< Previous10 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FINANCE NEWS Chancellor reveals new Bounce Back Loans for small businesses Chancellor Rishi Sunak has revealed a new ‘micro-loan’ scheme to help small businesses hit by The Bounce Back Loans scheme will give smaller firms access to 100% Government-backed loans The “fast-track finance scheme” comes after concerns were raised about the slow and burdensome application process that businesses have faced when trying to access existing The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days. Firms wanting to apply will have to fill out a two-page online self-certification form, which the Government hopes will unblock the backlog of applications being held up because of credit checks The Chancellor of the Exchequer, Rishi Sunak, said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.” Packaging specialist secures funding to help protect patients and NHS workers A Louth-based packaging company, which has seen demand for its products increase threefold to help the UK’s front-line battle against Coronavirus, has secured financial backing from Finance For Enterprise. Extrupol Packaging received the significant new order from one of its longstanding customers and was tasked with producing a range of sterile packaging, which will be used to protect sterile surgical equipment, uniforms and cleaning products, helping to reduce exposure to NHS staff working in hospital operating theatres, intensive care units and hospital wards. The products use special polymers to prevent contamination from entering into the hospital environment and with the large order secured, Extrupol Packaging realised the increased demand for raw materials would place pressure on its cashflow. Working with Investment Manager Tim Daniels, the packaging specialist secured a new £50,000 loan, funded using Finance For Enterprise capital, enabling the new products to begin rolling off the company’s production line. Extrupol Packaging has been operating in Louth since 1982. It is run by husband and wife team Simon and former doctor Marina Wittey. Today, the company turns over in excess of a million pounds per annum and employs 13 members of staff. The company regularly works with companies who supply the NHS and it produces a range of specialist products which are used in chemotherapy treatment, blood transfusions, as well as providing sterile packaging to protect garments during surgery. Marina Wittey, Financial Director of Extrupol Packaging, said: “The NHS response to COVID-19 has seen many hospitals review their procedures to create a clean, sterile environment to protect both patients and staff. In many cases, the amount of time spent cleaning hospitals and changing uniforms regularly to prevent the spread of infection has been escalated. “We have worked with a specialist supplier who provides sterile cleaning products, uniforms and surgical equipment to the NHS for more than 20 years. When our products enter the healthcare environment, they must meet stringent safety standards.” Chesterfield to receive £2.4m for HS2 site D2N2 Local Enterprise Partnership has approved funding of £2.4m for Chesterfield Borough Council to invest in HS2 infrastructure. The investment from D2N2, the Local Enterprise Partnership for Derby, Derbyshire, Nottingham, and Nottinghamshire, will go towards the development of the Chesterfield railway station area in order to capitalise on the economic benefits that HS2 will bring to the town. D2N2 will be funding the development through its Local Growth Fund allocation, a funding programme that enables D2N2 to invest in projects that benefit the regional economy. The funding announcement recognises the opportunity that HS2 will bring to Chesterfield and the northern Derbyshire area, which will contribute to the achievement of the East Midlands HS2 Growth Strategy. Chesterfield Borough Council is leading a partnership which includes Derbyshire County Council, Network Rail, HS2 Limited and East Midlands Railway to bring forward development at key sites in and around Chesterfield railway station. Previous studies suggest that around £25 billion of the £74 billion growth in the region could come into Chesterfield and northern Derbyshire, if anticipated investment decisions are made. The funding will enable a step change in developing and delivering Chesterfield Borough Council’s emerging HS2 Station Masterplan, which aims to bring disused sites back into use and maximise inward investment and growth for leisure, businesses and visitors. D2N2 Chair Elizabeth Fagan said: “HS2 will have a transformational effect, not just on Chesterfield but the whole of our region for generations to come. HS2 will greatly aid our efforts in upskilling our residents to meet the demands of a changing labour market.” Councillor Tricia Gilby, leader of Chesterfield Borough Council, said: “The development of the station Master Plan is a significant project for Chesterfield and northern Derbyshire’s economy. “Our approach to HS2 has been to seek and develop benefits that will help local people find skilled and well-paid jobs and a create a station and a destination to inspire future generations.” © Shutterstock /CKA 06-15.qxp_Layout 1 07/05/2020 10:38 