigureswere

establishedoverthestudyperiodasabove.

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2.15 Enquiriesarenotrecordedasbeingcompletedorsatisfied,andasa

resultitisnottherefore

possibletodeducetheextenttowhichanyenquiryisresolvedsatisfactorilywithinNorth

EastLincolnshire.Theassessmentcanonlythereforededuce intermsoffloorspace

provisionanddemandanalysistheextenttowhichpotentialcustomerrequirementsare

beingmet.



OutcomesofAnalysis

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2.16 Oncebothsupplyanddemanddetailswereestablished,thetwosets ofdatawereput

togetherinordertoenableanassessmentofwherekeygapsinthemarketcouldbe

identified.Thiswassegregatedtoidentifyspecificsizecategories,rangingfrom500sq.ft.

to500,000sq.ft.

onbothanannualaggregatebasis,aswellasanaveragebasisoverthe

studyperiod.

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2.17 Themarketingperiodforpropertieswasestablishedbyconsideringthedetailsforthose

propertiessoldorletwhenmeasuredinJune2013,bymeasuringthedatethepropertywas

firstrecordedasbeing

marketedtothedateitwasremovedfromthedatabase.All

measurementswereundertakeninmonthsandanalysedtoestablishtheaveragenumberof

monthstakentoletorsellaproperty.





NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 7

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3.0 AREACONTEXT



3.1 NorthEastLincolnshireislocatedonthesouthsideoftheHumberEstuary,andfocusseson

themainurbancentresofGrimsby,CleethorpesandImmingham.Thepopulationtotals

circa159,000,ofwhich76%iseconomicallyactive,andprimarilyworkandshopwithinthe

NorthEastLincolnshirearea,reflectingto

acertainextentthearea’sgeographicalisolation

fromothermajorurbancentres.

3.2 TheareacontributessignificantlytotheUK’sLogistics,FoodProcessingandEnergysectors.

ThePortsofImminghamandGrimsbyaretheUK’slargestportsbytonnage,andhavea

significantsupplybasewithinthelocaleconomywhichis

anticipatedtoadaptovertime.

Specifically,withinthePortofGrimsby,anicheisnowdevelopingintheprovisionof

OffshoreOperationsandMaintenancefacilities(O+M)forthewindfarmsbe ingdevelopedin

thesouthernNorthSea,andanEnterpriseZonehasbeenestablishedwithinthePortof

Grimsbytoassist

thedevelopmentofthissector.

3.3 Grimsbyspecificallyhasalongassociationwiththefishingindustr y,andthishasleditto

developingspecialismsinfoodprocessing,specificallyforfishandshellfishproducts.Over

recenttimes,diversificationoftheindustryhasledtoexpansionintotheprovisionofchilled

foodsand

readymeals,includingproductssuchassoupsandpizza’s.Recentinvestments

indicatethattheareacontinuestosecureopportunitieswithinthissector.Thereareclose

linkageswiththelocalspec ialistlogisticssectorrelatingtothedistributionofchilledfood

products.

3.4 TheareaalsohasstrengthsintheChemicalsand

Processingsectors.Majoroperators,such

asCristalandNovartisarecurrentlypresent,andthereareproposalsattheplanning stages

forthedevelopmentofbio‐fuelandbio‐energyplants.

3.5 Whilsteachofthesesectorsactsrelativelyindependentlyofeachother,therearekey

linkagesbetweenthemthatprovidemutual

supportandallowsforadaptationaccordingto

marketrequirements.Forexample,therelationshipbetweenfoodprocessingandlogistics,

betweenchemicals/processindustriesandtheprovisionofrenewableenergy(bio‐mass/bio‐

fuelespecially),andthePorts(especiallyGrimsby)andtheoffshorerenewable energy

industry.Ineffect,theeachofthekeysectors

worksindependently,buthavecloselinkages

withothersectorswithinthearea.However,theyarenotinter‐dependant,whichbuilds

resilienceintothelocaleconomywhenuncertaintieswithinanyonesectorarises.

3.6 Whilsttheoperationswithinthekeysectorsaresignificantandhavemajoropportunities

ahead,otheroperations,suchas

businesssupportservicesarecurrentlyweaklyrepresented

inthelocalmarket.Growthinthekeysectorsisanticipatedtogenerategreateractivityin

thebusinesssupport,financial,professionalandtechnicalservicessectors.

3.7 ThemaincommercialareasislocatedalongtheSouthHumberBank,runningbetweenthe

PortsofImmingham

andGrimsby,largelylocatedonlandtothenorthoftheA180.In

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 8



addition,theareasontheperipheryofGrimsbyandImminghamtowncentresarelargely

dominatedbyindustrialoperations,primarilyfocussedonthefoodprocessingindustryfor

Grimsby,andlogisticsinImmingham.Smallerlevelsofprovisionareaccommodated

betweenCleethorpesandHumberstonattheWiltonRoadIndustrial Estate.

3.8 OfficeaccommodationisprimarilylimitedtoGrimsbytowncentre,althoughrecent

developmentsatEuroparchavebeenundertaken.Limitedprovisionisalsomadewithin

smallerbusinessparks,suchasthatatLaceby.

3.9 Theexistingpropertystockisprimarilymadeupofsecondhand,poorqualityindustrialand

officeaccommodationlocated

withintraditionalindustrialareas,specificallyaroundthe

Portsandperipheraltowncentreareas.

3.10 Thebuildingofaccommodationhas,inrecenttimes,beenverylimited,primaril y becauseof

lowlandandpropertyvaluesstiflingspeculativedevelopment.Themostrecent

developmentshavebeenrealisedatEuroparc,abusinessparklocatedat

theeasternedgeof

Grimsbyapproximately2milesfromthetowncentre.Europarcwasdevelopedasastrategic

sitewithfundingfromYorkshireForward,andhasgraduallybeendevelopedoutona

demandledbasis.

3.11 Inthemain,thesupplychainandcustomerbaseremainsrelativelylocal. Asaresult,



propertydemandshavebeengenerallydrivenfromtheexpansion/diversificationofexisting

operationswithinthearea,asopposedtonewinvestorsbeingattractedtothearea.

