Introduction
5.1 This section considers the more detailed issues related to supply and demand within the County as a prelude to assessing the future need for land.
5.2 The section presents the comments of private sector stakeholders on Rutland’s industrial and office property markets. The industrial market refers to accommodation for manufacturing, storage, distribution and warehousing purposes including smaller workshop premises.
5.3 Private sector stakeholders made a range of comments regarding the local market. Their views have been summarised in a series of tables. Table 23 provides a breakdown of the general comments received on the County’s property market.
Table 23 – Property Market Comments – General
Contact Comment
Local Agent Rutland, relative to its size, has a very strong market and gets a lot of inward investment (primarily to Oakham), for several reasons:
• Although rural, the County sits in the middle of a large catchment area, which includes East Leicestershire, Nottinghamshire and Peterborough
• There is little available land in surrounding districts • There is demand from established businesses looking to
move from less attractive locations in Corby.
Rutland also has a body of established local businesses who are very loyal and always look to expand within the County.
However, the local land supply does not match demand. In particular there is a shortage of freehold/long leasehold sites.
Local Agent Where land is available and being marked usually reasonable interest from existing Rutland based firms looking to expand. However, in some instances landowners have unrealistic value expectations in terms of local market conditions, so deals not being done.
Source: BE Group, 2013
5.4 Table 24 provides a summary of the comments received from stakeholders with regards to the local industrial property market.
Table 24 – Property Market Comments – Industrial Contact Comment
Regional Agent The first group of properties being marketed at Oakham Enterprise Park are proving popular with local businesses. Rents of up to £60/sqm are being achieved.
It appears that Oakham Enterprise Park will be a focus for demand from local micro and small firms while larger companies (including regional and national firms) focus their interest at Pillings Road, Oakham.
There is a shortage of freehold space. Receive regular enquiries from established businesses with the capital to buy property, or consider self-build options, if the land is available.
Local Agent Demands is very local, and primarily from existing businesses that already occupy space in the County’s industrial estates. Rents fairly stable across Rutland.
Station Road Industrial Estate, Uppingham is isolated down a narrow cul-de-sac. Any businesses which depend on passing trade will struggle at this location. Vacant units can be slow to let.
Local Agent There is demand for property in the rural industrial estates and business parks of the County. Assumes there will also be demand at Oakham Enterprise Park, despite its peripheral location. Rents may be lower than normal, however, as the Enterprise Park (and other rural schemes) do not have infrastructure and public and transport that larger business parks have.
Local Agent There is a shortage of small warehouses of up to 186 sqm and basic terraced workshops. Average rents are £50/sqm.
Station Road Industrial Estate, Uppingham has constrained access and lacks affordable premises that could meet the needs of new and expanding local businesses.
Source: BE Group, 2013
5.5 To understand agent and developer comments in more detail, the performance of multi-let industrial schemes in Rutland are compared. Details are shown in Table 25. The multi-let schemes shown are not a totally comprehensive list; it is a selected sample as it is not always possible to identify all existing schemes. Nor is it possible to get the required information on all schemes, e.g. some people will not co-operate. However this remains a good sample of the schemes out there.
5.6 As can be seen, industrial schemes in Rutland appear to be performing well. Despite the persistence of recessionary conditions, most are fully let. High occupancy rates occur not just in the main economic centres of Oakham and Uppingham, but across the County. Occupancy rates in rural schemes are as high, and often higher, as those in the main settlements.
Table 25 – Industrial Multi-Let Scheme Performance Scheme Name Total
Floorspace, sqm No. Units (Size Range, sqm) Occupancy Rate Comment Fernie Business Units, 24 Pillings Road, Pillings Road Industrial Estate, Oakham 276 6 (46 each)
100 Bowden Properties own Recent development of good quality, small workshops/storage units in an existing industrial estate
Secure site
Fully occupied for some time
Also offers 1-2 sqm self storage containers, available at £728/year Fernie Business Units, Station Road, Station Road Industrial Estate, Uppingham 836 9 (130-557)
100 Bowden Properties own Successful local scheme, dominated by trade and motor trade occupiers Secure site
Fully occupied for some time Glen Industrial Estate, Off Bourne Road, Essendine 1,828 12 (51-454)
100 Heys Group own
Dominated by trade/motor trade uses
Occupiers include Noble Interiors and Snowboy Systems
Established small industrial scheme, offers moderate quality space to local firms
Key scheme serving the east of the County Wireless Hill Industrial Estate, Wireless Hill, South Luffenham 14,196 7 (62-11,168)
100 Small rural industrial estate in an isolated location
Most space is occupied by C S Ellis Group (Haulage) and Knight Farm Machinery Market Overton Industrial Estate, Ironstone Lane, Market Overton 10,159 33 (14-834)
100 Substantial rural industrial estate
Key scheme serving the north of the County, also a key source of mid-sized industrial units
Occupier include Lazy Lawn and Rutland Lighting
Scheme Name Total Floorspace, sqm No. Units (Size Range, sqm) Occupancy Rate Comment HGV access constrained by a narrow Long Row Business Park, Long Row, Oakham 852 7 (109-201) 71 Sub-divided older industrial property with raised loading bays Range of occupiers including plumbers merchants, and a Gym Located in a primarily residential area. Trade/motor trade units to the north Ashwell Business Units (Workshop Units), Ashwell Road, Oakham 227 4 (33-70)
50 Rutland County District Council own
Recently refurbished industrial units, part of the larger former Ashwell Prison site (Oakham Enterprise Park)
Two units are let, two are not available
Offered on 3 year leases Office space also
available (see below) Source: BE Group, 2013
5.7 Table 26 provides a summary of the comments received on the local office property market.
Table 26 – Property Market Comments – Office Contact Comment
Regional Agent The local office market is weak. Have not had any enquiries for office space in Rutland for 3-4 years.