Page 5www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 11 FirethornTrust secures £22m debt facility to deliver logistics scheme FirethornTrust has agreed a £22m debt facility with Federated Hermes to finance the construction of a 325,000 sq ft logistics scheme at Milton Ham, near Northampton. The 37-acre site was acquired from Travis Perkins at the end of last year and has planning consent for three units of 220,000 sq ft, 52,000 sq ft and 52,000 sq ft respectively. FirethornTrust plans to develop the scheme speculatively and will start on site in H2 2020 with a view to delivering the first units by the end of H1 2021. The site sits within the UK industrial market’s “golden triangle” just off Junction 15a of the M1 and adjacent to Prologis’ Pineham Park. This was FirethornTrust’s first acquisition in the industrial arena. The development financing is being provided by Federated Hermes’ Real Estate Debt Fund. Richard Whitby, Chief Financial Officer at FirethornTrust said: “Although we are operating in uncertain times, we remain committed to our core focus on the mid-box market and producing much-needed grade-A warehouse space. “The quality of this product coupled with the strategic location of the site lends itself to a variety of industrial and logistics operators. We had significant interest from multiple lenders but we are delighted to have agreed this loan facility with Federated Hermes who share our vision for the project.” Ben Patton, Head of Real Estate Debt at the international business of Federated Hermes added: “Despite the challenging market conditions, we continue to see attractive funding opportunities in certain markets. “Milton Ham presents an excellent opportunity to develop Grade A space in a key location and into a market with proven longterm occupier demand. It was a pleasure working with the Firethorn team and being able to support the continued growth of their business.” FirethornTrust was advised by the JLL debt advisory team and Stephenson Harwood LLP while Federated Hermes was represented by Paragon and BCLP. MANUFACTURING GROWTH PROGRAMME East Midlands SME manufacturers need urgent financial support as job losses loom amid coronavirus crisis SME manufacturers in the East Midlands are calling for greater and faster financial support from the Government, as they confront plummeting sales, production volumes and the prospect of job cuts amid the ongoing COVID-19 pandemic. The latest Manufacturing Barometer, which surveyed 112 firms in the region, reveals a stark picture of how the virus is affecting industrial confidence, with nine out of ten respondents experiencing a drastic decline in production volumes, while 88% are expecting sales to drop over the next six months. Conducted by the Manufacturing Growth Programme (MGP) and South West Manufacturing Advisory Service (SWMAS), the report also shows that 57% of firms believe they will need to cut jobs between now and October, despite the business grants on offer and the furloughing scheme designed to boost employee retention. The majority of manufacturing SMEs surveyed (85%) say they require urgent financial support to get through the current climate, with only 17% confident that the Government is doing enough to help the sector cope with the pandemic. Martin Coats, Managing Director of the Manufacturing Growth Programme (MGP), said: “COVID-19 is having a huge impact across the East Midlands, but it is especially problematic for our sector as manufacturing cannot be carried out remotely, relying as it does on physical interaction with machinery and parts. “Current restrictions and the ongoing lockdown measures mean that capacity is dramatically reduced, therefore the majority of businesses are reporting an unprecedented fall in production volumes. “Top of the wish list for SME manufacturers is stronger financial assistance and for Government to go ‘faster and further’. While the existing package of measures has been welcomed, there remains a pressing need for a deeper level of sector-specific advice and support.” For further information, please visit www.manufacturingrowthprogramme.co.uk/ market-data/barometer Marina Wittey, Finance Director at Extrupol Packaging 06-15.qxp_Layout 1 07/05/2020 10:38 Page 612 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk MANUFACTURING NEWS Derbyshire safety boot manufacturer competes base extension Second generation family owned safety boot manufacturer, Rock Fall, has completed the extension of “Unit 4” at its Wimsey Way site in Alfreton. The project was completed on schedule despite the outbreak of COVID-19. The firm said that construction was already almost complete and Rock Fall’s decision to use local contractors paid dividends. They now have an additional 5000 sq ft of warehousing space, as they ramp up stock due to a sustained demand for their range on a variety of national contracts. It will allow them to hold an additional 200 pallet spaces, totalling more than 20,000 pairs. However due to rapid expansion of the business, the senior management team are still looking for opportunities to acquire a much larger, purpose-built unit in the coming years. Speaking about the current order book the senior management team noted: “The start of this year