One acre site sold
Final plot let at Easter Inch business park
JLL, on behalf of Scottish Enterprise, has sold the final plot at an industrial business park at Easter Inch, Bathgate to CM Steel Buildings, a firm specialising in industrial and commercial building projects.
JA Pollock acted for CM Steel which will use 1.1 acre unit as the firm’s headquarters.
CM Steel has recently completed the design and build of a 3,500 sq m warehouse extension in Broxburn for Capital Cooling and a 2,000 sq m factory/office development in Aberdeen for Peter Vardy Estates.
The deal follows the sale last year of three units to civil engineering company Front Line Construction which operates across Scotland, specialising in the construction of road, sewers and water systems for clients including local authorities and national house builders.
The combined 4.17 acre premises it has taken will serve as its new base from which to expand the business.
Other businesses at Easter inch include
Other owners at the site include Evans Easyspace, Warrington Property Maintenance, Lothian Vehicle Bodybuilders, Rowan Timber and Hydraulic Hammer Hire.
>> The latest moves come amid fresh warnings of the impact of government plans to remove rates relief on empty property.
Around 1 million sq ft of industrial stock across Scotland could be demolished as a result of the new vacancy relief rates proposed by the Scottish Government, according to property consultants JLL.
Proposals to reform levels of empty property relief on vacant industrial property from 1 April were introduced during the Scottish Government’s draft budget in December.
Under the new rules, empty industrial properties will have a three month period of tax relief, after which the level of relief will be 10%. This is compares to 100% rates relief at present. For empty office space, 50% relief is proposed for the first 3 months, after which the level of relief is proposed as 10%.
JLL believes that the proposed reforms will result in damaging consequences for landlords, developers and occupiers.
1) With the supply of industrial stock at a real low, and with industrial private developers only just returning to the market after a long absence, the new reforms are likely to put an immediate halt on all speculative development on industrial stock.
2) Existing warehouse stock will also suffer, with landlords potentially opting to demolish their units rather than spend money on refurbishment due to higher holding costs.
3) Portfolio valuations will be negatively impacted with big losers being secondary assets which are either vacant or with short income and a high vacancy risk. JLL expects a drop in value of between 7 -12 per cent.
4) Manufacturing and production occupiers, particularly those in Scotland’s oil in gas sector, are likely to be hit hard. Typically these businesses require large building and yard spaces and the flexibility of additional space due to the short term nature of contracts. Under the new regime, the cost of under-utilised space will create a huge cost burden on company resources at time when the oil and gas sector is already facing extremely challenging market conditions.
Andrew McCracken, director of UK industrial & logistics at JLL in Scotland said: “The reforms proposed by the Scottish Government could have very serious and long lasting implications for Scotland’s industrial property market. It is our belief that it will be extremely detrimental to existing investment and will force a number of landlords to reconsider future investment in Scotland, which will have a grave knock-on effect for job creation and future speculative development.
“The proposals will have a negative effect on commercial property development right across Scotland, as well as the economy. The proposals will stifle much needed speculative development, which was only beginning to return from the recession and will discourage the refurbishment of secondary stock. The lack of availability will inevitably drive rental levels upwards and could lead to potential occupiers considering options and alternative locations out with Scotland.
“We would strongly encourage the Scottish Government to reconsider the proposals and to properly engage with the property market to consider the implications of the proposed changes before implementation in April.”
The Scottish Government’s consultation ended on 15 January with replies expected to be published in the coming months, before a considered response is given.