Stobart delivering hope to property sector

HOPES were raised yesterday of a pick-up in Scotland’s flagging commercial property sector as one of the biggest industrial lettings in months was agreed with haulage giant Eddie Stobart.

The firm will create about 40 jobs after agreeing a deal to move into a new building on the vast Eurocentral site next to the A8 between Edinburgh and Glasgow.

Property experts said the letting – understood to be the largest of its kind in at least six months – could spark further activity in the sector.

Scotland failed to escape the icy blast that swept through the commercial property market following the credit crunch, with projects put on hold and rental values falling. A number of major schemes were mothballed as developers and financiers battened down the hatches.

Douglas Smith, a property specialist with consultancy CBRE, said: “Volumes of speculative development through this market cycle have been at low levels, but this letting illustrates that well conceived projects which meet occupier needs will be successful.”

The industrial sector has proven more resilient than other areas of the commercial property market in the downturn.

However, recent research by Edinburgh-based consultancy Ryden found that “weak corporate confidence” had led the sector into a “flat spot” in 2011. Its 69th biannual Scottish Property Review noted that requirements for larger industrial units – almost completely absent from the market over the previous 18 months – were re-emerging.

“It is likely there will be a number of deals across the medium to larger industrial property market in early 2012,” Ryden predicted at the time.

Stobart is due to move into the “Pinnacle” building at Eurocentral later this month. It said the site would provide it with an additional distribution hub and allow it to meet “growing demand from central Scotland”.

The building, which stretches to almost 70,000sq ft, also provides the firm with refrigeration facilities and office accommodation.

Muse Developments pushed the button on a £21 million speculative scheme almost two years ago to construct the Pinnacle and Zenith buildings on a 17-acre site at Eurocentral, where more than 3,000 people are employed. That was followed by a £33m investment last March which led to two additional buildings and three smaller units.

Muse’s regional director Steve Turner said the deal with Stobart underpinned the company’s confidence in Eurocentral.

“At the time we made the investment, few in the commercial property sector were making similar commitments. Each of the units stand out against their competitors and we believe there remains a desire and demand for modern distribution and production units in key locations in Scotland.”

He added: “There are a number of other potential occupiers looking at the site at the moment.”

Stobart, which has about 40 sites around the UK and Europe, said the deal was for a 15-year period.

Paul Wedlock, project manager at Scottish Enterprise, which is Muse’s long-term business partner at Eurocentral, added: “Eurocentral has established itself as a leading distribution hub capable of attracting globally competitive companies to grow. This announcement is great news for Scotland and I wish the company every success.”

CBRE and Ryden acted on behalf of Muse.