has been exceptional, we had two 7 figure months in January and February and had a similar forecast through early March. “This has been driven by continually increasing the diverse range of styles we have available and working closely with our Authorised Distribution Partners sales teams to drive demand with their end-users. We are pleased to have the additional storage space to ramp up even more stock on our fastest moving lines.” Some of Rock Fall’s major distributors include household names like Bunzl, Travis Perkins, Toolstation, Amazon and Arco. SME manufacturers need urgent financial support as job losses loom Small to medium-sized (SMEs) manufacturers in the East Midlands are calling for greater and faster financial support from the Government, as they confront plummeting sales, production volumes and the prospect of job cuts amid the ongoing COVID-19 pandemic. The latest Manufacturing Barometer, which surveyed 112 firms in the region, reveals a stark picture of how the virus is affecting industrial confidence, with nine out of ten respondents experiencing a drastic decline in production volumes, while 88% are expecting sales to drop over the next six months. Conducted by the Manufacturing Growth Programme (MGP) and South West Manufacturing Advisory Service (SWMAS), the report also shows that 57% of firms believe they will need to cut jobs between now and October, despite the business grants on offer and the furloughing scheme designed to boost employee retention. The overwhelming majority of manufacturing SMEs surveyed (85%) say they require urgent financial support to get through the current climate, with only 17% confident that the Government is doing enough to help the sector cope with the pandemic. Martin Coats, Managing Director of the Manufacturing Growth Programme (MGP), said: “COVID-19 is having a huge impact across the East Midlands, but it is especially problematic for our sector as manufacturing cannot be carried out remotely, relying as it does on physical interaction with machinery and parts. “Current restrictions and the ongoing lockdown measures mean that capacity is dramatically reduced, therefore the majority of businesses are reporting an unprecedented fall in production volumes. “Top of the wish list for SME manufacturers is stronger financial assistance and for Government to go ‘faster and further’. While the existing package of measures has been welcomed, there remains a pressing need for a deeper level of sector-specific advice and support.” Notts manufacturer offers factory for COVID-19 equipment production A company in Nottinghamshire that makes parts for the automotive industry has offered its premises and equipment for the production of PPE or any other essential products in the fight against COVID-19. Interflex 2000 in Langar has temporarily furloughed its production staff as the company’s customers, which are mainly UK vehicle manufacturers, have also ceased production. In normal times, Interflex make and supply a range of NVH and sealing solutions for vehicles including door seals, interior trim, under carpet and boot seals. They also coat and cut materials such as the fabric used for arm rests. This means that the company has equipment that could be useful in a range of contexts, from storage to manufacturing, such as making components for sound absorption in ventilator equipment. The equipment that Interflex has available includes die cutting facilities to cut out components made from soft materials, as well as hot melt coating facilities and water based adhesive coating facilities. The company also has kiss cutting equipment suitable for sealing or spacer materials useful for seals around medical visors. Managing Director Jim Griffin said: “In the current situation, we are unable to manufacture for customers, but it seems a waste to have equipment and staff available at a time when the country urgently needs products that we could help supply. If nothing else, we have a large facility so can utilise space to help reconfigure packages or offer storage as required.” Interflex Managing Director Jim Griffin 06-15.qxp_Layout 1 07/05/2020 10:38 Page 7www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 13 MANUFACTURING NEWS Catering specialist adapts manufacturing operations to produce healthcare equipment A Derby catering equipment specialist has adapted all of its manufacturing operations to produce vital healthcare equipment to support the fight against COVID-19. Parry, which employs 65 people at its factory on Town End Road in Draycott, has responded to the national call to support key workers by increasing its output of stainless steel mobile wash basins, glove/mask dispensing units and knee operated sinks. The decision was taken after discussions with its workforce and staff worked over the Easter period to produce orders for NHS Nightingale in Manchester, care homes, prisons and supermarkets. All of this production is being carried out in accordance with Government regulations on social distancing and the firm has also introduced a supply of PPE, staggered lunch breaks and more wash stations to ensure its staff remain safe. Mark Banton, Managing Director at Parry, said: “As a lean and agile manufacturer, we were able to