Commercial Property: Bilston Glen is a rare event in development

Published on 29/12/2008 18:15

WORK is now under way on the second phase of the Bilston Glen Industrial Estate at Loanhead on the outskirts of Edinburgh, with Colliers CRE and Knight Frank appointed joint letting agents.

Bilston Glen used to be one of the deepest coal mines in Europe. It was closed down in 1989 and the decision by J Smart & Co (Contractors) to go ahead with the second phase is seen as testament to the early success of the park, which is one of the few speculative industrial developments under way in Scotland.

Industrial units are in short supply. There is a lack of good, second-hand industrial estates and there is a poor development pipeline.

So the concentration is on enhancing what is already there and two star performers in this respect are Westway in Renfrew and the Brucefield Industrial Park in Livingston.

Westway is a joint venture between the Moorfield Group and an American fund. Agent DTZ has secured lettings totalling more than 275,000sq ft there over the past year and at the smaller Brucefield Industrial Park – formerly owned by the Livingston Development Corporation – it has brought in tenants to over 50,000sq ft.

Both schemes are managed by forward-thinking, pro-active investment companies that have rebranded and come up with substantial marketing budgets.

Ross Sinclair of the DTZ industrial team says: "While we wait for the market to recover, the meantime will see investors and property companies with more time available to devote to existing stocks such as Westway and Brucefield.

"This should allow them to unlock more asset management opportunities and otherwise create better value from existing assets than might have been achievable in the previous market conditions we were experiencing.

"Where we previously had a healthy development pipeline across all sectors we are now experiencing a significant shortage of new development and construction work.

"This has altered the strategy of contractors tendering for work as they are now much keener to secure the work to ensure that they maintain their flow of business. The emergence of distressed sellers is undoing a lot of the progress made on bringing rental and capital rates forward."

He adds that with Scotland, and not England, abolishing rates on vacant industrial sites it is reasonable to expect that an occupier who could operate from either side of the Border would be attracted south by landlords keen to get space off their books and lowering rents accordingly.

He says: "It has been called commercial vandalism – it is distorting the market."

One of his colleagues, Peter Bacchus, says that in the trade distribution market, sheds in Scotland do not attract the big food retailers, which develop their own purpose-built storage facilities.

He adds: "However, if the retail side gets worse, as everyone suspects it might, other operators who currently use third-party logistics companies might look to Scotland for smaller, regional distribution centres.

"Instead of having large sheds in Yorkshire and the Midlands, it might be more effective to have warehouse premises in Scotland."

He says planning authorities will give developers a list of industrial sites but many are not capable of being developed because of constraints such as infrastructure and utilities.

He adds: "I am sure these issues are being addressed by Scottish Enterprise. It will have to look at ways of intervention to ensure the capability of a development. There is a lot of land which is zoned as industrial but is not currently capable of being developed."

SNP to sign deal on new headquarters

AFTER a prolonged search, the SNP is poised to sign a deal to lease premises close to the Scottish Parliament as its new headquarters. It is taking just under 2,000sq ft on the third floor of Gordon Lamb House, the Keiller Central development at Holyrood, moving from its current HQ in McDonald Road, Edinburgh. On the top floor of the development is News International, which took 1,278sq ft earlier this year at a premium of 26 per sq ft – and it is understood that the SNP rent negotiations are centered on the 21 mark. Agents for Keiller are Colliers and Jones Lang LaSalle.

THE Muir Group has won a 121.7 million contract from the Unicorn Property Group to build a Grade A office complex on the Waterfront in Dundee. DundeeOne will consist of two buildings totalling 100,000sq ft for occupation mid-2010. Agents are Graham & Sibbald and Montagu Evans.

THE Glasgow office of Gerald Eve will handle all rating work in Scotland for pharmacy and beauty chain Alliance Boots as part of a major five-year contract. The Gerald Eve rating team beat eight rivals for the deal, which covers 2,700 properties UK-wide – about 200 of them in Scotland – with a rateable value of 100m.

SCOTLANDART.COM is moving from its gallery in Giffnock to a new gallery at 183 Bath Street, Glasgow, taking 926sq ft on a 15-year lease at 17 a sq ft. Cushman & Wakefield represented landlord Bath Street Properties.

THE Scottish Shellfish Marketing Group is expanding at Motherwell Food Park, Bellshill, taking a 5,455sq ft unit on a three-year lease at 28,000 a year. It already occupies a packing and processing factory at the park. The Bellshill operation incorporates live shellfish holding tanks and production lines. Jones Lang LaSalle acted.

T-MOBILE has signed 15-year lease on a 1,781sq ft unit at Glasgow's Buchanan Galleries shopping centre. Culverwell and CBRE London acted for owner Buchanan Partnership – a partnership between Land Securities and Henderson Global Investors – with Eric Young for T-Mobile.

KNIGHT Frank has sold what is describes as the architecturally unique Pyramid Building in the Bilston Glen Estate at Loanhead outside Edinburgh to Survey Solutions Scotland (DTZ acting) for above the 600,000 asking price. The pyramid-shaped office building was sold on behalf of Hills.

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