However,morerecentlymajorUKcompanieshaveinvestedinthearea,suchasEon,

Centrica,DongEnergy,SiemensandMorrisonsandhavebeenattractedas

aresultofthe

specificopportunitiescreatedbygeographicallocationandexpertis eintherelevantsectors.





Evolutio

Decemb



4.0



4.1



4.2

4.3



2014fi



nPDRLtd

er2014

INDUSTR

upplyofI

Datacollate

13.286milli

nnual ave

However, a

between20

onsolidatio

ommercial

hatthere

verysmall

uringthes

respectively

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ftheprop

(definedas



uresapplyfr

1,322,89

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dforthepe

nsq.ft.w

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n/failure o

property.

aynowbe

(2%)ofthe

udyperiod.

amounting

largelycon

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level(2%).

rtiesidenti

itherletor



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

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riod2009‐

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allproperti

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units.

44,800

2014



NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 10



4.4 Propertiesarefoundtobeavailableinmostcategories,asshowninTable1below.The

smallestindustrialunitisrecordedas500sq.ft.,andthelargestbeing170,000sq.ft.The

mostpopularsizecategory(intermsofunitnumbers)arethe1,000–

2,000sq.ft.(averaging

11unitsperannum),2,000–3,000sq.ft.(averaging14unitsperannum),5,000–10,000sq.

ft.(18unitsperannum),and10,000–15,000sq.ft.categories(12unitsperannum).On

average,unitsavailableinthesesizecategoriesaccountedfor55%ofthe

totalnumberof

unitsavailablewithinthestudyperiod.



Table1UnitAvailabilitybySizeCategory2009‐2014

4.5 Theleastlevelofavailabilityisidentifiedintheverysmallestcategoryof0‐500sq.ft.andthe

largerunitcategoriesof100,000–200,000sq.ft.Thereareaverylimitednumberof

propertiesidentifiedwhichareabovethe200,000sq.ft.category.

4.6 TheEstatesGazetteProperty

Databaseshowsthatasignificantproportionoftheunitsare

within2

handstock(95%byfloorspace,93%byunitnumbers).Thereisverylittleexisting

propertyadvertisedas“newbuild”,andwhereitisitrelatestomodern,goodqualitysecond

handstockprimarilyonEuroparcdevelopedinthe1990’sandearly2000’s.Thereis

thereforeadistinctlackofthe

availabilityofmodern,goodqualityindustrial

accommodation.

4.7 Atotalof64%ofalltransactionswereundertakeninrelationtoleaseholdproperties,which

isreflectiveofthedominanttenuretypeprovidedinthearea,andtheextentofleasehold

propertyinthearea;andisconsideredtobeakeyissue

intermsofattractinginvestors.Very

limitedtransactionswereundertakenonafreeholdbasisonunitsoflessthan4,000sq.ft.,

suggestingasignificantshortfallofthistenuretypeinthesmallunitcategories.

UnitSize(sq.ft)

2009 2010 2011 2012 2013 2014 Average

0‐500 52111‐00 2

501‐1000 1895571 8

1001‐2000 22811995 11

2001‐3000 30121013146 14

3001‐4000 1444642

6

4001‐5000 20510675 9

5001‐10,000 39201716103 18

10,001‐15,000 3111999‐00 12

15,001‐20,000 1255221 5

20,001‐50,000 2196742 8

50,001‐100,000

1047641 5

100,001‐150,000 2‐001121 1

150,001‐200,000 722221 3

200,001‐300,000 2‐00‐00‐00‐00‐00 0

300,001‐500,000 2‐00‐00‐00‐00‐00 0

23 5918883

7528100

Fl oorspaceAvailabiilitybyUnitSi ze



Evolutio

Decemb



4.8

4.9



4.10

4.11

4.12

nPDRLtd

er2014

iventhat

iththepe

ccommoda

mallcomp

wnedmay

actorinter

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hattherea

propertiesi

10,000sq.f

propertiesi

Freeholdpr

llproperti

months,wh

unit.

hesluggish

upply,and

rtheunsui

propertyist

verageren

nalysisoft

t.insize.B

anysmallc

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tionforsuc

nies,theco

provetobe

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esignifican

the3,000‐

.category.

the50,000

pertiesapp

s.Oneunit

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hatoccupi

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allevels(b

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lsupply.

reheldont

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,000sq.ft.

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ptationon

eholdprop

ranaverag

rtestperiod

d43mont

rdedasana

es.

ragetimeon

withanave

sq.ft.cate

was35mo

attherear

beingmet,

omparative

fordirect

)arearoun

rentalisreq

expectedf

PERTY

MARKE

ehold

cialPropert

oldaccom

nership,th

addition,a

ropertytha

rtiesisther

of26mon

recordedof

sforproper

eragemar

arketbysize

ageof17

orysecure

thsfora2,

limitations

itherthrou

speedwith

wnership.

£4.50per

estedforu

rquantum

rthEastLin

MarketAs

odation,t

lackoffre

ndspecifica

tisnotdire

eforealimi

hs.Howev

11months

tiesinthe5

etperiodf



ategor



onthsrecor

disposalwi

00–3,000

intheprop

hsizelimit

hichfreeh

q.ft..How

nitsupto5,

allowance,

easehold

olnshire

essment

11

gether

hold

llyfor

tly

ing

r,within

or

000‐

r

dedfor

thin2

q.ft

rty

tionsof

ld

ver,

00sq.

ental

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 12



levelsfalldramatically,withlevelsof£1.50persq.ft.beingobservedintheverylargeunits

(50,000–150,000sq.ft.).

4.13 Therentallevels identifiedaresuchthatanyspeculativedevelopmentisunlikelytobe

commerciallyviable.Consequently,nounitscurrentlyavailablehavebeendeve loped

ona

speculativebasisoverrecenttimes,andthereiscurrentlynospeculativedevelopmentbeing

undertakenonanysitesacrossthearea,constrainingthelevelofsupplyevenfurther.