immediately switch our production from catering products to essential healthcare equipment, including vital wash basins that could be installed quickly in supermarkets, temporary hospitals or transport interchanges. “One of our key strengths is our ability to customise designs to suit specific applications and our design engineers are currently talking to a number of clients about modifying products to help prevent the possibility of contamination.” Sharp drop for manufacturing activity UK manufacturers reported the quickest falls in output volumes and total new orders since 2009 in the three months to April, while business optimism plunged at a record pace. That’s according to the latest CBI quarterly Industrial Trends Survey. The survey of 330 manufacturing firms saw domestic orders drop at a similar pace to the last quarter, while the fall in export orders accelerated. At the same time both business and export sentiment plunged at a survey-record pace. Manufacturers expect the quick fall in output in the quarter to April – the sharpest decline since the financial crisis – to precede a sharper contraction in the next three months, with firms reporting the weakest expectations on record. Additionally, manufacturers expect both new domestic and new export orders to fall at a much faster pace next quarter. Investment spending plans for the next year sank to a survey-record low for buildings and plant & machinery, with record proportions of firms particularly concerned about demand uncertainty and internal finance availability. Chesterfield manufacturer helps supply vital equipment to the NHS Label and signage manufacturer MTM Products is helping the NHS in its time of need. The Chesterfield-based business is manufacturing large quantities of front fascia overlays for the nurse call handsets used in the temporary hospitals being built in response to the Coronavirus pandemic. In total, MTM Products is manufacturing over 14,000 overlays for one of its longstanding medical sector customers. The first 5,000 have already been delivered. The turnaround for the project has been challenging, but like every business and individual in the UK right now, the team at MTM are rallying together to deliver the lifesaving equipment. MTM has a variety of customers who are also supplying products to the NHS and emergency services. These customers have asked MTM to continue trading so they can fulfil their responsibilities and supply essential equipment to health services in both the UK and Mainland Europe. MTM plan to continue manufacturing at both of its Chesterfield sites for as long as possible, whilst observing Government advise of social distancing and hygiene. Orders directly related to the fight against COVID-19 are being prioritised. MTM Managing Director, Ian Greenaway, said: “We are proud to be able to play our part in ensuring that the NHS and emergency services receive supplies necessary to fight the COVID-19 virus. We are part of a supply chain for many essential medical and life safety products and will do everything we can to maintain continuity of supply.” MTM employees Kev Harris, Martin Carline and Chrissy Hall © Shutterstock /Piyapong Wongkam Mark Banton, Managing Director at Parry 06-15.qxp_Layout 1 07/05/2020 10:38 Page 8PROPERTY NEWS Work starts on Northern Gateway Enterprise Centre in Chesterfield Work has begun on the new Northern Gateway Enterprise Centre in Chesterfield, to ensure the site is available for local businesses to move in to at the earliest possible opportunity and benefit the local economy. Chesterfield Borough Council’s contractor, Robert Woodhead Ltd, will take control of the site and begin groundworks on part of the Holywell Cross (Donut) Car Park in Chesterfield town centre as preparation for the construction of the new Enterprise Centre. Robert Woodhead Ltd have completed assessments ahead of the work beginning and have confirmed they will follow strict COVID-19 social distancing guidelines to ensure the safety of employees and the public. Councillor Terry Gilby, Chesterfield Borough Council’s cabinet member for economic growth, said: “We appreciate there may be concerns around any construction activity starting in the town centre right now, given we remain at a key stage of the national response to the COVID-19 outbreak. “The contractor will be working to the latest Construction Site Operating Procedures published by the Construction Leadership Council in response to the Coronavirus outbreak. “With these essential works progressing safely we hope to minimise any delay to the start of the main build and ultimately its completion. This major construction project will also help contribute to Chesterfield’s post COVID-19 recovery with the council’s requirement for Robert Woodhead Ltd to source local labour, supplies and equipment. “The project will result in high quality, flexible, office space being made available on easy-in and easy-out letting terms to businesses just starting out or looking to grow their company here in Chesterfield.” Tom Woodhead, Business Services Director at Robert Woodhead Ltd, said: “Over the last few weeks, we have been working with our industry peers, government and industry bodies to understand how the government guidelines