Capital Industrial LLP
Industrial and warehouse units with good loading and parking facilities
During Q4 2013 and Q1 2014, the landlords, in conjunction with Strettons Development Consultancy, redeveloped part of the Leyton Industrial Village Estate with Strettons' Industrial Agency team instructed to market and let the newly built units.
Phase one of the development was known as “The Terrace” and comprised of 20 units, 10 which were around 1,000 ft2 and the remaining ranging from 1,500-2,200 ft2. The phase one development completed in September 2013. In late 2013, the rents achieved on the units were around £11.00-12.00 ft2 however, in 2014, we managed to achieve £13.00 ft2 to £15.00 per ft2 as result of lower supply in the market. The main interest came from the food and construction sectors. Being brand new units located in a well-established industrial location, the threat of residential development which had previously resulted in tenants moving from areas such as Hackney and New Spitalfields is unlikely. All leases were granted for 5 years with a rent review in year 3 with no incentives (rent free).
Recently, there have been a few tenants who have decided to exercise their break, however, all leases were granted for 5 years with no breaks or rent free. We are now seeing rents being achieved around £23.00 - £24.00 per ft2.
Phase Two, or "Block B", completed in June 2014 and was comprised of six units of 1,000 ft2, two of which are 4,000 ft2 and one, 6,000 ft2 unit. We agreed the letting of the 1,000 ft2 units at the asking rent of £16.50-£16.63 ft2 all let for 5 years, rent review in year 3 with mid-term tenant break options. Again, due to the lack of supply within the Leyton area and being brand new units, we experienced occupiers offering over the asking rent.
However, with the larger 4,000 & 6,000 ft2 units, it was a bit difficult to justify the asking rent. We started off by quoting £14.00 ft2 (4,000 ft2) and £12.00 ft2 (6,000 ft2) but in October 2014 we reduced the rents to £12.00 ft2 (4,000 ft2) and £11.00 ft2 (6,000 ft2) to attract interest. After reducing the rent for the 4,000 ft2 units, a prospective tenant agreed to pay a premium rent of £14.00 ft2, £2.00 ft2 more than the asking rent, so a shorter lease of 3 years would be agreed.
The tenants have decided to exercise their break on the 6,000 ft2, and we are currently marketing the unit at a quoting rent of £13.50 psf. From the initial marketing, we have interest from creative and technology users.
We at Strettons believe that the development has contributed to driving the rents upwards in the immediate and surrounding area.
020 8509 4428