< Previous10 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FINANCE NEWS Leicester digital agency acquires York start-up Digital Ethos, headquartered in Leicester, has acquired York-based start-up View Digital. The move marks the first of potential further acquisitions as the marketing agency implements its aggressive expansion strategy. Discussion with a Manchester digital agency is also currently under negotiation. Two former employees of View Digital continue their roles as marketing specialists and will remain based in York while being an integral part of the wider team through collaborative, remote platforms. A new office in York will also allow for future employees to join the team here as Digital Ethos grows it’s offering in northern regions. Calum Howarth, founder of View Digital, will report directly into Managing Director Luke Tobin while heading up the York office. He brings along with him several clients from his former company that have migrated over to Digital Ethos. Calum Howarth said: “When I first met Luke, we instantly clicked. The direction of both businesses align so it was a great and very natural fit. What works for me is that I can remain in York while having the support of a wider team with plenty of tools and resources that are not readily available when you’re a start up. Utilising these means added value for our clients.” Luke Tobin, Managing Director of Digital Ethos said: “We’re thrilled to have Calum’s expertise on board. To some, this may seem like a strange time to kick off plans for expansion but when an opportunity like this comes along – it’s hard to turn it down. “We have clients up and down the country so having offices dotted around is something I’m keen to proceed with.” Corby concrete specialist secures support to mitigate COVID-19 impact A concrete specialist headquartered in Corby, Northamptonshire, has secured a significant facility from HSBC UK to provide additional support during the COVID-19 pandemic. MPB Structures has been providing construction services across education, retail, and transportation sectors for the last 36 years. With numerous construction projects having been on hold during the pandemic and new projects now entering the planning stages, the funding from HSBC UK will provide additional support to the company’s cash flow during this unprecedented time. As well as its Corby site, the family-run business has offices in London, Manchester and Birmingham employing 700 people. Patrick Boyle, Director at MPB Structures Ltd, said: “We were delighted to receive the support from HSBC UK during what is a very uncertain period. Knowing that we have the additional facility enables us to continue with live projects and to plan for the exciting remainder, enabling us to be in the best possible position to get back to operating ‘business as usual’.” Nick Broome, Relationship Director, South Midlands Corporate Centre, HSBC UK, said: “HSBC UK is committed to supporting its customers during this period of uncertainty, and we were delighted to be able to help the team at MPB Structures with an additional facility, enabling the organisation to continue to operate as it prepares to resume usual operations.” Historic Leicestershire brewery secures £5m CBILS Independent Leicestershire-based family business Everards has secured a £5m Coronavirus Business Interruption Loan Scheme (CBILS) from Lloyds Bank. Everards, which owns over 170 tenanted pubs across the Midlands and brews a range of ales, has faced unprecedented challenges due to the Coronavirus outbreak and temporary closure of pubs across the country. The impact of the lockdown and the uncertainty over the length of pub closures on the firm’s cash flow has been immediate. The business has seen a significant decrease in turnover since last month and has had to furlough more than 70 per cent of its staff. Lloyds Bank has helped Everards to navigate the government support available and arranged a £5m funding package using the CBILS, which provides funding for businesses that are experiencing lost or deferred income as a result of coronavirus. Nigel Allen, Finance Director at Everards, said: “It goes without saying that we’ve been significantly impacted by COVID-19. This loan will allow Everards to help continue to support our 170 individual business owners and enable us to remain on the front foot for re-opening once lockdown is lifted and pubs can re-open. “It’s very difficult to envisage what the new post COVID-19 world will look like for the hospitality and leisure sector and how quickly consumers will return to their local pub. For us, the CBILS loan from Lloyds Bank means that we can continue to support our business, working towards delivery of our long-term strategy.” The loan has also enabled the business to continue with the development of its new state-of-the-art brewery, beer hall and