and CLC Site Operating Procedures can be implemented on construction sites. “We have developed stringent operating procedures, risk and method statements to enable us to start on site to deliver this exciting project in collaboration with Chesterfield Borough Council.” Groundworks are likely to take around eight weeks to complete. Whilst these works are taking place the building design will be finalised, supplies of materials ordered and sub-contractors hired. These activities will put the project in a position to proceed to full construction later on in the year. The new Northern Gateway Enterprise Centre will accommodate a range of businesses within 32 office suites. It will also offer access to shared facilities and local business support services. The new centre is an important addition to Chesterfield Borough Council’s commercial property portfolio and a key component in Chesterfield’s post COVID-19 recovery. JV invests £17.6m into Leicestershire industrial scheme Barwood Capital, the Northampton-based UK regional real estate investment and development specialist, in a 50:50 joint venture with Merseyside Pension Fund, has agreed a £17.6m funding package for the Tungsten Park project in Bardon, an 11.25 acre site in Leicestershire. Tungsten Properties will speculatively develop a four-unit industrial scheme totalling 200,550 sq ft which is located near to Junction 22 of the M1, an established prime logistics location which has occupiers including Amazon, Bunzl, DHL, Nestlé and Volvo. The investment is through Barwood Capital’s Growth Fund IV, a five-year closed ended fund that is investing in UK regional property, driven by significant ongoing changes in technology, infrastructure and demographics and which to date has raised £49m. This is the first time that Merseyside Pension Fund has entered a joint venture with Barwood Capital, having previously also directly invested in Barwood Capital’s third growth fund, the 2017 Property Fund. Ed Henson, director, Barwood Capital, said: “Our investment in Tungsten Park Bardon has meant that we have secured a fundamentally core industrial warehouse site at a good value where there is limited supply and strong, long-term demand. Alongside Merseyside Pension Fund, we hope to play an important part in providing regional jobs and investment despite the challenges that COVID-19 has brought during such a difficult time for the economy and all households across the UK.” Jeff Penman, Managing Director, Tungsten Properties, said: “Being very mindful of current market uncertainties, our first partnership with Barwood Capital’s Growth Fund IV has come at a time when demand in the industrial market is strong over the medium term, especially in such proven regional locations as Bardon. We are very optimistic about the resilience and growth potential of this key UK sector which has been highlighted during the current crisis.” Winvic is the main contractor on the development. MWRE and Mather Jamie are the letting agents. 14 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk 06-15.qxp_Layout 1 07/05/2020 10:38 Page 9PROPERTY NEWS Work begins on new office complex at Leicester Waterside The redevelopment of Leicester’s Waterside area has reached another major milestone, as work begins on the first new office complex in Frog Island. Over the last three years, Leicester City Council has been working with its development partner Keepmoat Homes to acquire and prepare the 7.3-hectare site earmarked for the first phase of the Waterside development. Keepmoat has contracted Leicester firm Brackley Property Developments Ltd to construct the first of three proposed office buildings, which will provide a combined total of over 55,000 sq ft of new workspace. Brackley has now started work to build the new office building on the corner of Soar Lane and the A50 in Frog Island. The new building will provide 17,000 sq ft of office space. It has been designed to reflect the industrial heritage of the Waterside area and will feature a distinctive metal roof and a full height glazed front to the three-storey building. Construction is expected to take around ten months to complete. The new office will be the first part of the commercial development of the Waterside area, following Leicester City Council’s acquisition of the land and buildings in the area. The council, through its development partner Keepmoat, has so far invested around £5million in clearing and remediating the site ready for development. Keepmoat will also build over 350 new homes, along with parks and green spaces, as part of the wider redevelopment of the area. It is anticipated that construction of the first of the new homes will begin by early summer. Brewer to sell Burton-on-Trent site A former Molson Coors Brewery in Burton-on-Trent has been put up for sale, which could see a residential-led mixed-use development created in the heart of the town. The 5.77-acre site in Station Street, is situated five minutes’ walk to either the town centre or Burton-on- Trent railway station, and includes a keg fountain and large copper kettle. Built in 1864 the brewery comprises of a red brick complex consisting of a mix of two to four storey buildings. The brewery was previously connected to the still