Property
Shortage of warehouse space fuels opportunities for farmers • • •
Good road access highly desirable Online shopping driving demand Opportunities for smaller farmers
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astern region farmers are well positioned to take advantage of a rise in demand for warehouse space, say land agents. The growth of online shopping sparked by the pandemic and more frequent parcel deliveries are fuelling the need for storage in more rural and semi-rural locations, say rural advisors Savills. There has been an increase in the number of logistics companies looking for buildings to store goods as they roll off container ships at the Port of Felixstowe – making locations off the A14, A12, A140 and A11 highly desirable. Savills Suffolk head of rural management Michael Horton said: “Traditionally the logistics sector has been long haul. Goods come off the container ships at the Port of Felixstowe and then get taken to the Midlands.
Next day delivery “However with the coronavirus pandemic increasing people’s willingness to shop online – and with many goods now expected to be delivered the next day – that picture has changed.”
The past 18 months had seen increasing demand for sites that are much closer to home along key arterial routes, Mr Horton told a recent seminar attended by local farmers and landowners. With some 46% of UK container traffic coming through Felixstowe, there were new opportunities for farmers, he said. This included developing old agricultural buildings that were currently sitting empty. “Typically we are seeing returns of up to £8 a square foot, whereas a few years ago it was perhaps more like £4 or £5 a square foot. People are unlikely to change their shopping habits anytime soon, so we don’t anticipate that this demand will fall away.”
Almost half of all f UK container traffic comes through Felixstowe
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Companies are looking for buildings to store goods.
Edward Fitzalan- Howard (pictured), from the rural management team at Savills Norfolk, said even farmers with a smaller space may have opportunities – not just landowners with larger scale commercial warehouse storage. “Local businesses often need somewhere to store archive materials for example, or disused agricultural buildings could be converted into self-storage facilities,” said Mr Fitzalan-Howard. “The change in people’s working patterns as a result of the pandemic has also opened up a really interesting opportunity around diversifying and creating small scale business parks and flexible office space suitable for hot desking.” Mr Fitzalan-Howard said this would cater for employees and business people who only commuted to the office once or twice a week but didn’t necessarily have space to work from home for the rest of the time.
Land prices hit highest level since 2018
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verage prices for arable farmland in England reached £9,700 per acre in the third quarter of 2021 – the highest quarterly average since early 2018. This rise reflects historically low levels of supply in the marketplace, combined with firm demand from a range of buyers, according to land agents Strutt & Parker. It shows that fewer than 10,000 acres came to the market in Q3 2021. This represents about half the amount of
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land typically offered for sale. It takes the total amount of land coming on to the market to 48,100 acres so far in 2021 – compared to 48,200 acres at the same point in 2020. The reduction in area can be partly attributed to the private market being active, says Strutt & Parker. It estimates that private sales currently account for about 25% of the market nationally, and up to 40% in some regions. In some areas, there are virtually no
farms left unsold because demand continues to outstrip supply. Such is the strength of demand that every farm over 500 acres marketed in the first half of 2021 has already sold or is under offer. The average value of arable land for the whole of 2021 nationally is £9,200 per acre, which has been the average since 2017. Prices for vacant arable land in East Anglia during the third quarter of 2021 ranged from £7,500 to £10,250 per acre.
