_Industrial market: New technology having positive influence on lease length
Technology influencing lease length
Connected technology is increasingly playing more important roles in our day-to-day lives, both for how we live socially and how we go about our work. The future of technology is in every aspect of our home lives, from alarm systems to Alexa, so it comes as no surprise that it’s playing a large part in how we work, too.
Rob Taylor, Head of Knight Frank's North West Logistics & Industrial team, believes that while new wave tech is already making our lives easier in the workplace, it has the potential to "both disrupt and enhance the operations of industrial occupiers and the efficiency of supply chains”.
Integrate technology
What do these disruptions and enhancements mean for you? Landlords need to stay on trend with their industrial occupiers' needs, which increasingly means better integration of technology into warehouses and distribution factories.
Research from Knight Frank found that the incorporation of new technologies had a positive effect on the length of leases, in the industrial market. This is because of the cost of implementing the new technology exceeds the construction cost of the base building.
The researchers add that these high fit-out costs mean that lease lengths of the mega distributions centres are extending, providing further "scope for yield re-rating for investors".
"It is not uncommon for an e-commerce provider to spend tens to hundreds of millions in fitting out their operating space with the latest technology as they push for increased productivity and optimising fixed costs in their supply chain."
Slow technological roll out
However, previous research from Knight Frank adds that these technological implementations will not be as universal, seamless or rapid as many visions of the future often manifest.
It adds that “our view is that new technologies will emerge unevenly across the market – serving to bring competitive advantage to those who are able to make the necessary investments and have the required levels of digital fitness.
We anticipate that autonomous or driverless vehicles and drone delivery will be key developments that industrial occupiers and landlords alike will need to respond to over the medium term.”
With this in mind, here are four industrial warehouses that have the potential to be fitted out with the latest that technology has to offer, as well as office space for the non-robotic species.
27,716 sq ft Industrial/Distribution for sale in Premier Park, Wakefield LS26 8ZA
For sale is this modern, detached warehouse which sits on 3.54 acres of land, providing a low-site density of approximately 18%, within the industrial estate Premier Park.
The freehold warehouse benefits from multiple ground and raised-level loading doors with an average height of 5.84m. It incorporates open-plan and cellular offices, designed with welfare, lighting and heating in mind, as well as large and secure service yards.
There are also 70 parking spaces. This unit has easy access to Junction 30 of the M62 motorway via the B6135 Castle Gate and A642. Wakefield city centre is located 5 miles south, Leeds is 7.7 miles north west and Castleford is 8 miles to the east.
203,200 sq ft Industrial/Distribution for sale in Cheney Manor, Swindon SN2 2QG
The freehold property is made up of six connected steel-framed warehouses. The roof has a combination of insulated steel, uninsulated steel and asbestos cement. There is an average of 10% skylights throughout.
Located in west Swindon, the warehouse has two tailgate loading doors and one level access loading door in the rear elevation for HGV loading from the large loading/hard-standing area. Internally, the warehouse provides a 5.87m eaves height.
There is ground and first floor ancillary accommodation. To the front of the site, there is a plot of land which is currently vacant and available by separate negotiation for either further parking or other storage uses, subject to planning permission.
The Cheney Manor sits approximately one mile northwest of the town centre. It's served by the M4 motorway and the Great Western mainline railway.
25,374 sq ft Industrial/Distribution for sale in North Tyne Industrial Estate, Longbenton NE12 9SZ
This steel-framed factory unit, with brickwork and insulated steel sheeting, has a double-pitched roof.
Internally, the single-story premises has reinforced concrete floors and an internal height of 4.5m. The front of the factory is a two-storey block providing a mixture of open-plan and private office accommodation.
To the rear of the factory is a more modern warehouse bay which is of similar construction, but which has an internal height of 8.9m. Externally, there is a service yard providing vehicles with access to both the original factory and the high bay extension by way of steel roller shutter loading doors.
There is also car parking space for approximately 34 vehicles. The estate is located on the north side of Whitley Road. It's approximately six miles north east of Newcastle City Centre and approximately one mile from the A19 Tyne Tunnel road.