active Molson Coors site across Station Street by an overhead bridge until the last brew took place in December 2017 and the buildings were decommissioned the following year. Two of the buildings on site are Grade II listed due to their architectural or historic interest. The former brewery is part of the Borough Road Conservation area and has been earmarked to be part of the East Staffordshire Town Centre Regeneration programme, which includes plans for pedestrianising part of Station Street. Nick Hammond, director in the Advisory & Restructuring team at Colliers International, said: “This is an ideal opportunity to create a unique development in a location which is already primed for regeneration. “The local authority is looking for high-quality residential-led proposals, which complements the heritage of the site, while also boosting the local economy with potential for units along Station Street. This site is a rare opportunity to make a significant investment in the area.” Lincolnshire care home development given the go-ahead Planning permission has been granted for a care home on a Lincolnshire development that forms part of a wider residential scheme delivered by Charterpoint Group. East Lindsey District Council has approved plans for the two-storey, 66-bed care home which will be built on a plot alongside the residential development at Westfield Park, off Grimsby Road, Louth. Presented by care home specialist LNT Care Home Developments Ltd, the plans for the purpose-built residential care home include individual rooms for residents, communal spaces for socialising, dining and recreational use, car parking, landscaping, and a secure bike store. It is anticipated that between 50 and 60 jobs will be created by the development. Work is expected to get started imminently on the 2.2 acre site. Adrian Goose, Chief Executive of the Charterpoint Group, said: “Houses built as part of the first phase of Westfield Park are proving popular, and we are delighted that East Lindsey District Council has now awarded planning permission for a modern new care home as part of the scheme. “When completed, Westfield Park will feature a total of 240 new homes, plus the care home, creating a super community on the northern edge of Louth and close to the key amenities and services offered by the town. “LNT Care Developments Ltd is a company with considerable experience in the operation and construction of care homes for older people and we are pleased that the green light has been given for this latest scheme.” www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 15 06-15.qxp_Layout 1 07/05/2020 10:39 Page 10Armstrong house Offering a prime position in Grimsby, Armstrong House on Armstrong Street is ideally located. Close to the ports of Grimsby and Immingham, motorway links and the town centre, off-street parking is also available for all staff and visitors, meaning it’s convenient too. Our spacious, welcoming offices are located on the ground floor and are both secure and CCTV-monitored, giving you the ultimate peace of mind. At Armstrong House, the flexible in/out terms of contract mean confidence when it comes to affordability and with a range of office sizes there are opportunities for all types of business. If you require virtual office services, prices start from just £15 per month. For more information, or to discuss your office requirements, give Scotts Property a call today on 01472 267000 and ask about Armstrong House. Last remaining office suites Prime location in Grimsby Superb Location - - Close to the ports of Grimsby & Immingham - Great motorway links - Close to the town centre Secure off street parking High speed internet availability Easy in/out terms A range of affordable office sizes 3 3 3 3 3 Armstrong House, Armstrong Street, Grimsby DN31 2QE Tel: (01472) 310301 • Email: s.fisher@blmgroup.co.uk www.shutterstock.com/terekhov igor www.shutterstock.com/Yentafern 16-19.qxp_Layout 1 07/05/2020 10:42 Page 1www.shutterstock.com/Yentafern www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 17 COMMERCIAL PROPERTY T he continuing coronavirus crisis is having a two-fold effect on the commercial property market. As explored in our previous issue, the pandemic has led to a decline in investment transactions, leaving valuers unable to assess their properties, and stalling certain quarters of the market. However, the lockdown and other social distancing measures has led to a spike in online shopping and deliveries. Demand has been most keenly felt in the supermarket sector, with all of the nation’s biggest supermarkets drafting in hundreds – if not thousands – of extra workers to scale up their delivery services. But demand has been felt across a multitude of retail markets, with Amazon reporting a major spike in sales in its first quarter results. Meeting this unprecedented consumer demand has led to a rise in the need for short-term industrial space. Driven by demand for short-term space from supermarkets and the pharmaceutical and public health sector, some landlords are now considering short-term lettings to capitalise on the market shift. The latest ‘Industrial Outlook’ from real estate services firm, Cushman & Wakefield, reveals that despite the increase in demand