At Droitwich Business Park in Worcestershire, SME businesses have wasted no time in snapping up four new speculatively developed units, with all space taken before or just after practical completion. Jason Rockett, managing director of Potter Space, notes that this is further proof of the key role small- to mid-box industrial and logistics (I&L) space plays in growing businesses.
Research carried out by Savills on behalf of Potter Space shows that this market is seriously undersupplied, forcing many businesses to make do with their existing space and suppressing their growth. Potter Space invested £12m in the 105,000 sq ft expansion at Droitwich Business Park.
Through their research with Savills, Potter Space found that 95% of units in the I&L property market are small- to mid-box, with 2.1 million people employed in them – 55% of the I&L sector’s employment. These units contribute £124bn of GVA per year into the UK economy.
However, it’s an overlooked part of the market. Potter Space found that suppressed demand of 63m sq ft could have been built and occupied, creating 94,000 jobs and directly contributing £3.2bn of GVA into the UK economy per year.
Demand is not being satisfied for various reasons – slowness of planning is one of them. Planners don’t quite understand what happens in these boxes. As investors and developers, they need to wave the flag more than they have done. Jason Rockett believes that a refreshed planning approach could help accelerate growth.
The main issue with development is the time it takes to get planning. Potter Space has just had a non-contentious planning application take two years to get through. Costs change in that time and they have to reassess viability.
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Certain non-controversial parts of the planning system should be outsourced, as with building regulations. The main issue with development is the time it takes to get planning.
They’ve got to have the land and the buildings to grow. There’s an exciting opportunity here for the small- to mid-box market that they really must grab on to. Potter Space is a leading industrial and logistics property company, focused on delivering high-quality flexible space for businesses.
Specialising in the sub-100,000 sq ft market, Potter Space passionately champions the ‘small- to mid-box’ sector that underpins the UK economy. The company’s annual report ‘BIG things in SMALL boxes’ shines a spotlight on the trends, challenges and opportunities shaping this vital part of the I&L market.
Formal recognition of I&L land as strategic economic infrastructure would make a big difference. Potter Space needs a clear signal from central government to local authorities that this is a high-priority area that is needed to deliver economic growth.
It would be beneficial to see a minister specifically responsible for the I&L sector to demonstrate that. With the right support, the small- to mid-box market can continue to play a key role in growing businesses and driving economic growth in the UK, much like diversity in design can boost the economy.