office site at Everards Meadows in Enderby, Leicestershire. The building project, which was originally due to be completed this autumn, has now been delayed until 2021 as a result of the pandemic. Luke Tobin, Managing Director, Digital Ethos 06-15.qxp_Layout 1 05/06/2020 09:06 Page 5FINANCE NEWS Midlands Engine Investment Fund invests over £64m Over £64.8 million has been invested into 257 businesses by the Midlands Engine Investment Fund (MEIF), with new data revealing its regional impact. The £250 million Fund, which was launched by the Government’s British Business Bank in 2017 to support small businesses in the Midlands, has helped create 629 jobs, with 37 per cent paying above the UK upper quartile salary of £36,500 a year. The new data has been released as part of an Early Assessment Report which charts the Midlands Engine Investment Fund’s progress between August 2017 and September 2019. The report was carried out by economic researchers SQW, supported by the Centre for Enterprise and Economic Development Research at Middlesex University, Belmana and BMG Research. The report spotlights the fund’s impact in improving the delivery of equity finance in the Midlands after supporting 20 per cent of all equity deals in the region. The report shows: * 90 per cent of researched investee businesses confirmed that the additional equity funding they raised was either ‘entirely’ or ‘largely’ attributable to the MEIF * 60 per cent of investee businesses report increased turnover * 58 per cent of businesses receiving debt and 30 per cent securing equity identified as exporting products or services. This is in contrast to national export estimates varying from 9 per cent to 20 per cent for all SMEs * 68 per cent of businesses had used investment to increase skills in their workforces * Across debt and equity deals, 37 per cent of businesses stated that that they would either ‘probably not’ or ‘definitely not’ have secured finance without the Fund * 84 per cent of businesses revealed they now have greater confidence in raising private sector finance * 85 per cent of equity deals and 44 per cent of debt funding was used to increase investment in research and development and innovation, leading to new products to be developed, including medicines and medical therapies Communities Secretary and Midlands Engine Champion, Rt Hon Robert Jenrick MP, said: “We recognise that small businesses have faced significant challenges over the last few months as a result of the Coronavirus pandemic and we have ensured financial support is available to businesses across the Midlands who are in need of it. “Our Midlands Engine Investment Fund bolsters and strengthens our great Midlands businesses for the future. As the Midlands Engine Champion in the Cabinet I am delighted that over £64m has now been invested into over 250 businesses. “A thriving Midlands Engine is pivotal to the nation’s economy and this Fund will play its role in levelling up the region.” Midlands avoids deluge of corporate insolvencies in first month of pandemic The number of corporate insolvencies seen across the Midlands during April 2020 saw a marginal increase on the previous year, as government support packages have given companies vital headroom to help deal with the COVID-19 pandemic. According to analysis by KPMG’s Restructuring Practice, a total of 11 companies fell into administration during April 2020 in the Midlands, compared to 7 in April 2019. The year-to-date comparative figures were also flat, with 59 insolvencies in the Midlands in the first four months of 2020, compared with 57 in 2019. Nationally, insolvencies were down by more than a third in April 2020, when compared to 2019, with 61 businesses entering administration. Chris Pole, Restructuring Partner at KPMG in the Midlands, said: “Comfort can be taken from the fact that we are yet to see any significant surge in local companies falling into administration, as breathing space has been provided to date by a supportive lending community and range of helpful measures accessible at short notice. “However, the old adage that ‘more companies fail coming out of a recession than fail going into it’ will be front of mind for many business owners who will be trying to forward plan their exit from lockdown.” Chris Pole continued: “Planning such exit is inherently difficult given the huge number of ‘unknowns’ which remain, such as; how long it will take for customer demand to bounce back, the cost of implementing appropriate social distancing measures and how the Job Retention Scheme will be phased out. “Business owners will need to think about whether their existing business model is viable going forward post-crisis; considering whether cost-saving initiatives need to be implemented or if redundancies are required to flex the cost base of the business to match the anticipated income streams which