4.14 Overrecentyears,allnewprovisionhasbeensupportedbypublicsectorsubsidy,including

theinvestmentbyYorkshireForwardofcirca

£20mtosecuretheacquisitionandprovide

strategicinfrastructureforthedevelopmentofEuroparcPhase3inthelate1990s.This

providedareadilyavailablesupplyofservicedland,uponwhichpotentialoccupierscould

progressinvestmentprojectswithinreasonabletimescales.ThesuccessofEuroparcasa

businesslocationisnoted.

However,thesiteisnownearingcompletionandopportunities

forinvestmentarereducing.

4.15 Analysisofplanningapplicationrecordsalsoshowverylimitedconfidenceinprovisionof

industriallandcurrently.Upuntillate2013,noapplicationswerereceivedformajor

employmentlandprovision,andasaresult,withtheexceptionof

Europarc,thereareno

readilyservicedsitesavailableforeasyinvestmentimplementation.Thisresultsinatimelag

forbusinesses,whomayalternativelyseekotherlocationswhocanprovidequickerresponse

times.

4.16 Itisnotedthatmorerecently,anoutlineapplicationforthedevelopmentof50acresofland

offKingsRoad,Imminghamwasapprovedin2014,inadditiontoaplanningapplication

beingsubmittedforafurther20haattheGreatCoatesBusinessPark.Itis u nderstoodthat

publicsectorsupportisbeingsoughttoassistwiththeimplementationofallofthese

consents.However,theimplementationof

siteswilltaketime,anduntilthesesitescomeon

streamtheopportunitytotakeupreadilyavailablelandfordevelopmentremainslimited.

Thetimelagwhichinevitablyresultsisaddingtothecurrentlimitationswithintheindustrial

propertymarket.



Demandforindustrialproperty



4.17 Overall,enquirylevelsareveryhealthywith472separateenquiriesregardingatotalof

11.5msq.ft.overthe5yearstudyperiodbeingreceived.Onaverage,approximately80

enquiriesarereceived,equatingto1.9msq.ft.intotal.

4.18AsshowninFigure3below,peaksinenquiries

wereexperiencedin2009and2012.Itis

noticeable,however,thattheremainingyearswerebroadlysimilarintermsoffloorspace,

andtheprojectionofthe6monthperiodfor2014wouldalsosuggestasimilarlevelof

enquiriescouldbereceived.



Evolutio

Decemb



4.19

4.20



nPDRLtd

er2014

However,in

nationallev

ithinNort

Lincolnshire

Figure4sho

he20,000‐

ccounting

respectively

termsofth

l,investor

EastLincol

tomeetoc

wsthatthe

0,000sq.ft

oratotalof

.

Figure3

overallnu

onfidencei

shire.This

upiersrequi

reatestpro

,50,000‐10

68%ofallfl

2009

2010

2011

2012

2013

2014

TOTAL

Average

OVERAL L

34%

15%

USTRIAL

nquirylevels2

bers,total

returningt

impliesred

rements.

portionofa

,000sq.ft.

oorspacee



l oorspaces

ft

3,005,624

1,966,364

1,690,301

2,510,450

1,624,200

712,903

11,509,842

1,918,307

NQUIRIES

FLOORS

2009‐ 2

Commer

09–2014

enquirylev

themarke

cinglevels

lenquiries

and100,00

quiries,equ

Figure4Indus

q

Units

111

42

472

009‐2014

ACEENQ

cialPropert



lsare,decli

,thisisclea

fconfidenc

erereceive

–150,000

valentto1

rialFloorspace

IRIES

rthEastLin

MarketAs

ing.Given

rlynotbein

inNorthE

dregarding

q.ft.categ

%,34%an

Enquiries200

0‐500

501‐10

1001‐2

2001‐3

3001‐4

4001‐5

5001‐1

10001‐

15001‐

20001‐

50001‐

olnshire

essment

13

hat,ata

realised

st

unitsin

ries,

15%



‐2014

000

5000

0000

00000



Evolutio

Decemb



4.21

4.22



4.23

(



4.24

4.25

nPDRLtd

er2014

Itisalsonot

500,000sq.

uringthat

pecificreq

19.4%ofall

oodgrade

hichagain

fthefood

(

8%offood

hesignifica

ransactio

verall,tra

otalfloors

eparatetra

ransaction

ince2009,

reatestlev

q.ft.ando

22%

2009

edthatduri

t.werereq

eriod.

estsforFo

enquiriesre

nquiriesinc

represente

radeenqui

ntproporti

ns

sactionswe

acetakeup

nsactions,o

wererecor

otentiallyi

elsoftransa

er20,000s

(%

gthestudy

ested,alth

dGradefac

eived,equ

reasedto2

similarlev

ylevelsreq

ies),5,000

–

nofenquiri

resecured

overthefiv

which65%

edduringt

plyingred

ctionstook

.ft.sizeca

010

ODGR

LOORS

periodunit

ughnosuc

ilitiesrecor

tingtoato

.4%ofthe

lstothatac

Figure5

ested,key

–

15,000sq.

srelatingt

n25%ofall

eyearstud

wasundert

estudype

cingstocks

lacewithin

egories.Iti

24%

2011

DEEN

PACE2

Commer

ofsizesin

properties

edoverthe

alof2.2ms

veralltotal

hievedin2

roportionofF

ategoriesf

ft.(34%)an

largeunits

availablepr

periodamo

kenonale

iodbuttren

uitability.

unitsizesu

notedspe

12%

2012

QUIRIE

09‐20

cialPropert

xcessof20

wereidenti

studyperio

.ft.In201

equestsfor

09.

odGradeEnq

rsizewere

50,000–1

isworthyo

pertyover

untedto3.

seholdbasi

dhasbeen

to5,000s

ificallythat



rthEastLin

MarketAs

,000sq.ft.

iedasavail

amounted

,thepropo

accommod



iries2009‐20

1000–2,00

0,000sq.f

noting.

thestudyp

msq.ft.ov

s.Varyingl

enerallydo

.ft.,5,000‐

55%ofthe

olnshire

essment

14

pto

ble

to

rtionof

tion,

3

sq.ft.

.(51%).

riod.

r224

evelsof

nward

0,000

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 15



transactionsundertakenwerewithinsizecategoriesofupto5,000sq.ft.,amountingto124

transactionsintotal.



