Associate director at Innes England, Scott Osborne – who uses his in-depth knowledge to advise on commercial property and lease consultancy matters – considers how industrial units are giving small businesses a home to thrive.
Industrial units were once exclusively home to the likes of factories, warehouses and workshops – but now small businesses are moving into the recycled buildings and turning them into trendy gyms and quirky micro-breweries.
The business environment is tough, particularly in this day and age, and often the greatest hurdle for a new company to overcome is securing a suitable property and committing themselves to a commercial lease.
But the numbers are there and speak for themselves – over the past 18 months we have witnessed strong demand for small (sub 5,000 sq. ft.) industrial units, which are attractive as they provide more flexibility and choice for companies. In fact, the majority of property transactions have occurred in this sector and the demand is demonstrated by the strong rents in the market.
One example is the Strawsons Property development on the Old Mill Lane Industrial Estate, Mansfield Woodhouse, where business is well and truly booming just 15 months after the 21 industrial units – ranging from 1,100 to 4,000 sq. ft. – were constructed. Demand was so great that a dozen of these units were let within six months and to date, 17 are now occupied.
One of the tenants is Prior’s Well Brewery, which has brought homemade beers back to the former mining town after the closure of Mansfield Brewery in 2002. The owners have gone a step further than just brewing the beer and have set up an oak-panelled bar on the first-floor mezzanine of the industrial unit.
Would these tenants have sought business premises or taken the plunge to start their new venture if such units were not available? Who knows? Years ago, one would struggle to envisage a start-up micro-brewery setting-up shop in an industrial unit. One thing is for certain: the developer is happy and the 17 new tenants are happy too.
We often hear about big businesses and how the economy and political landscape is affecting the way they trade, their profits and staff numbers. But what about those smaller companies, the ones who often go unnoticed? After all, if it wasn’t for the late Steve Jobs and his business partner Steve Wozniak starting Apple in a garage in California in the 1970s, where would technology be today? It is small disruptive businesses who make a real change, paving the way for the next generation of entrepreneurs.
The success at Old Mill Lane Industrial Estate is not a one-off. A smaller development – known as Lewis Industrial Estate, just off Radford Road, in Hyson Green – is also enjoying success following speculative construction by Nottinghamshire property firm BSP Holdings. The likes of Screwfix and Edmundson Electrical have committed to long-term leases and another proposed scheme at Beeston Business Park is due to start on site in the near future.
Paul Singh, director at BSP Holdings has confirmed that the main reason they decided to develop the Lewis Industrial Estate was in response to the serious lack of industrial accommodation in Nottingham. They started with no tenants and by the time the steel work had gone up, could have filled the development twice over with national occupiers.
CrossFit Nottingham, which provides strength and conditioning training, started its life in a small industrial unit in Little Tennis Street. The specialist gym had to move to larger premises in 2013 to accommodate its growing popularity.
During 2016, there was record take-up in the market yet industrial supply in Nottingham is now at a 10-year low. The pent-up demand, or its demand by occupiers, has been shown to exist but it can be difficult to reassure commercial property developers that this is the case.
The facts are clear: in Nottinghamshire, there is a distinct shortage of commercial property and all forms of speculative development are warmly welcomed – these units are a good barometer of the local economy. Commercial property plays a vital role in the economy both as a direct and indirect employer; retail, financial and business sectors are impacted as a result of commercial development.
So perhaps it’s worthwhile to note that new start-ups or small businesses need accommodation; in our opinion if you build it, they will come.