will likely be based on reduced activity levels. “Whilst many businesses will have taken advantage of the various government support packages available, it must be remembered that this is not ‘free money’ and the loans obtained need to be repaid; such repayments need to be taken into account as part of the post-crisis business model assessment.” Chris Pole, Restructuring Partner at KPMG in the Midlands www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 11 Communities Secretary and Midlands Engine Champion, Rt Hon Robert Jenrick MP 06-15.qxp_Layout 1 05/06/2020 09:06 Page 6Carve-outs to remain a key theme in 2020 M&A deal volumes in the manufacturing sector will be subdued over the coming year amid COVID-related uncertainty, but carve-out deals could remain a significant feature of the market, according the latest report from accounting and business advisory firm BDO. BDO’s Manufacturing Deal Review 2019 reveals that 12 of the top 20 M&A transactions in the manufacturing sector last year were carve-outs as management teams came under pressure to realign and refocus portfolios by spinning off non-core operations. With COVID-19 placing even greater pressure on corporates this year, this trend could remain a key theme in 2020. According to BDO’s analysis, nearly 700 manufacturing deals were completed in 2019 with Engineering Services coming out as the most active sector accounting for 27% of deals, followed by Building Products (14%) and Food & Drink (12%). Around one third of these deals were cross-border transactions. In total, 133 UK businesses were acquired by international groups, with US and Canadian buyers accounting for almost half of inbound investments. Meanwhile, UK investors acquired 120 targets abroad, shoring up interests in Europe and US markets. Buy-outs represented 1 in 5 UK manufacturing deals, many backed by private equity, which had record levels of dry powder to deploy. Private equity retains a strong interest in parts of the manufacturing sector with a particular appetite for companies displaying a technological edge, recurring revenue streams and competitive advantage. Roger Buckley, UK Industrials Mergers & Acquisitions Partner at BDO, says: “Manufacturing was a vibrant sector throughout 2019 with a steady level of M&A activity. However COVID-19 has put many M&A processes on hold and is expected to inflict a distinct blow to the global economy this year. “Manufacturing continues to be a critical part of the UK economy and over the recent months manufacturers have continued to demonstrate their resilience by adapting to the challenges they are facing. Businesses we are speaking to are keen to reengage with M&A activity in due course, once the virus and its effects are behind us. In particular we expect to see corporates review their portfolios with a view to preparing non-core operations for sale.” 12 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk MANUFACTURING NEWS Leicester manufacturer secures COVID-19 support UK casing and packaging manufacturer, Trifibre, has secured support from HSBC UK through facilities including the Coronavirus Business Interruption Loan Scheme (CBILS). Based in Leicester, the company supplies numerous industry sectors including aerospace, medical, oil and gas, engineering, audio visual, as well as the defence sector and emergency services. Trifibre is a specialist in supplying cases as well as storage and handling solutions to the medical sector. Since the start of the pandemic, the company has been manufacturing cases, packaging and foam products for medical equipment including COVID- 19 testing kits as well as PPE for both the NHS and its suppliers. The funding from HSBC UK will be used to support the business’s overheads during this period of uncertainty. Chris Cox, Managing Director at Trifibre, said: “Like so many other businesses, we have had adapt during this period but with the additional support from HSBC UK we feel we are in a position to be able to push forward, safe in the knowledge that we are in the best position possible to resume ‘business as usual’ once the country comes out of lockdown.” Kate Beretta, HSBC UK Relationship Director East Midlands Corporate Banking, added: “HSBC UK is committed to supporting its customers during this period of uncertainty and we were delighted to be able to support Trifibre with the additional facilities as the business looks to embark on new manufacturing projects.” Polythene film manufacturer adapts facilities to provide localised PPE production The Heanor factory of Berry bpi, the manufacturer of polythene film, is adapting its existing manufacturing facilities and investing in new equipment in order to provide localised production and supply of much needed PPE (personal protective equipment) for NHS workers. The facility on the Heanor Gate Trading Estate, along with three other Berry