Figure6IndustrialFloorspacetransactionsbytenure2009‐2

4.26 However,asnotedabove,thetransactionlevelsareconsideredtobelowincomparisonto

theoveralllevelofpropertyavailableandrequired.Coupledwiththesluggishmarketing

periods,itcanbeconcludedthatthemarketisnotmeetingspecificneedsofoccupiers.



OVERVIEWOFINDUSTRIALMARKETCONDITIONS



4.27 TheaboveshowsthatNorthEastLincolnshirehasbothhealthylevelsofsupplyanddemand,

bothofwhichareabout2.0msq.ft.perannum.Thishighlevelofanalysiswouldsuggest

thatinquantitativetermsmarketrequirementscanbemet.

4.28 However,thegeneraltrendintermsof

bothsupplyanddemand,asshowninFigure7below

isdownward,whichsuggestsreducinglevelsofinvestorinterestinthearea,andanoverall

shorteningofsupply.Thelowtransactionlevels,coupledwithprolongedmarketingperiods

andlowvalues,suggestthattherearequalitativeissueswhichresultinNorthEast



Lincolnshireisfailingtomeetmarketrequirements.



‐00

200,000

400,000

600,000

2009 2010 2011 2012 2013 2014

IndustrialTransactionsbyTenure

(floorspacesq.ft.)

2009‐ 2014

Let Sold



Evolutio

Decemb



4.29

4.30

4.31

‐00

20

40

60

80

100

120

nPDRLtd

er2014

igure8sho

eriod.This

educedlev

rendinter

ransaction

ontinuedt

educinglev

orseningp

ecliningde

arketcon

ecovery.Th

2009

strendsin

clearlysho

lsofdema

sofavaila

levelsappe

decline,thi

elsofdema

osition.

mandiscon

itionsandt

issuggests

IND

termsofflo

stherecess

doverthe

lesupply,al

redtorally

sisconside

d.Inshort,

Figu

sideredtob

eincreasin

hat,despite

2010

STRIALS

Availabl

Figure7

orspacereq

ionaryimpa

eriod2009

–

thoughsom

n2011,but

edtoberef

thetrendsi

e8Demanda

etherevers

confidenc

thebroadf

MMARY

Enqu

Commer

emandandSu

uirementsa

ctofincreas

–

2011.Ital

erallyingin

overallrem

lectiveofth

dentifiedin

dSupplyTren

ofwhatc

beingreali

guressugge

(UNITS)2

iries T

cialPropert

plyTrend(Un

davailabili

edavailabili

oshowsa

ermsofde

inlow.Wh

lowerleve

Figures7an

s(Floorspace

uldbeexpe

edasaresu

tingthatq

2012

009‐ 201

ansacted

rthEastLin

MarketAs

ts)2009–201

yoverthe

yofproper

ontinuingd

and.

ilsttheyha

lsofavailab

d8bothsu

q.ft)2009‐2

tedgivenc

ltoftheeco

antitatively

olnshire

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NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 17



anddemandarebroadlymatched,thereareclearlysomekeyweaknessesinthemarket’s

abilitytoaccommodateoccupiersneeds.Thelackofabilitytomeettheseneedsaresuch

thatinvestorsarenowmuchmoreawarethattheNorthEastLincolnshireoffercannotmeet

theirrequirements,and

asaresultarelookingtootherlocations.Declining levelsofsupply

willexacerbatethissituationunlessfullyaddressed.

4.32 Whenanalysedatadetailedlevel,thereisaclearimbalancebetweendemandandsupplyat

adetailedfloorspacelevelwhichwillbecontributingtotheoveralldownwardmovementof

the

market.Ingeneralterms,85%ofallenquiriesrelatetopropertiesofover20,000sq.ft.

However,onthebasisofthedataanalysed,just20%oftheunitsavailablearewithin these

sizecategories.

4.33 Figure10showsspecificallythetotallevelsofprovisionoffloorspacemeasuredagainst

demand

requirements.Thisshowsthatunitsizesupto2,000sq.ft.andabove20,000sq.ft.

areunder‐supplied,whereasover‐supplyis identifiedinthemid‐sized2,000–20,000sq.ft.

categories.Specificshortagesarealsoidentifiedincategoriesabov e200,000sq.ft.,

althoughitisnotedthatthese

relatetolimitedenquirylevels.



Figure9IndustrialFloorspaceSummary,AverageUnits2009‐2014

4.34 Thelimitedprovisionofsmallunitsectorisofparticularconcerngivenitssignificantrolein

providingappropriateaccommodationforSME’sandnewlyformedcompanies.Itisnoted

thatunitsupto500sq.ft.wereinparticularshortsupply,andoverallthoseupto2,000sq.

ft.representedunder

10%oftotalunitsavailable.

4.35 CurrentrestrictionsintheprovisionofindustrialaccommodationsuitableforSME’sand

start‐upslimitstheopportunity tosecureandmaintainabalancedbusinesseconomy

throughoutthewholebusinessgrowthspectrum.Theinabilitytoappropriately

‐00

2

4

6

8

10

12

14

16

18

20

INDUSTRIALFLOORSPACESUMMARY2009‐ 2014

(AVERAGEUNITS)

AVGANNUALENQUIRIES AVGAVAILABILITY AVGANNUALTRANSACTIONS

NorthEastLincolnshire

CommercialPropertyMarketAssessment

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EvolutionPDRLtd

December2014 18



accommodatetheSMEmarketwillresultingrowingbusinessestolooktootherlocations

outsideofNorthEastLincolnshiretomeettheirrequirements,andoncelost,areunlikelyto

return.

4.36 Attheotherendofthescale,thereislimitedprovisionoflargerscaleaccommodation,

specifically

withinthecategoriesover20,000sq.ft.Again,however,85%ofthetotal

demandrequiredpropertiesinthiscategory.Itisofsignificancethatthedemandgenerated

forFoodGradepremiseswithinthesesizecategoriesequatesto51%ofallFoodGrade

enquiries.

