Suffolk enjoys warehousing boom as more businesses flock to region
- Credit: Jaynic
A mega-sized warehouse is fast taking shape along the A14 – as Suffolk’s commercial property market hots up.
The county’s warehousing and logistics sector has come roaring out of the pandemic with demand for larger warehousing units greatly outstripping demand as developers start to tap into the county’s huge potential as an e-commerce and storage hot-spot.
Other parts of the county’s commercial property sector such as industrial, retail, leisure and high-grade office space are also starting to wake up after being hit by the pandemic sledgehammer. Shops, though, and offices have been particularly hard hit and may need time to adjust to new post-pandemic realities, say local property experts.
Developer Jaynic’s 870,000sq ft mega-building for Belgian logistics company Weerts at Suffolk Park in Bury St Edmunds is fast emerging along Suffolk’s main artery road from the Port of Felixstowe to the Midlands. It is one of the largest in a series of property deals which are likely to have a massive impact on the regional economy over the coming years.
It occupies a 42 acre site, and has joined others including Chinese consumer goods importer M H Star in choosing to locate itself at the 114 acre Suffolk Park which is earmarked for 2m sq ft of business, distribution, and industrial space.
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And with the newly-won Freeport East status for Felixstowe and Harwich ports and planned satellites such as Gateway 14 at Stowmarket – which is currently seeking planning permission – developers and estate agents see much to be cheerful about as Suffolk emerges from the coronavirus crisis.
It is estimated that Freeport East alone will create 13,500 jobs and give a £650m boost to the UK economy.
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Part of the attraction of Suffolk – and particularly its main artery trunk road the A14 – is that it is cheaper than other places and lies close to the port, said Phil Dennis of Savills’ regional commercial team.
“It’ll come as no surprise that high street retail has felt the real effects of Covid and it’s struggling and it’s going to have to find new ground,” he explained.
“The flip side of the struggle on the high street is e-commerce is booming and you probably just have to look at what you are doing and I’m doing and your neighbour’s doing and the number of vans delivering multiple times a day (to households).”
Historically, container ships offload at Felixstowe and goods are swept up along the A14 to the “Golden Triangle” of logistics in the Midlands, he explained.
“Now what’s happening is they are saying: ‘Let’s offload our containers locally.’”
There are seven sites designated as part of the new Freeport East – with full details yet to emerge about all the perks they will enjoy as part of government plans to boost regional economies. Felixstowe Logistics Park (76 acres), Bathside Bay at Harwich (301 acres) and Gateway 14 at Stowmarket (156 acres), PD Logistics at Felixstowe (21 acres), Uniserve at Felixstowe (26 acres), Port One at Great Blakenham (55 acres) and Horsley Cross in Tendring (35 acres) are set to enjoy a range of tax or customs benefits – such as not having to pay duty until goods are moved out of them and some duty exemptions as well as Stamp Duty Land Tax (SDLT) relief to March 2026. Other inducements include business rates and National Insurance reliefs, said Mr Dennis.
Companies are beginning to position themselves and look for sites to snap up as the advantages of basing themselves in the freeport zones or wider Suffolk and north Essex become clear.
Among these are online homeware goods retailer FDS – operating under brand name Costway – which recently signed a 20-year lease on a 143,000sq ft distribution centre at Port One Logistics Park in Great Blakenham and made the move from Ransomes Europark.
“There’s generally a lack of supply,” said Mr Dennis. Back in the early 2010s after the Credit Crunch of 2008/9, the commercial property market was in a dire state with occupancy rates very low. Today, after a different shock to the economy there is “almost” a waiting list in some places, he said.
That has led to rental growth – although rates are still far more attractive than in London or Essex – around £7.50/sq ft compared to £10/£10.50/sq ft in somewhere like Basildon, he said. Suffolk is also accessible and has a trunk road system.
Developer Nic Rumsey, who heads up Jaynic, is involved in a number of schemes along the A14 and has a strong belief in it as a location.
“Felixstowe is going to become ever more important,” he predicted. There was a dearth of opportunities along some of the established Midlands warehousing stomping grounds, he suggested, while the A14 from Felixstowe to Cambridge had many opportunities which had only begun to be recognised in the last couple of years.
“The demand for warehousing at the moment is seemingly insatiable.” he said. With Amazon taking an estimated 25% chunk of space available in the last couple of years that was unsurprising, he added. Brexit meant that foreign companies were now looking for a toehold or foothold in the UK.
Over the last three years, Jaynic will have brought around 1.4m sq ft of space into being at Suffolk Park, he added. “We have literally just put in two more applications for new buildings on that site,” he said. Combined, they would measure another 235,000sq ft.
He was “very confident” of the market for the foreseeable future, he said. His EpiCentre laboratory and office hub in Haverhill now had 14 or 15 occupants despite the Covid setbacks, bringing it to about quarter full. He hopes by next year it will be 80-90% occupied.
He sees many opportunities at Gateway 14 in Stowmarket – which Jaynic is also involved in. “We are talking to several modular housebuilders looking to set up in Suffolk,” he said.
Vanessa Penn of Ipswich-based commercial estate agents Penn Commercial, was also optimistic about the state of the market. “We’ve had a few successes,” she said.
The company helped Ipswich Borough Council to secure The Botanist in The Old Post Office in Ipswich’s historic town centre, and found properties for Hank’s Vegan Deli and the Eggfree Cake Box. The Maltings office complex on Princes Street (see page 3) was another success story.
The firm is currently marketing a 10,000 to 25,000sq ft open plan basement space next to Poundland in Carr Street for possible use as leisure, retail or other facility.
“We have got a lot going for us in this area – the port is a big factor,” she said. “There’s good potential.”