for short- term space, total take-up of industrial space in the UK fell thirty-two per cent to 5.5 million sq ft across forty-one deals as many retailers operating in ‘non-essential’ sectors – such as fashion and homewares – temporarily close their online operations in response to employee health and safety concerns. The availability of industrial space edged up slightly during the first quarter of the year to 72.4 million square foot and is up by twenty-two per cent from the same period last year. The lockdown 18 Á The coronavirus crisis is changing the commercial property landscape with demand shifting in some quarters and spiking in others. Here we explore the effect on logistics and warehousing and how the office market is holding its own. © Shutterstock /Khakimullin Aleksandr coronavirus The coronavirus crisis is changing the commercial property landscape with demand shifting in some quarters and spiking in others. Here we explore the effect on logistics and warehousing and how the office market is holding its own. effect The 16-19.qxp_Layout 1 07/05/2020 10:42 Page 2is also disrupting construction activity, with several speculative schemes paused or delayed. So far, 2.5 million square foot has completed this year with another four million square foot underway. Despite the current uncertainty, Cushman & Wakefield says that the long- term outlook for the logistics sector remains positive, with COVID-19 likely to accelerate ongoing structural trends such as a greater penetration of online shopping and manufacturers and retailers considering holding more stock domestically to protect themselves against future supply chain disruptions. “The material uncertainty created by the COVID-19 pandemic and the practical implications of the government- imposed lockdown, including the ability to carry out inspections, have had an undeniable impact on the UK logistics market. While some long-term strategic requirements are still progressing, many have been put on hold and overall new enquiries are down in March,” said Bruno Berretta from Cushman & Wakefield’s UK Research & Insight team. “The uncertain demand outlook and reduced lenders’ appetite for development finance will curtail speculative development in the short- term. But the net impact on supply will depend also on the amount of second- hand space returning to market due to tenant defaults.” The escalation of the COVID-19 pandemic is also being felt in the investment market, with very few sales launched over the last few weeks and several deals put on hold. “Logistics investment deals that have completed have been to overseas buyers or Local Authority interest,” said Ed Cornwell, Partner in Cushman & Wakefield’s Capital Markets team. “Approximately half of the deals currently under offer are proceeding with the remainder are on hold. A number of assets have now been formally withdrawn from the market. Evidence from recent bids points to downward pressure on pricing for non-prime and / or short-term income assets.” The escalation of the COVID-19 pandemic is also being felt in the investment market, with very few sales launched over the last few weeks and several deals put on hold. However, the firm says the long-term outlook for the sector remains optimistic. Richard Evans, Head of UK Logistics & Industrial at Cushman & Wakefield, said: “New demand continues to be above average since the lockdown began with a further five million square foot of requirements in the two weeks from the 7 April and almost two million sq ft going under offer. “Investor demand remains positive for strategic holdings and/or assets where the fundamentals are strong, such as London/South East and Manchester. Many investors have taken the view that this is just a blip and have faith in the long-term integrity of the sector and are therefore keen to pursue opportunities once the immediate impacts of the virus have subsided.” Commercial property markets are well positioned to weather the storm and, in many cases, are continuing business as usual. Experts agree that the regional market is well positioned to continue after the pandemic though, as with all areas of the corporate world, nothing will be the same as before. Expect changes ahead. 18 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY © Shutterstock /pisaphotography 16-19.qxp_Layout 1 07/05/2020 10:42 Page 3NOW ON 24th February 2021 A well targeted event aimed at the Construction, Property, Business, Investment, Finance, Professional Services and related B2B markets. It has everything you require for a great day of networking and business generation. Face2face route2market – the opportunity to meet more potential clients in one amazing cost effective day, than it would take months out on the road. As the exhibition closes (circa 2pm), we will roll directly into an informal network lunch, with paybar – tickets are just £25 plus vat and can be ordered and paid for directly online. For further Information contact tina@businessshowsgroup.co.uk Register now businessshowsgroup.co.uk NOW ON 24th February 2021 The Bentley Hotel, Newark Rd, South Hykeham, Lincoln LN6 9NH Exhibition & Network - Property & Construction related industries - FREE TO ATTEND 16-19.qxp_Layout 1 07/05/2020 10:42 Page 4Next >