4.37 Thelackofavailabilityinthiscategory

clearlyshowsthereisaclearmismatchbetween

supplyanddemand,resultinginthefailuretomeetoccupiersrequirementandkey

opportunitiesforinvestmentandgrowthbeingmissed.Takingtheexampleofthe

requirementforFoodGradepremises,itisclearthatonsizecategoriesalonerequirements

whichwouldattract

businessinvestmentcannotbeaccommodated.Onthebasisofthe

evidenceidentified,thisissueisnotsectorspecific.

4.38 Oneoptionforpotentialoccupiersmaybetotakeaccommodationwhichrequiressignificant

adaptationorupgrading.However,thecostsofadaptationmaybesignificant,andinitself

actasakeydeterrent

toinvestment.Whencoupledwiththelackoffreeholdopportunity, 

whereinvestmentsmayberecoveredinthelongerterm,thepotentialforinvestmentofthis

naturetobeprogressedbecomesincreasinglylimited.

4.39 Finally,alackofsuitablesiteswheredevelopmentcouldprogressalsocontributestothe

restrictionswithinthe

market.Withoutthis,thetimerequiredforobtainingplanningand

otherappropriateconsentsandundertakingconstructionareprohibitivetobusiness 

investment.Therefore,asupplyofrea dilyavailableunits,eitherbuiltonaspeculativebasis,

orsiteswheredevelopmentcanprogressrapidlyareanimperativepartoftheindustrial

propertysupply.



4.40 ItisnotedthatEuroparccurrentlyofferstheonlyopportunityforprovisionofnew

accommodationonareadilyservicedsite.However,PhaseIIIatEuroparcisnownearing

completion,andwhilstplanningconsenthasbeenobtainedveryrecentlyononesitewithin

Imminghamitisnotyetservicedtoan

extentthatitcouldbereadilyoccupiedbyinvestors.

Thiswillassistinovercomingidentifiedshortfallsintheshortterm,butitisimportantto

ensurethatthereisflexibilityandchoicewithinthemarket,suggestingthatalternativesites

mayalsoneedtobeconsideredinordertoensureinvestment

opportunitiesaresecured.

4.41 However,lowlandvaluesandthepotentialforlimitedreturnsimpactsignificantlyonthe

provisionofbothspeculativedevelopmentandtheprovisionofservicedsites.Such

provisionsareusuallyundertakenwherethedevelopercanbeconfidentofcommercial

returns.However,thelowvaluesthatexistinthe

areaaresuchthatdevelopmentofthis

natureisunlikelytobecommerciallyviablewithoutpublicsectorsupport.Liaisonwiththe

LEP’stosupportinvestmentofthisnatureisthereforerequired.

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 19



4.42 Therearetherefore,majorqualitativeissuesinrelationtothequalityandvalueofthe

existingstockwhichresultinthemarketbeingsignificantlyconstrained,andthisactsasa

barriertosecuringsustainableeconomicgrowth.Opportunitiestoensureareadysupplyof

goodquality,readily

availablesitesandpremisesshouldbepursuedinordertomaximise

investmentopportunitiestothearea,supportedbypublicsectorinvestmentwhere

necessary.



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000sq.ft.,

yavailable

itsperannu

annum).T

000sq.ft.

ceAvailability

wncentre,

okeaccom

partofthe

datLaceby

tre.Virtua

lofleaseh

,70%were

opertyDat

rentswere

50persq.ft

lOfficesin

09‐ 201

013 2014

rthEastLin

MarketAs

ged5%.Ve

turntocon

of424,000

wever,tra

vailability,

13equate

ith66%of

nitsizeswe

m),2,000‐

elargestu

byUnits2009

‐

comprising

odation,a

towncentr

BusinessPa

llyallofthe

ldproperty

undertaken

baseshow

equestedf

.forthelar

thetownce

2009

2011

olnshire

essment

21

ylow

idence

q.ft.

sactions

ndthis

to25%

lltotal

re500–

,000sq.

it

‐

2014

corn

dfirst

.

kand

ona

dthat

runits

estunit

ntreare



NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 22



advertisedat£8.50persq.ft.Thehighestrentalrequestswereabove£10.00persq.ft.and

relatedtobespokeself‐containedaccommodation.Whilstnospecificinformationwas

availableinrelationtounitsonEuroparcinMarch2014,previouslyobtainedinformation

fromFebruary2014suggestsrentallevels

inEuroparcarecirca£12.50persq.ft.

5.9 Aswiththeindustrialmarket,itisnotedthattherentallevelsaresuchthatcommercial

viabilityonspeculativedevelopmentis unlikelytobeachievable,evenwiththehigherrental

levelsachievedforspecificofficeenvironments.Thelackofcurrentdevelopmentfor

office

accommodationreflects,interalia,therelativelypoorvalues,andwillultimatelyresultin

constrainingoftheoverallsupply.

5.10 AnalysisofthesoldandletdataforJune2013indicatesthattheaveragetimeforoffice

accommodationtobeavailableonthemarketamountedtoanaverageof31

months.The

shortestperiodoverallequatedto15monthsforpropertieswithinthe3,000–4,000sq.ft.

category,whereasthelongestperiodwas56monthsforunitswithinthe10,000–15,000sq.

ft.category.Asbefore,freeholdaccommodationtendstosellslightlyquickerthanleasehold

property,withaveragetimes

being29monthsand31monthsrespectively.

5.11 Thesluggishnatureofthemarketidentifiedabovesuggeststhattheremaybepotential

qualitativeissuesinprovision,particularlyintermsoflimitedchoice,whichwillultimately

stifleoccupierinvestment.

5.12 Overall,therehasbeenverylimitedinterestinprogressingschemespurely

foroffice

accommodationoverrecenttimes.Wheredevelopmentofofficeaccommodationhasbeen

proposed,ithasbeenassociatedwitheitherexistingmanufacturingoperationsrequiring

extension,oraspartofalargermixeduseproposal,suchasthatatE:Factorwhichprovidesa

rangeofstart‐upbusinessaccommodation.

