Birmingham property consultant Mike Eagleton is cautiously optimistic of trends set to benefit the distribution property sector. Truck registrations in May could possibly add a touch of optimism in the distribution property sector as the Society of Motor Manufacturers and Traders (SMMT) announce a 23 per cent increase.
In the first five months of the year almost 25,000 trucks have been registered showing an increase of 36.2 per cent in the same period last year. Registrations for the rolling year measure up at 25.1per cent indicating a bounce back that could have spin off in the letting of warehouse and distribution space.
Mike Eagleton of Birmingham property agents Eagleton & Company remains cautious but views the latest HGV registrations together with some optimistic news from one of the country’s premier logistics firms as evidence of resilience in an otherwise gloomy distribution property market.
Haulage giant Eddie Stobart probably uniquely best known for its huge fan club based on the popular, well turned out red and green livered HGV’s that command attention on motorways and trunk roads has hardly excited financial pundits in the City. That was until May this year when managing director Andrew Tinkler announced a 27 per cent increase in turnover and a profit of £3.5 million against a loss of £1.12 million in the previous year. The results covering 14 months trading included a period before the credit crunch began to bite and Tinckler talked up the sector saying the company was seeing no signs of an economic slowdown.
Stobart operates more than 1,500 trucks and claims to accomplish an 82 per cent annual fleet utilisation following a far reaching study to reduce empty vehicle miles.
The firm’s highly visible livery now extends to rail freight with new daily intermodal services coming on stream from Grangemouth to Inverness conveying containerised goods to Tesco stores and supermarkets in the Inverness area. Known locally as the “Tesco Express” the five year deal was supported by Scottish Government grant aid totalling over £3 million in addition to almost £500,000 from the Rail Environmental Benefit Procurement Scheme (REPS), an initiative applauded by Mike Eagleton.
With sole agent responsibility for marketing the 400 acre (161ha) rail served Birch Coppice Business Park alongside junction 10 of the M42 motorway at Tamworth, Eagleton praises REPS for its environmental benefits in reducing the need for long haul road transport – one container train replaces 50 HGV’s on Britain’s roads – and for the inertia it brings in establishing a network of regional intermodal rail freight terminals.
Acting on behalf of Warwick based IM Properties, Eagleton & Company negotiated the deal to locate the £12million development of Birmingham Intermodal Freight Terminal (BIFT) to Birch Coppice which has increased rail traffic to 6 train movements per day since the facility opened in 2006.
Eligible traffic for funding from REPS is specific to containerised goods for example deep sea containers from port to customers at an inland rail head which is the norm at Birch Coppice Business Park or a service conveying supermarket products in containers between two distribution hubs as in the Grangemouth to Inverness shuttle of Eddie Stobart.
If the current dark aspect of the commercial property market can be likened to the dark of the rail tunnel, Mike Eagleton points to a number of high street retailers such as Matalan and Aldi which within the last month have announced ambitious expansion plans that may emphasise the light at the tunnel end. As recent as July 1st discount fashion and house wares retailer Matalan issued news of a £19 million twelve month refurbishment programme across its 202 store network on the back of pre tax profits for the year ending March of £53.2 million. Atherstone discount grocery chain Aldi are set to invest £1.5 billion on UK expansion over five years with a promise to open a new store every week.
The recognition of environmental benefits of container freight versus long haul road transport through the introduction of grant aid is a pointer for the development of strategic rail served intermodal logistics sites.
Comments are closed.