Industrial Evolution

The recession has spawned a new generation of industrial property start-ups

With gloom and inertia still hanging over the UK industrial market, it is easy to forget that 2009 was also the year of the entrepreneur. Until six months ago, no one had heard of Roxhill Developments, First Industrial Developments, M7 Real Estate, Cedarwood Asset Management, Centurion Industrial Asset Management, Altyon Investments — or indeed Dowley Turner Real Estate.

Established developers, property companies and agencies have watched as the next generation of competitors emerges from within their own ranks — long-nurtured talent and the grey hairs of experience their main currency.

As Property Week illustrates (right), these firms have been born from the same, small, pool of shed heads. In fact, this pedigree can be traced back to one company, Kingspark, which was set up by John Cutts in 1993.

After it was taken over by Prologis — formerly Security Capital Industrial Trust — in 1998, names such as Alan Curtis, David Keir, Ken Hall, Steve Ferris and Richard Saint have since gone on to spawn the start-ups of each successive downturn. Now, from this pool, some new competitors have joined them.

Developers: First among equals

The first new industrial shed developer to emerge from this property cycle was First Industrial — a company, like so many before it, that has emerged out of US developer Prologis.

It was set up by former Prologis development director Matthew Byrom and global managing director Ken Hall in November. As revealed by Property Week (20.11.09), the pair led an 11-strong team with the backing of entrepreneur Terry Lister and private equity investors to develop design-and-build sheds in the Midlands, where it plans to carry out only carbon-neutral development.

This week former Prologis head of project delivery Fergie Taylor and development associate Oliver Bertram have started work at First Industrial’s Solihull office. The company has already formed its first joint venture with Clowes Developments on the 111 acre, rail-linked East Midlands Distribution Centre site that Clowes bought from Wilson Bowden Developments in December 2008. It is understood to be the frontrunner, ahead of established developer Prologis at DIRFT II near Daventry and Gazeley at Crick to land the largest prelet in the country — a 900,000 sq ft facility for Marks & Spencer — on the site.

First Industrial would not comment on the deal or any of the other joint ventures it has planned. However, Byrom hopes the company will be differentiated by its approach in which it considers itself a “service provider”, rather than a client.

“After 10 years we wanted to work in a more niche business,” he says. “As a team we have become known for a particular style of business. And we have found ourselves in a market we understand.

“For most investors, speculative development will be as appealing as considering a tequila slammer for breakfast after a big night out.”

Taylor adds: “2010/11 will be best characterised by competitive, low-margin build-to-suit development. However, this is an area in which we feel best able to compete.”

© Property Week - Nick Duxbury 26.02.10

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