5.13 However,recently

theCouncilhasgrantedplanningpermissionforthedevelopmentof

officeaccommodationatAltyreWay,offHewitt’sAvenue,anditisunderstoodthatthe

developerwillbeprogressingthisonaspeculativebasis,facilitatedbyassociatedhousing

development.Thisdevelopmentwillrepresentthefirstmajordevelopmentofbusiness

parkoffice

accommodationsincethedevelopmentoftheOriginWayatEuroparcintheearly

2000’s.Inaddition,theCouncilisactivelyprogressingthedevelopmentoftheCartergate

siteforofficeaccommodationtobeundertakenonapre‐letbasis.

5.14 Recentchangesinplanninglegislation hasresultedinPriorNotificationapplicationsbeing



submittedtoexercisePermittedDevelopmentRights forchang e ofusefromofficeto

residential.Bothoftheapplicationssubmittedarewithinperipheralareasanddonot

significantlyimpactuponthesupplyofaccommodationwithinthetowncentreorat

Europarc.Suchopportunitiesareanticipatedtocontinueduringthethreeyear

period

currentlypermitted.Suchlossesmayultimatelyimpactupontheoveralllevelofsupply.



Evolutio

Decemb



5.16

5.17



5.18

5.19



nPDRLtd

er2014

Demandfo

verthest

otalof1.24

levelofenq

pproximat

largestprop

nquiriesfo

012.Thisi

eforspeci

ransaction

24,813sq.

nthesub‐3

,000sq.ft.

t.category.

OfficeAcc

dyperiod,1

msq.ft.int

iriesamou

ly90%ofa

ortionofen

unitsabov

dicatesso

icusersand

levelsovert

t.Thevast

000sq.ft.c

category.H



mmodatio

67requests

otalfloorsp

tingto207,

lenquiriesr

uires(68%)

50,000sq.

edemandf

notforthe

hestudype

majority(7

tegory,wit

ighlevelsof

n

forofficea

cerequire

000sq.ft.

elatedtoun

)

relatedto

ft.werespe

orlargersc

eneralmar

iodresulte

%)ofthese

themost

transaction

Commer

commodati

ents.This

itsizesund

pecificunit

Figu

ificallyiden

leofficeuni

et.

inatotalo

transaction

opularsize

werealso

cialPropert

nwerema

quatestoa

r10,000sq.

izesnogre

e12OfficeEn

ifieddurin

s,although

141transa

wereunde

funitbein

ecordedin

rthEastLin

MarketAs

e,equating

annualav

ft.Howeve

terthan3,

uiries2009‐2

theperiod

thisisconsi

tionsrepre

rtakenonp

withinthe

he500–1,

olnshire

essment

23

toa

rage

r,the

00sq.ft.

014

010‐

eredto

enting

operties

,000‐

00sq.

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 24



OVERVIEWOFTHEOFFICEMARKET



5.20 Theanalyseddataindicatesthat,overthestudyperiodatotaldemandof1.24m.sq.ft.was

identified,andatotalsupplyof1.42msq.ft.wasavailableontheopenmarket.Onan

annualbasis,demandequatesto226,000sq.ft.approx.,whilsttheavailablesupplyequated

to

236,000sq.ft.approximately.Onthisbasis,itcanbesuggestedthatthereiseven

provisionbetweendemandandsupply,andthatinq uantitativetermsthereareno

immediatedeficiencies.Intermsoftotalunitnumbers,however,theevidencesuggests

thatthemarketmaybeover‐supplied,asdemonstratedinFigure

13below.



Figure13OfficeSummary(Units)2009‐2013

5.21 However,whenanalysedatthedetailedfloorspacelevel,morespecifictrendscanbe

identified.Figure13specificallyshowsamixedpictureintermsofdemandandsupply,and

theabilityoftheareatomeetoccupier’sneeds.Itisclearthatinthepost‐recessionperiod

of2011‐2012the

levelofavailableunitswouldnotaccommodateoverallrequirements.

Whilstthefiguresfor2014representonlyasixmonthperiod,projectionsofthesefigures

wouldsuggeststabilisationandsimilarlevelsto2013beingachievedintermsofavailability,

althoughdemandandtransactionshaveincreased.

‐00

10

20

30

40

50

60

70

80

90

2009 2010 2011 2012 2013

OFFICESUMMARY(UNITS)2009‐ 2013

Available Enquiries Transacted



Evolutio

Decemb



5.22

5.23

5.24

5.25

nPDRLtd

er2014

hatisevid

tudyperio

ouldsugg

upplywillu

deterrent

ransaction

illalsolea

pportuniti

ompanies

o,orwithin

otentialov

bilitytom

earonyea

heabilityt

nddetaile

hereareno

tisalsonot

ccommoda

herefore,s

dentified,a

ndasares

entfromFi

.Whilstth

stthatthis

ltimatelyre

oinvestme

levelsappe

tolowerle

s.Current

peratingin

theportar

r‐supplyle

etconsume

therefore,

meetdem

analysisof

sizecatego

dthatduri

tioninsizes

mespecific

thoughsuc

ltareconsi

ure13isth

2014figur

rendissett

ultinrestri

tbypotent

rtobereco

elsofavail

estrictionsa

heO+Mm

a,butarec

elsbeingid

rrequireme

hereareflu

ndrequire

nittypeis

ieswherea

gthestudy

over50,000

circumstan

requireme

eredtoreq

decreasei

represents

ocontinue

tedavailabi

ialoccupier

eringfollo

bility,and

rebecomin

rketswhoa

rrentlyuna

ntified,iti

nts.

ctuationsin

ents.How

ndertaken,

nycapacity

periodreq

sq.ft.that

eswhereel

tsarenor

uireabesp

Commer

ure14OfficeS

availablefl

ustsixmon

taround20

lity,limitati

.

ingreducti

otentiallyc

evidentfr

reseekingt

bletofinds

evidenttha

themarket

ver,whent

itisevident

eficiencies

estswerer

ouldnotbe

ementsofu

allyassocia

kerespons

cialPropert

mmary(Floor

orspaceov

hsofthey

,000sq.ft.

ninchoice

nsfrom20

nstrainingi

msearches

establisha

itableacco

themarke

hichsugge

kenasana

asshowni

anbeiden

ceivedforo

accommod

der‐supply

edwithas

.

