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Trinity of the North

Peel Group, Peel Ports and Harworth Estates are combining forces to tackle the northern logistics market. Photograph by Ant Clausen

A visit to Peel Group’s offices at the Intu Trafford Centre near Manchester helps to engender an understanding of the scale of the company’s landholdings and influence in the north-west. Virtually everything within sight is at least partially in Peel Group’s ownership — from the centre itself and the adjacent fields, on which the company is rumoured to be planning a 1m sq ft office scheme — up to and including the Manchester Ship Canal, the great man-made waterway built to link the docks of Liverpool with Manchester’s mills.

Over a 40-year period, founder John Whittaker has amassed Peel Group’s landbank chiefly through clever corporate acquisitions. Now, a great swathe of that acreage is being combined with Harworth Estates’ considerable landholdings and put into the control of a new division that will seek to market it to distribution occupiers.

PLP, which is set for launch at MIPIM next month, is a “strategic alliance” between Peel Group, Peel Ports (which is 51% owned by Peel) and Harworth Estates, the former property division of UK Coal, which controls former colliery sites across the north and Midlands and in which Peel is a shareholder.

It aims to bring together all the logistics development sites under the control of the three organisations, providing them with a common marketing platform as occupiers rediscover their appetite for pre-lets, plus the ability to provide them with more comprehensive solutions than each organisation could manage individually.

Around half of the 66 sites, which total 5,674 acres, that have been placed within the venture are being marketed for the first time through PLP.

The division will be led by Peel’s Matthew Fitton, with a management team including fellow Peel men James Whittaker and Ed Burrows, as well as Warren Marshall and Andrew Martin from Peel Ports and Harworth Estates executive director Phil Wilson.

Fitton claims that PLP comprises the largest logistics-based land offer under single control in the UK. He says: “PLP will act as a marketing umbrella across the portfolio. It will also allow us to deliver across the UK and be a one-stop shop for occupiers.”

Wilson adds: “In the past we have had a number of joint ventures with Peel utilising some of our landholdings. They have a similar attitude to us in terms of promoting sites and getting planning consent. We have worked well together so this is a good way of creating a wider marketing strategy for our offer.

“We will remain separate businesses. It will be branded PLP, but we will still be marketing sites as Harworth Estates.”

In some cases PLP will be happy to sell land to occupiers. In others it will act as developer for prelet buildings on its sites, bringing it into direct competition with big shed developers like ProLogis and Gazeley. It may even carry out some speculative development, although not with Peel’s own money.

Fitton quotes Cushman & Wakefield figures that show only 19m sq ft of sheds of more than 100,000 sq ft available across the north of England — around two years’ supply. “We are looking at speculative building with external funding. There seems to be an appetite among funders to sit down and have a conversation,” he claims.

Peel Ports is building a new container terminal at the port of Liverpool, known as Liverpool 2. It hopes to persuade more shipping lines to unload goods destined for the north in the north rather than transporting them by road from the south coast ports. Wilson stresses that PLP can offer occupiers sites linked to several different transport modes: “There is a wide range of modal uses — port centric and the ship canal and a lot of former colliery sites had rail connections as well as road connections,” he says.

PLP is likely to add further sites to its existing portfolio. Fitton says that PLP is looking to buy two big sheds sites in the north-west capable of development for 1.5m sq ft of warehousing.

The additional land will be marketed through the new venture.

At present, PLP’s only land in the south-east comprises three acres at the Chatham Waters mixed-use scheme on the bank of the river Medway. Will Peel and Harworth stray outside of their heartlands by acquiring sites in the south?

“We understand our market is predominantly the north-west and Yorkshire,” responds Fitton. “There would have to be a compelling reason why we would acquire land in the south-east. We have enough to be getting on with,” he adds.

PLP’s land bank

Sites 66

Development potential 60m sq ft (10 sites can accommodate buildings up to 1m sq ft)

Potential built investment value £4bn

Regional distribution:

  • North-west 2,380 acres (42%)
  • Yorkshire 1,050 acres (18%)
  • Midlands 933 acres (17%)
  • Scotland 756 acres (12%)
  • North-east 552 acres (10%)
  • South-east 3 acres (1%)

Total area 5,674 acres

Planning status 25% of the land is green belt. The remainder has outline or full planning consent or employment allocation.

Servicing Infrastructure completed so that 1,900 acres is ready to occupy.

Ownership 50% Peel Group, 25% Peel Ports, 25% Harworth Estates

Covering all bases

Salford’s port will be served by road, rail and barge and will support importers at the Port of Liverpool

Port Salford

Located on the north bank of the Manchester Ship Canal, Peel describes Port Salford as a “tri-modal” site — that is served by road (the M60 motorway), rail (the Liverpool-Manchester line) and barge (from the Port of Liverpool). The 150 acre first phase has planning consent for 1.5m sq ft of warehousing.

Peel has recently begun to promote an adjacent 210 acres of green belt land through the local planning process. Road infrastructure work costing £35m is already under way, and Peel is in the process of identifying contractors for rail-related and canal-side works. “We have four existing Peel Ports customers who import through the Port of Liverpool looking at facilities on the Port Salford site,” claims development manager Ed Burrows. Peel is looking to achieve rents of around £5/sq ft.

Logistics North

Planning permission was granted in December for Harworth’s Logistics North site near Bolton. Around 250 acres could be developed providing 4m sq ft of sheds in units up to 1m sq ft. A plot of land has already been sold to Aldi for a 400,000 sq ft regional distribution centre.

“The strategy was to carry out a limited number of land sales to pay for the infrastructure so that we can start to look at design and build deals and take a developer’s profit,” says Wilson. Infrastructure works are scheduled to start in May.

Doncaster Robin Hood Airport

Peel’s airports division opened the airport at Doncaster in 2005. The company owns 200 acres of land adjacent to the airport which was previously earmarked as an office park. The Finningley and Rossington Regeneration Route Scheme (FARRRS) link road, construction of which began in October, will open up the site for sheds use.

Peel plans around 1.5m sq ft of warehousing in units of up to 250,000 sq ft. Keeping the unit size down will avoid coming into direct competition with Verdion’s nearby 6m sq ft Inland Port Doncaster scheme. “We are in the process of acquiring a large adjacent site with the potential for 2m-4m sq ft of logistics space,” adds Fitton.

Original source: Property week 21st February 2014