Industrial Market Review

Milton Keynes Industrial and Logistics Review 2014

Milton Keynes delivered another solid year with take-up of 2.5 million sq ft leading to rental growth of up to 8% in certain sectors. Availability has fallen to its lowest level since 2007 with good quality employment land now crucial to satisfy demand.

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In this issue:

A strong final quarter

  • Take-up in 2014 totalled 2.5 million sq ft, a marginal 3% increase on 2013 figures. This included a 934,000 sq ft pre-let to Waitrose at Magna Park as supply constraints along the M1 corridor fuelled the design and build market.
  • Consistent with other markets along the M1 corridor, Q4 was strong with take-up of 255,000 sq ft.
  • A shortage in supply of mid box units (50,000 sq ft to 100,000 sq ft) meant that activity was dominated by the smaller multi unit sector (under 30,000 sq ft) with 63 transactions accounting for 85% of take-up by number.

Key transactions


Size (sq ft)

Occupier Tenure Rent/Price
Waitrose, Magna Park




£5.75 per sq ft 

High Standing, Brinklow


Seko Logistics Leasehold £5.85 per sq ft
Centro, Wymbush


Brioche Pasquier Freehold Not available
Blakelands House, Tongwell


Coca Cola Leasehold £5.50 per sq ft

Rental growth at the smaller end of the market

  • Strong activity at the smaller end of the market drove rental growth by 8% in 2014 and lead to a hardening of incentives.
  • Freehold activity at 453,000 sq ft accounted for only 18% of take-up despite increased demand, particularly for smaller product. With high institutional ownership in Milton Keynes, freehold opportunities are limited which has lead to a spike in freehold values.

Lowest availability since 2007

  • At the end of 2014, availability stood at 2 million sq ft, the lowest level since 2007, of which 369,000 sq ft was reported under offer. This reduced true availability to only 1.62 million sq ft, equivalent to a little over nine months supply.
  • There is a shortage of good quality mid range units, of the 369,000 sq ft under offer at the end of 2014, 23 of the 24 transactions are below 40,000 sq ft and 10 of those below 10,000 sq ft.
  • Most size ranges are under supplied, particularly with modern or good quality refurbished stock, with the exception of units circa 5,000 sq ft where a reasonable supply still remains.

Key availability (in excess of 50,000 sq ft)


Size (sq ft) Tenure Rent/Price
DC1 MK Clarke Road, Mount Farm 209,951


£5.25 per sq ft

Arvato MK180, Chippenham Drive, Kingston 181,566 Leasehold £6.25 per sq ft
73 Mercers Drive, Bradville 89,537 Freehold/leasehold £5.25 per sq ft
Michigan Drive, Tongwell 65,433 Leasehold £5.75 per sq ft
1-3 Ward Road, Bletchley 58,433 Freehold/leasehold £40.00 per sq ft
1 Vincent Avenue, Crownhill 54,350 Freehold/leasehold £5.50 per sq ft 

High level of enquiries

  • 2015 has started with strong enquiry levels, with many occupiers having to widen their search area to identify suitable opportunities.
  • Limited stock availability in Luton and Dunstable is driving enquiries up the M1 but with a lack of good quality stock and limited development opportunities, Milton Keynes may be unable to capitalise on this opportunity.

A lack of development land

  • Despite Milton Keynes being identified as the fastest growing city in the UK the development pipeline appears poorly prepared to capitalise on resurgent demand, particularly for units within the mid range sector or smaller.
  • There is some activity in the pipeline with IDI Gazeley shortly expected to announce a speculative build of 185,000 sq ft at Magna Park. Gallagher Developments are advanced with infrastructure works to open up a 55 acre employment site at Eagle Farm, which benefits from outline planning consent for up to 1.25 million sq ft in unit sizes from 200,000 sq ft.
  • At Phase 2, Prologis Park, Marston Gate, Prologis have submitted a detailed planning application for a two unit scheme totalling 426,000 sq ft.
  • Quality development sites for units of 100,000 sq ft and lower are limited, with the majority of sites controlled by the Milton Keynes Development Partnership (MKDP). Those sites require a 50% pre-let commitment to kick start development with MKDP preferring a ground lease at an annual rent rather than a freehold transaction.

Investment transactions


Size (sq ft)

Price Net initial yield Purchaser
Crownhill Business Centre

108,159 (13 units)




Waitrose, Magna Park


£114m 4.64% Legal & General
Granby Industrial Estate  

146,401 (24 units)

£9.13m 7.10% Threadneedle Investments
Unit 37-53 Potters Lane

86,390 (17 units)

£3.495m 8.13% Petchy Group Holdings
Stacey Bushes Industrial Estate 213,536 (32 units)  £9.2m  7.76%  Schroders 
Blakelands Industrial Estate 564,330 (74 units)  £28.2m  8%  Sedco Capital 
Units 1-28 Heathfield Industrial Estate, Stacey Bushes 104,200 (28 units)  £5.006m  7.70% Schroders 
Massmould Bradbourne Drive 52,532  £3.8m  6.96% Custodian REIT 

Record year for industrial investment

Industrial enjoyed a stellar year, with investors attracted to positive fundamentals of acute grade A supply shortages and rising demand through the growth of ecommerce. Industrial transaction yields have moved in sharply over the course of 12 months with much of the activity in Milton Keynes concentrated in the second half of the year.

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