rthEastLin

MarketAs

pace)2009‐

erthewhol

ar,projecti

Theshort

ndtherefo

1to2013,

vestment

beingunde

nofficebas

mmodation.

isrestricte

stvaryingle

verageapp

Figure16

ified.

ffice

ted.There

canalsobe

ecificsingle

olnshire

essment

25



014

ofthe

ns

ningof

eactas

ndthis

takenby

close

Despite

inits

elsof

oach,

elow,

are,

user,

NorthEastLincolnshire

CommercialPropertyMarketAssessment



EvolutionPDRLtd

December2014 26



Figure15OfficeSummarybyunit,2009‐2014

5.26 Thetransactionlevelsequatetoapproximately30%oftheavailablestock,whichinan

oversuppliedmarketcouldbeexpectedtobe higher.Giventhattherewouldappeartobe

anappropriatelevelofchoiceandstockavailabilitytomeetdemand,suchlowlevelsmay

suggestlimitationsarisingfromtheprovision

ofpoorquality,secondhandstoc kintown

centrelocations, whichcontrastswithmodernofficeoccupierrequirements,whichareoften

regardedasbeingrequiredinagoodenvironment,providinggoodqualityaccommodationin

accessiblelocationswithorneartogoodlevelsofparkingspace.Anapproachwhich

supportsre‐furbishment

ofexistingunitsinaccessiblelocationsmayappropriatelyaddress

thisweakness.

5.27 Intermsofofficeaccommodationtherefore,itissuggestedthatpresentlythemarketis

relativelyevenlybalancedintermsofsupplyanddemand.Thereislimitedevidenceto

suggestthatthereareanyimmediatequantitativeorqualitativeissuesthat

needtobe

addressed,althoughthereisasuggestionthatthequalityofsomepropertiesmayneedtobe

overcome.TherecentrefurbishmentofunitsattheTownHallwithinGrimsbytowncentre

areagoodexampleofthenecessaryimprovementsthatmayberequired,althoughitmay

bepossible

thatqualitativeissuesmayalsobeovercomebynewaccommodationprovision

insuitablelocations.Growthintheprofessionalservicessectorssupportingsectorgrowth

mayresultinnewrequirementsarising.

5.28 Thedemandassessmentalsosuggeststhatprovisionoflargerunitsizesinexcessof20,000

sq.ft.couldalsobesupported.

However,suchprovisionismorelikelytobeforspecific

users,andwhilstitisappropriatetoensureappropriatesitesareprovided,itissuggested

thatsuchprovisionshouldbeprovidedonaDesignandBuildbasis .

5.29 However,theprovisionofnewofficeaccommodationisunlikelytobeundertaken

ona

speculativemarketbasis,giventhelo wrentallevelspertainingintheareawhichwilldeter

investorsanddevelopersprogressingsuchschemes.Asaresulttheneedforpublicsubsidy

maybenecessary.

OfficeSummarybyUnittype

(AverageUnits2009‐ 2014)

AverageEnquiries AverageAvailability AverageTransactions

NorthEastLincolnshire

CommercialPropertyMarketAssessment

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6.0. LANDFORDEVELOPMENT



6.1 Theprovisionoflandcapableofdevelopmentisanimportantfactorinconsideringproperty

marketconditions,asthiswillprovideanindicationoftheextenttowhichnew

accommodationmaybeprovided.However,theprimarydatacol lateddoesnotdifferentiate

ontheproposedintentionoftheuseofthe

land,norissufficientdataavailableto

conclusivelydifferentiatebetweenrequestsforlandforcommercialpurposesandthat

intendedforotheruses.

6.2 DuetothenatureofthewaythatdataiscollatedontheEvolutivedatabase,ithasnotbeen

possibletoundertakeasdetailedanalysisastakenfor

thatofindustrialoroffice

accommodation.Specifically,ithasnotbeenpossibletoidentifytransactionrates,and

thereforetheextenttowhichanyqualitativeissuesareidentifiedarethereforelimited.

However,itisconsideredthatthefollowinganalysisprovidessufficientanalysisinorderto

assisttheoverallunderstandingofthe

issueswithinthecurrentmarket.



 SupplyofLand



6.4 Thedatashowsthatoverthestudyperiod,averagelevelsoflandavailableforsaleequated

to732acres,distributedacrossanaverageof26separatesites.However,theannuallevel

ofavailabilityvaried,withgreaterlevelsoflandbeingidentifiedasavailablesincetheendof

therecession.

Thismayreflectgreaterlevelsofconfidencearisingfromimprovedmarket

conditionsandimprovedchancesofsalesbeingachieved.



Table2LandAvailability2009–2013

6.5 Detailedanalysisofavailabilityshowsthatapproximatelyhalfofthesitesavailablewere

identifiedinthesub‐5acrecategory.Whilstdetailedanalysisofindividualsitesizeisnot

available,itisnotedthatthelargestsitewasidentifiedat350acres.

6.6 Thenumberofsitesavailablewasbroadly

consistentacrossthestudyperiod,suggestingthat

thereislittlemovementwithinthemarket.ThedatashowninTable2abovealsosuggests

thatthismaybethecase,particularlyforthelargersites.

ACRES0.25‐3.03.1‐5.05.1‐10.011.0‐15.016.0‐49.0

50+80+TOTAL

2009 8.553.4526.2112.0054.30121.33350.00575.8

2010 8.253.4527.5012.00142.30121.33350.00

66 4.8

2011 8.5611.3620.9112.0094.33121.33460.00728.5

2012 9.967.9533.6712.00171.23121.33460.00

816.14

2013 8.6311.2833.6712.00231.23121.33460.00878

LAND‐AVAILABILITY2009‐2013

NorthEastLincolnshire

CommercialPropertyMarketAssessment

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

 DemandforLand



6.7 AverageEnquirylevelsequatedto28enquiriesperannum,andrelatedtoanaverage

requirementoverthestudyperiodof490acres.Ofthis,61%oftheenquiriesidentified

relatedtosizerequirementsinthesub‐5acrecategories,equatingtoanaverage

requirementof50acresinthis

category.