bpi factories in Stroud, Gloucestershire, and Greenock and Dumfries in Scotland, have been equipped and will be manufacturing around 200,000 special fluid-resistant, long-sleeve apron-style gowns and over six million standard disposable aprons every week. Berry bpi is a long-standing supplier to the NHS, currently producing the majority of clinical waste sacks used in UK hospitals. Although it has not made an apron-style gown before, Berry bpi was able to create a design, produce the film, and cut out and fabricate one within two weeks, for an initial sample run of 2,000. These first apron-style gowns were manufactured at the Heanor factory and all were then donated to local hospitals and hospices, where there was an urgent need for immediate supplies. For the standard aprons, Berry bpi has sourced and shipped to the UK specialist machines for their manufacture. These have now been installed at the Greenock factory, where production is due to begin within the next two weeks. Berry bpi has made a substantial investment in the new equipment and technology in order to set up an efficient operation that can produce both styles of aprons, which are manufactured in low-density polyethylene (LDPE), cost competitively. The ultimate aim is to establish a sustainable domestic supply route for these types of healthcare products. “We have deliberately taken a long-term approach,” explained Berry bpi Chief Executive Andrew Green. “We were able to call on our extensive resources and experience, as well as the flexibility and commitment of our workforce, to produce the aprons within an extremely fast turnaround to help make up shortfalls in the current supply chain.” 06-15.qxp_Layout 1 05/06/2020 09:06 Page 7www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 13 MANUFACTURING NEWS Manufacturing output declines at record pace According to the latest CBI monthly Industrial Trends Survey, manufacturing output volumes in the three months to May dropped at the fastest rate on survey record (since July 1975). The survey of 385 manufacturers found that output volumes fell in 15 of 17 sub-sectors, with the headline drop in output primarily driven by the motor vehicles & transport equipment & food, drink & tobacco sub-sectors. Total and export order books deteriorated compared to the previous month, dropping to their lowest since October 1981 and October 1998, respectively. Looking ahead, manufacturers expect output volumes to fall at a slightly slower – but still fast in historical terms – pace in the next three months. Firms also expect output prices in the next three months to fall at the fastest pace since April 2009. Additional questions added to the survey in relation to COVID-19 revealed that 84% of respondents had seen a negative impact on their domestic output, 68% of manufacturers reported a negative impact on their international output, 51% of manufacturers reported a partial shutdown/closure, 59% of manufacturers had temporarily laid off staff, while 9% reported permanent layoffs and 74% of firms had faced cash flow difficulties. Anna Leach, CBI Deputy Chief Economist, said: “These results show that UK manufacturers are still grappling with the impact of the pandemic. Production levels have fallen even more sharply as firms experience collapsing demand and supply chain disruption, leading some to temporarily shut down their factories. The sector is bracing for what will be a challenging period. “By continuing to show flexibility in the economic support being given to firms, the Government can ensure that the manufacturing sector can exit the lockdown with as little permanent damage possible.” Ibstock begins phased restart of production Ibstock, the Leicestershire-based manufacturer of clay bricks and concrete products, has begun a phased restart of production. The company decided to suspend all manufacturing operations in March. During the shutdown period, a significant proportion of employees were furloughed. Ibstock has now developed new working practices and protocols, including social distancing and enhanced hygiene measures, which reflect the latest guidance from the Government, public health authorities and industry bodies. Ibstock said in a statement: “We welcome recent guidance from the Government that has allowed the housebuilding and construction sector to return to work over recent weeks. “Activity levels in the industry have started to increase, and we have started to bring some of our manufacturing colleagues back into the business as we commence a phased restart of production. “Initially, the Group will recommence operations at approximately one third of its manufacturing sites, where we see demand for specific products and have lower levels of inventory.” Rolls Royce confirms 9,000 jobs will be cut Rolls-Royce has confirmed that at least 9,000 jobs will be cut from its 52,000 strong