Expert monthly market commentary by Goadsby (Commercial)

With an increase in online sales, retailers are more and more needing warehouses to store their stock.

Demand has increased particularly for well-located high bay warehouses with good HGV access.

These retail occupiers are attracted by the comparatively lower warehouse rentals and business rates together with the high storage volume offered by eaves heights of 6-10m.

The question now being consistently asked by occupiers is how can a warehouse incorporate a small retail element either by way of a trade counter, showroom or sales area and is a planning application required?

The answer has been provided by the government in its recently released overhaul of The Town and Country Planning (Use Classes) Regulations 2020.

It means that light industrial buildings can, from September 1 this year, be used for the display or retail sale of goods to visiting members of the public.

Accordingly, any unit which has both B1c light industrial and B8 warehouse consent (and where the lease permits both uses) should be able to be used by a retailer for the storage, distribution and sale of its products, without the need for a change of use which takes time and cost to process and could be refused.

This will be welcome news to prospective purchasers and tenants and should provide a boost to new industrial/warehouse lettings and sales.

Even at the beginning of the lockdown there was unexpectedly good warehouse activity with new lettings and sales being agreed to companies with the following products/uses:

• Parcel delivery
• Pet food
• Clothing
• Cars
• Cycling products
• Building materials and kitchen appliances.

Early in April and May, the majority of demand was for small modern high bay warehouses with a Rateable Value of less than £12,000 where small businesses with only one property currently pay no business rates.

However, June witnessed a significant increase in demand for all sizes of industrial/warehouse units with several new requirements received of up to 100,000 sq ft for either existing or Design & Build solutions.

Developers should consider these changes when designing speculative industrial/warehouse schemes and the possible parking implications in catering for greater numbers of the public that could be attracted.

Overall, the government changes have come at exactly the right time to allow changing occupier requirements to be satisfied with greater confidence and allow young innovative companies the chance to expand and create employment.

By Chris Wilson, Director and Head of Commercial Agency, Goadsby.