Market ‘uncertainty’ leaves no room for Space Property

South-east industrial developer Space Property, which was set up by the co-founder of Chancerygate, David Johnson, is to be disbanded as a result of the ongoing tough market conditions.

Managing director Johnson, who set up Space in 2002, development director Alex Gale and commercial director Paul Thornberry will go their separate ways once the existing development pipeline up to 400,000 sq ft, and worth around £60m is built.

The company cited ‘the continuing uncertainty in the funding and development market’ as the reason for its decision.

Trader-developer Space does not have significant land holdings because most of the 1.5m sq ft it has developed since it was set up six years ago was sold to its joint venture partners. The partners – such as Legal & General at Charles Park on Crossways Business Park at Dartford already own the sites entirely.

However, the directors of Space will continue to work together on a separate business, Space Business Centres. They believe this concept is in a better position to weather the downturn, as demand for flexible business space is stronger than for straight industrial property.

Gale said the focus was now on the business centres rollout.

‘We have decided to discontinue other Space Property initiatives due to the importance we place on the Space Business Centres concept,’ he said.

Space Business Centres was set up last summer with a £37m fund, debt financed by Yorkshire Bank.

The trio said they would continue to work together to bring forward the seven Space Business Centre sites and were aiming to increase the size of the fund to £130m.

Gale added: ‘As a team we have enjoyed a high level of success in industrial development and want to keep that momentum within a niche sector of the market.’

Johnson will retain the right to the name ‘Space Property’ when the company disbands. Its three consultants Nick Turner, Keith Turner and Anthony Barber will cease to work for the company at that point.

Gale and Thornberry also plan separate ventures although it is not yet clear what the pair will focus on.