Editor: When it comes to speculative development, most attention focuses on the big shed developments, but that’s by no means the whole story. Smaller-scale speculative development is on the rise, particularly when it comes to industrial space, and there are a number of good reasons for this.
SME manufacturing output grew at the fastest pace on record in the three months to July, according to the CBI’s quarterly SME trends survey, with the volume of total new orders increasing at the quickest rate on record. There are more than 287,000 manufacturing SMEs in the country, all of them needing space to work and grow.
There is also the trickle-down effect: projects such as the giant Dogger Bank wind farm off the coast of the North East, where we are based, attract myriad smaller suppliers and partners carrying out work for the larger companies driving the projects, all of which benefit from being close to the centre of operations.
Nevertheless, smaller-scale speculative development poses its own challenges and isn’t for the inexperienced. Most sub-50,000 sq ft spec developments are financed by company capital or bank funding, so you must be very sure of your market and money before taking the plunge.
Land available for smaller schemes also tends to be less straightforward than the open expanses of big shed schemes – land remediation will often be needed and change-of-use permission sought before a development can go ahead.
Local knowledge should also never be underestimated, whether that is being aware of the land that is available, knowing the businesses looking for space or being clued up on local authority needs and planning policies.
This philosophy has formed the bedrock of our work at UK Land Estates and has meant we now operate 28 commercial development estates across the North East. Our latest speculative scheme is a 45,000 sq ft development on a site in Gateshead formerly occupied by energy group Npower. Because we believe small can be beautiful.
Keith Taylor, managing director, UK Land Estates