 Overview

6.7 Whenassessedcollectivelytheabovewouldindicatethatoverallsupply oflandoutstrips

thatofdemand,andthatintermsofthedetailedrequirements,overalltheneedsofthe

marketappeartobequantitativelyaddressed.However,analysisofFigure12belowshows

thattherearedeficienciesinsupplyinterms

ofsiteswithinthe3‐5acresand11‐15

categories.Over‐provisionoccursinthe5–10and16‐49acrecategories.



Figure12SupplyandDemandforLand2009‐2014

6.8 Duetotheextentofthenatureofthedatacollateditisnotpossibletoundertakefurther

detailedanalysisoftheconditionsrelatingtoland,nortoidentifywhetheranyqualitative

deficienciesexistwhichresultinconstraintsinthemarket.

6.9 Onthebasisofthedetailsprovided,however,

itisnotedthatoverallthemarketwould

appeartohavesufficientlevelsofsupplytoaccommodatemostneeds.Theareasofunder‐

supply(specifically3‐5acres)couldbeovercomebythesub‐divisionoflargersiteswhich

maystruggletosellasasingleunit,andthismay

suitsmallerbusinessoperations.



0.25‐3.0 3.1‐5.0 5.1‐10.0 11.0‐15.0 16.0‐49.0 50+ 80+

DemandandSupplyofLand

Averagesitesize(acres)

Available Enquiries

NorthEastLincolnshire

CommercialPropertyMarketAssessment

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7.0 CONCLUSIONS



7.0 Thisdocumenthasbeenpreparedinordertoidentifycurrentconditionsinrelationto

demandandsupplyforcommercialpropertywithintheNorthEastLincolnshirearea.It

specificallyfocusesontherelationshipbetweendemandandsupplyrequirementsof

industrialandofficeaccommodation,andtoalimitedextentalsoconsiders

theprovisionof

landtoaccommodatedevelopment.



7.1 Healthylevelsofprovisionanddemandareidentifiedinrelationtoindustrial

accommodation.However,inanumberofcases,demandoutstripssupplywhichresultsin

restrictedchoiceforinvestorsandconstrainstheeconomicgrowthofthearea.The

evidenceindicatesthatthe

marketisdecliningintermsofavailability,transactions and

enquiries,indicatingthattheareaisnotaddressingtheneedsofbusinessasawholeandas

aresultmaybelosinginvestmentopportunities.



7.2 Therearealsoanumberofqualitativeissueswhichpotentiallyneedtobeaddressed.The

cost

ofadaptation/refurbishmentofexistingbuildingstomeetnewrequirements,especially

onleaseholdpropertiesmayproveprohibitivetoinvestment,andtheprovisionofnew

buildingsoneitheraspeculativebasisorthroughdirectdevelopmentonreadilyavailable

sitesalsoconstrainopportunitiestosecurebusinessgrowth.However,noneofthese

activitieswillbe

undertakenonacommercialbasisasaresultofthelowpropertyvalues

withinthearea.



7.3 Analysisofdatawouldsuggestthatprovisionoffurtheraccommodationinthesub2,000sq.

ft.and20,000–200,000sq.ft.categoryisrequiredinordertoensurethatdemand

requirementsare

met.Mediumsizedaccommodation(i.e.2,000–20,000sq.ft.)is

consideredtomeetdemandrequirementsinquantitativeterms.



7.4 Qualitativedeficienciesinindustrialaccommodationalsoremaintobeaddressed.

Opportunitiestosupporttheprovisionofspeculativelybuiltunits,ortheprovisionofreadily

availablesiteswheredevelopmentcouldbe

progressedwithinreasonabletimescalesshould

beconsideredkeyrequisites.However,publicsectorsupport is likelytoberequiredto

facilitatesuchactivities.



7.5 Theofficemarketiscurrentlyover‐suppliedinquantit ativeterms,andthiswouldsuggest

thatallrequirementscanbeappropriatelyaccommodated,althoughdeficienciesexist inthe

provision

oflargerunits.However,itisconsideredthatsuchrequirementswouldbemore

likelytobemetbyaddressingtheneedsofspecificoperatorsonaDesignandBuildbasis.



7.6 Theanalysissuggeststhattheremaybesomeissuesinrelationtothequalitativedeficiencies

intheofficestock,

andultimatelythismayleadtoopportunitiesforinvestmentbeinglost.

Refurbishmentofexistingpropertiesmaythereforebeconsideredasasuitablemechanism

NorthEastLincolnshire

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toovercomethequalitativeissuesandencouragefurtherinvestmentinofficebased

businessoperations.Insomecircumstances,provisionofnewstockwouldalsoaddresssuch

requirements.However,giventhecurrentlevelsofsupplythereisnosuggestionthatnew

developmentofofficeaccommodationisurgentlyrequiredto

overcomecurrentmarket

issues.However,growthopportunitiesidentifiedwillresultinnewdemandarising.

Provisionofsuitableaccommodationshouldthereforebepursued.Again,giventhe

limitationsoncommercialviability,publicsectorinvolvementisanticipatedtoberequired.



7.7 Theanalysisofdatainrelationtotheprovisionoflandis

morelimited,andtherefore

drawingfirmconclusionsisdifficult.However,itisnotedthatingeneraltermsoverall

provisionoflandwouldappeartomeetdemandrequirements,althoughtherearesome

deficienciesinthe3.0–5.0acreand11–16acrecategories.However,itisconsideredthat

someof

thisdeficiencycouldbeovercomebythesub‐divisionoflargersites.



7.8 EvidencesuggeststhatpotentialgrowthinthekeysectorsoperationalintheNorthEast

Lincolnshireareawillgeneratebusinessinvestmentinthefuture.However,currentlevelsof

supplyofaccommodationmayresultinthatgrowthbecomingconstrained,

anddemandis

evidencedasdeclining,potentiallyasaresultoftheinabilitytoaccommodateoccupiers

requirements.Investmentintheprovisionofgoodqualitypremisesshouldthereforeplay

anintegralpartofanyfuturepublicsectorledstrategywhichseekstomaximisebusiness

opportunityandgrowth.





