Industrial developer IDI Gazeley will speculatively embark on the UK’s biggest shed construction since the 2008 financial crash.
The group will develop a 574,000 sq ft warehouse at its Magna Park scheme in Milton Keynes, bringing much-needed big-box stock to the supply-starved market.
The scheme dwarfs Graftongate’s and Exeter Property Group’s 372,000 sq ft distribution facility at Kingswood Business Park, in Cannock, which will complete in June, to become the largest spec development of this cycle.
The announcement marks the next phase of construction at the hugely successful Magna Park scheme, which is home to retailers John Lewis, Waitrose and River Island and has seen IDI Gazeley sell off assets to achieve some of the lowest yields in the sector.
“This asset will undoubtedly attract strong interest from potential occupiers because of its great location and supply of labour,” said Alex Verbeek, senior vice-president and managing director UK at IDI Gazeley.
IDI Gazeley bought the warehouse’s 55-acre plot from Gallagher Estates last year. The site has planning permission for up to 1.4m sq ft of distribution and logistics facilities.
Construction is due to start in May and complete by the end of the year.
The new building, named Altitude, will be 21 metres high on completion and will be designed with a strong focus on sustainability.
“Energy efficiency is fundamental to our design process and this development goes far beyond what is required from building regulations in terms of sustainability,” said Verbeek.
The scale of speculative development in the UK has been somewhat muted since the financial crash, after which many developers were left with unoccupied mega-sheds for several years.
While 2016 was a record year for take-up, standing at 34.6m sq ft, supply lagged behind, at just 26.4m sq ft, according to Savills.
Including Altitude, around 4.4m sq ft of speculative development will be delivered in the UK this year - considerably down on last year, when 8.6m sq ft came to the market.
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