Realest report on the growth of their Agency Team, South Coast industrial and logistics market news and an exciting new development addressing the critical need for high quality industrial and logistics space and providing a rare opportunity in the vicinity of the Port of Southampton, the UK’s most productive container port.

Starting Spring with a flourish, we are delighted to welcome Lauren Udall as Director of Business Space to our growing Agency team. Lauren has joined Realest from Keygrove Chartered Surveyors where she was head of the Agency team and previously worked for DTZ in London. She will be working alongside Adrian Whitfield and Steven Williams on cross sector property including industrial and logistics, office space and development land. We are thrilled to have her on board!

In industrial and logistics market news, despite what feels like relentless ‘doom and gloom’ in the mainstream media, the devil is in the detail as they say and whilst transactions continue to take longer to complete, 2024 saw a positive end to the year.

Realest experienced a flurry of lettings at C4 Deacon Trading Estate, Eastleigh (7,345 sq ft), 5 Lower William Street, Southampton (11,412 sq ft) and 3 Ampress Park, Lymington (4,113 sq ft). As a firm, we put 17 properties under offer in Q4 2024, the busiest quarter of the year. This compares to 9 properties in Q4 2023 and 8 properties in Q4 2022. Therefore, signs of encouragement.

Take up figures can be misconstrued in the industrial and logistics market space. Whilst on the M27 corridor sq ft take up overall was down in 2024, this was primarily due to a lack of larger ‘shed’ transactions in the 50,000 – 150,000 sq ft size range, rather than a lack of occupier demand. Our figures underline this, we transacted 52 deals in 2024 compared to 57 deals in 2023, so only marginally down and not unduly a concern with increased transaction volume in Q4.

With a number of refurbished and newly built properties now available, and occupier demand increasing from defence manufacturing as well as retailers, we expect positive activity in 2025 with increased take up.

However, there is some recognition that rental growth now appears to be slowing in the industrial and logistics sector from previous highs. Although despite this, the average rent has still grown 10% in the past 12 months and expectations far exceed those for other sectors, so still cause for positivity!

In Q1 2025 to date, Realest has transacted over 300,000 sq ft industrial and logistics space. We recorded the largest letting on the south coast this year at Hedge End 113, Southampton with 113,976 sq ft let to A.G. Parfett & Sons. Adrian Whitfield acted on behalf of Urban Logistics REIT jointly with Lambert Smith Hampton and M1 Agency. The tenant was represented by Newsteer.

Acting on behalf of the landlord, LondonMetric Property PLC, jointly with Lambert Smith Hampton, Adrian Whitfield let 32,755 sq ft to Aalco Metals Limited at Airways Distribution Park, Eastleigh. The tenant was represented by Dunard Ltd.

All Realest business lines worked together on the pre-let acquisition and project management of our client, IMI Thompson Valves’ major new 105,000 sq ft facility in Poole. Planning is approved with developer, Kingsbridge aiming to commence construction of the new build this quarter. The scheme will be highly sustainable, targeting BREEAM ‘Outstanding’ and EPC A Rating. Our agency department searched, inspected existing buildings and reported on site availability where potential Design & Builds were possible. Having reviewed all options, we then negotiated, advised and agreed the new lease terms with CBRE who acted for Kingsbridge on this prime development site. Our lease advisory department acted for the client in the short-term renewal of their existing leases. Our building consultancy team have been providing consultancy advice and will be working with IMI in the Development Monitoring and Fit Out of the new build as an ongoing project.

We can only hope for the remainder of 2025 that last October’s budget and forthcoming cost increases for businesses does not impact occupier confidence going forward.

For industrial investment, there was some return to a positive sentiment in Q4 and this along with lower debt costs and pricing correction is showing signs of an improvement in trading. This should lead to a rise in industrial investment volumes and activity in 2025, particularly from investors focused on ‘prime’ assets.