Local Agent There is a shortage of affordable premises, with existing major schemes are priced to the higher end of the market. Specific shortages are for starter and grow-on space of 14-186 sqm.
New space would need to go in Oakham or Uppingham, on sites with sufficient car parking and broadband access.
Average rents are £70-80/sqm for moderate quality space.
Local Manager Manage the Rural Business Community, Seaton. The Community opened just over a year ago and has enjoyed good demand since. Existing occupiers are a mix of start-ups and existing micro businesses. Most are local but have had companies moving in from as far away as London.
Contact Comment
The Community receives an average of one enquiry per week. Most enquiries are from Rutland businesses, but The Community also receives regular enquiries from Leicestershire.
Rents are £247/pcm for a desk, £500/pcm for an office.
Local Agent The first phase of Uppingham Gate was delivered at the height of the recession. The space was too expensive for the market at that time. Agents are hopeful of increased demand as the national market improves
Most office space in Rutland is located above shops in Uppingham and Oakham. Demand for such space is very low at present, although the local retail market is performing better. Rents have stayed static over the last five years.
Source: BE Group, 2013
5.8 To understand demand in more detail, the performance of selected multi-let office and mixed schemes is shown in Table 27. Again the multi-let schemes shown are a selected sample.
5.9 There are only a few multi-let office schemes in the County, although a range of single occupancy offices are also available in Oakham and Uppingham town centres. Generally, these schemes perform well. Phase I of Oakham Office Park is highlighted as a particular recent success, with units selling quickly to a number of high profile occupiers. Sale prices of £1,600/sqm were achieved, although this did not match the high build costs (around £1,950/sqm) of the scheme. Phase II is being marketed as design and build options which, at the time of writing, were attracting only limited interest.
5.10 Only Uppingham Gate has a particularly low occupancy rate. The consensus among stakeholders is that this is due to the quality of the building and the rents quoted (£130/sqm-£170/sqm), which are too high for the area. The owner has approached the Council, suggesting that it could lease the building and then sub-let to local start- up and micro businesses. The Council is considering this as a medium/long term option.
Table 27 – Office and Mixed Multi-Let Scheme Performance Scheme Name Total
Floorspace, sqm No. Suites (Size Range, sqm) Occupancy Rate, percent Comment Oakham Office Park (Phase I), Saddlers Court, Oakham 2,323 9 (163-457) 100 High specification, self-contained offices Premier office scheme for Oakham and Rutland
Occupiers include Education City and Ruddle Merz Phase I was completed in 2009 and proved popular, with all units selling quickly
Prices of £1,600/sqm were achieved Phase II (2,323 sqm) has been on the market as design and build options. Little interest in these over the last four years Glaston Hall, Spring Lane, Glaston 907 13 (14-455) 92 Converted Grade II listed stately home, located off the A47 Offers both self contained space and serviced facilities Rents are £100/sqm Offers good quality suites to a range of occupiers including Smithers Purslow Consulting Engineers Ashwell Business
Units (Office Units), Ashwell Road, Oakham 185 6 (15-71) 83 Rutland County Council District Council own Recently refurbished office units, part of the larger former Ashwell Prison site (Oakham Enterprise Park)
Rents are £140/sqm plus a service charge of around £70/sqm Offered on 3 year leases
Scheme Name Total Floorspace, sqm No. Suites (Size Range, sqm) Occupancy Rate, percent Comment Uppingham Gate (Phase I), Ayston Road, Uppingham
493 10
(104-247)
20 Modern office building, prominently located at the junction of the A47 and A6003 Rents are £130/sqm- £170/sqm
Scheme has proven unsuccessful with only one main occupier, a dental surgery The consensus among stakeholders is that the quality of the building and the rents quoted are too high for the area
The owner has suggested that the Council could lease the building and then sub-let to local businesses
Space for a phase II development (658 sqm) to the rear Source: BE Group, 2013
Summary
5.11 Rutland has a primarily local property market in both the industrial and office sectors. However, the County does attract a reasonable amount of inward investment, relative to its size. This reflects the wide catchment area that surrounds Rutland, the lack of available land in surrounding districts and the general attractiveness of the County as a place to work in.
5.12 Inward Investment is generating some demand for land and larger, freehold properties. However, most land requirements are from existing local businesses looking to expand. As is shown in Section 8.0, despite the recession there are a range of large local employers with both the desire, and the capital, to grow. However, in some cases the unrealistic value expectations of landowners mean that deals are not being done and these requirements are not being met.
5.13 Industrial need is for small warehouses of up to 186 sqm and basic terraced workshops. Demand is from local firms and rents of £50-60/sqm are being achieved.
5.14 Initial marketing suggests that Oakham Enterprise Park will be a popular location although most demand to date (for the existing vacant units at least) has been from local firms. Conversely, Station Road Industrial Estate, Uppingham has constrained access and lacks affordable premises that could meet the needs of new and expanding local businesses.
5.15 The office market generally meets the needs of local service sector businesses. Discussions with agents suggest that demand is weak at present, both for the high quality offices of Uppingham Gate and for the budget/moderate quality suites of Oakham and Uppingham Town Centres. If there is a shortage of office space, it is for affordable suites, of 0-186 sqm, which could meet the needs of new and expanding local businesses. The present market probably does not support the development of further high specification offices at Uppingham Gate or Oakham Office Park, at least in the short term.
5.16 Rural business schemes are performing very well, providing affordable premises to start-ups and existing micro businesses who wish to operate outside of Oakham and Uppingham. Schemes such as the Rural Business Community, Seaton and Glaston Hall report strong demand and have wide catchment areas, extending into neighbouring counties.