Pooks Commercial Property Consultants of Shrewsbury report 2009 as a year which started with the thought that "The end of the world is nigh" but ends with perhaps a realisation that the industrial property market in the Border Counties area may be returning to the historic norm.

After 4 or 5 years of quite busy development activity across Shropshire, with new schemes not only in Shrewsbury and Telford but also in Whitchurch, Craven Arms, Ellesmere, Ludlow, Oswestry, etc., building on a speculative basis has ceased. Some schemes still have vacant stock but quite simply "the figures do not add up" given the cost of construction and lack of finance. Partner Charles Howell commented "In a market which has seen few transactions it is difficult to assess true values but for new building to be viable our developer clients advise us that industrial property land values in Shrewsbury need to be £160,000 - £175,000 per acre; perhaps £130,000 - £150,000/acre in Telford but below £125,000/acre in the smaller towns such as Ludlow, Oswestry and Market Drayton".

With a lack of new development, existing buildings have been reconsidered, especially as these are at a discount to any vacant new stock. Otherwise throughout the year Pooks arranged lettings across the Border Counties area of a range of industrial and warehouse units including space at Battlefield Enterprise Park, Shrewsbury; Aston Road, Wem and Wem Business Park; Atcham Business Park; Mochdre Industrial Estate, Newtown, etc.

Headline rents have not reduced significantly, remaining at around £3 per sq ft for older space and £4 - £4.50 psf for newer buildings but occupiers seek rent-free periods, shorter lease lengths and other more flexible arrangements.

Nervousness about commitment has been capitalised upon by Evans Easyspace, whose new "Business Centres" – supported by Shropshire Council and Advantage West Midlands in Shrewsbury and Ludlow, came on stream over the course of the year. Acting as local agents, Pooks secured a number of occupiers for the company at both complexes, with an encouraging demand for these new small workshop units.

This demand highlighted a difficulty. Owing to town planning policies, much employment land has a fairly wide use including offices and quasi retail trade counter units. These are more valuable and viable to develop and let, which in return is reflected in the asking prices for land. This has meant that "pure" industrial and storage uses cannot afford the new space. The laws of supply and demand, especially in a slower market, should redress this imbalance but a reason for the amount of vacant secondary retail space, especially in the smaller towns, could be the ready availability of trade counter units.

Thankfully there have not been any major factory closures locally, although the trend away from manufacturing towards storage and distribution continues. Unemployment across the area remains below the national average, ranging from (late 2009) 2.8% across Shropshire, 4.5% in Powys and 5.3% in Telford (UK average 6.2%) (source: Office of National Statistics).

Overall, Pooks consider that food production, waste recycling, health and educational support, and telecommunications are the sectors which show the most encouragement locally for the next year or so, although if brand new premises are required these would be built on a bespoke basis with a relatively long lead in time between requirement and occupation.

With increasing pressure from central government, industrial buildings whether existing or new, will need enhanced environmental efficiency, to be driven forward by a mixture of tax allowances and charges.

2010 will be a challenging year as companies cautiously re-stock and re-invest against an uncertain background involving the outcome of the general election, possible changes in regional development agency structures and the banks' continuing difficulties. However, the area has traditionally benefited from a relatively stable business environment compared to other parts of the UK and this strength should be reflected in the local industrial property sector, with hopefully a gradually increasing demand for space throughout the year.

Pooks act for a number of commercial/industrial property developers, currently with schemes at Greenhills, Battlefield Enterprise Park, Shrewsbury; The Old Creamery,

Aston Road, Wem and Upper Teme, Tenbury Wells as well as developments within Leominster Enterprise Park and Mochdre Industrial Estate, Newtown. Space is also available at Atcham Business Park (between Shrewsbury and Telford) and acting on behalf of retained clients we are seeking industrial property investments in Telford.

For further information contact:
Charles Howell at Pooks - 01743 276633