In Q1 2025, Steven Williams acquired a 36,329 sq ft detached warehouse on Moorside Road, Winchester on a 2.21 acre site as a freehold investment purchase for our retained client. Lambert Smith Hampton acted for the Vendor.

We certainly view 2025 with optimism and are looking to significant activity on key client projects for Realest including the new trade counter development at Adanac Trade Park, Southampton, the full refurbishment of ALPHA, Waterlooville which is due to complete in May 2025 and Quest 271, Southampton.

Quest 271 is a brand new £35m three unit speculative industrial/logistics development which achieved practical completion and a formal launch in October 2024. The finished scheme encompasses a total area of 158,374 sq ft across three units, with availability ranging from 44,400 sq ft to 62,729 sq ft. Notably, Units 1 and 2 can be combined to create 95,645 sq ft if required, retaining a degree of flexibility to secure a single tenant.

It is the first new build scheme in this location since the delivery of South Central in 2018. Quest 271 addresses the critical need for high quality industrial and logistics space on the South Coast, which has been in extremely short supply.

In addition, it is situated in a highly accessible location, providing direct access to both Port of Southampton (the UK’s most productive container port and Europe’s leading cruise port) and the M27 (Junction 3) with onward connectivity to the West Country, M25/London, The Midlands and The North.

The scheme was constructed on the former Newsquest site at Test Lane, Nursling, Southampton which comprised their former printworks, office building and associated service buildings.

Proposals were brought forward for the demolition of the existing buildings and regeneration of the whole site to redevelop and deliver new employment opportunities comprising three general industrial (Use Class B2), storage and distribution (Use Class B8) units.

Sustainability was key in delivering Quest 271 with the provision of an energy strategy, including zero or low carbon energy technologies that would achieve a reduction in CO2 emissions of at least 12.5% above building regulation requirements. The majority of the woodland buffer has been preserved, including the retention and enhancement of the existing mature boundaries to the east, west and south of the site. A further 1,200+ trees have been planted.

In addition, intelligent use of sustainable urban drainage systems is in place, to manage surface water drainage, including swales along the embankments to alleviate flooding.

The highest performance green credentials and cutting edge specification are included as standard. Quest 271 boasts impressive sustainability features, developed with a fabric-first approach that meets BREEAM “Excellent” standards and achieves an EPC A rating. The site includes photovoltaic panels on all units, electric vehicle (EV) chargers, secure cycle storage spaces and is green energy tariff ready. Each unit comes with a secure yard, 12m eaves height, level access and dock loading doors, 50 kN/m² floor loading, 15% roof lights, Grade A offices and 24/7 secure gated access.

The site is located within a key industrial and employment corridor. The local vicinity boasts 48,000 manufacturing workers and 24,000 transport and storage workers in sectors with suitable skills. As a minimum, Quest 271 will deliver 224 new jobs.

We are delighted to have achieved what we consider to be the optimum scheme possible. Growth in demand has resulted in occupiers’ strong preference for units providing immediate accessibility, fully self-contained site and large secure yard, providing a good level of loading and parking plus office content within the recommended 5%-10% for buildings of this type. In addition, the scheme was able to secure a substantial power supply (up to 600 kVA).

However, we are most proud that in addition to all of the above, we have been able to deliver a scheme which will genuinely reduce tenants’ occupancy costs whilst offsetting their carbon footprint. Quest 271 is a stand-out development which meets the highest environmental standards whilst delivering best-in-class industrial/logistics space on the South Coast with a rare opportunity to be based in a building of this standard so close to the Port and the motorway.

Royal London have funded the scheme, developed by Salmon Property. The appointed construction contractors were MCS Group. Royal London and Salmon Property were advised throughout by Realest and Lambert Smith Hampton from initial market commentary and scheme design advice in planning discussions with Southampton City Council through to being appointed joint marketing agents alongside DTRE.

A video tour of Quest 271 is available here.

You can see all of the commercial property listed by Realest on NovaLoca here.

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