workforce. The firm is proposing a major reorganisation of its business to adapt to the new reduced level of demand it is seeing from customers as a result of COVID-19. The company noted that while it has taken action to strengthen the financial resilience of the business and reduce cash expenditure in 2020, it is clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago. In addition to the savings generated from the headcount reduction, Rolls-Royce will also cut expenditure across plant and property, capital and other indirect cost areas. The proposed reorganisation is expected to generate annualised savings of more than £1.3bn, of which the firm expects headcount to contribute around £700m. The cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022. The proposed reorganisation will predominantly affect Rolls- Royce’s Civil Aerospace business, where a detailed review will be carried out of its facility footprint. It will also have implications for central support functions. Warren East, Rolls-Royce, CEO said: “This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we. “Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce. But we must take difficult decisions to see our business through these unprecedented times.” © Shutterstock /Jonathan Weiss © Shutterstock /Jenson 06-15.qxp_Layout 1 05/06/2020 09:06 Page 8PROPERTY NEWS Former Nottinghamshire concrete plant sold to developers The former site of a concrete plant near Nottingham is set to have brand new homes built on the land after being sold to developers. Fisher German agreed the sale of the old CEMEX plant off Long Lane, in Attenborough, Long Eaton to developers Cameron Homes, who will build 20 homes on the land. Fisher German were involved in the deal from the start on behalf of CEMEX, a global building material company. The firm secured outline planning permission for the homes to be built on the brownfield site, and its rural team oversaw the management of the site to ensure the land was in good order. After a competitive tender process, the land was sold to Staffordshire-based Cameron Homes after they presented a highly attractive development plan. Matthew Handford, development surveyor at Fisher German who negotiated the deal, said: “We are very pleased to have sold this site on behalf of CEMEX to Cameron Homes. “The site was perfect for residential homes to be constructed on it thanks to our rural team managing the land carefully, so we were very confident we could achieve planning permission for CEMEX. “Once we had secured outline planning permission for the homes to be built, we were impressed with the number of strong tenders submitted. The offer from Cameron Homes was highly competitive, and we advised CEMEX to accept. “Now the land has been sold, we are looking forward to Cameron Homes contributing much-needed housing supply in the area.” Chris Wickham, Land Director for Cameron Homes, said “We are delighted to have secured this land in what will be our first venture in the Nottingham area. “We are now looking ahead to securing detailed planning permission to start work on what we believe will be a real asset to the local community in terms of additional much needed homes and homes that combine quality, tradition and craftsmanship.” JV pre-sells a quarter of Beeston industrial development A joint venture (JV) between industrial developer and asset manager Chancerygate and international real estate firm Hines has pre-sold almost a quarter of its 18 unit, 156,812 sq ft Trent Gateway industrial and warehouse development in Beeston. In addition to selling a 4,877 sq ft unit to Midlands-based Eden Tyres & Servicing, the JV has sold three units totalling 25,099 sq ft to private investors. One of the units, consisting of 13,003 sq ft, will be occupied by gym equipment companies, Indoor Sport Services and Again Faster. Trent Gateway forms part of the former Siemens Communications site and offers freehold and leasehold units ranging from 2,644 sq ft to 36,339 sq ft. Construction is scheduled to complete by the end of May. Chancerygate development director, Mark Garrity, said: “The level of interest in Trent Gateway has been consistently high since even before work started on the site. These pre-sales are testament to the high quality of the accommodation and its excellent location.” Greg Cooper, Hines UK director of industrial and logistics, added: “Our joint venture with Chancerygate goes from strength to strength, with our portfolio of prime industrial space representing around one million square feet. Our leasing success at our developments across the UK demonstrates the growing demand for high quality, well-located industrial and logistics space.” Trent Gateway is located within the wider 48-acre Beeston Business Park, which is a JV between Chancerygate and Bridges Fund Management. FHP and Innes England are joint letting agents for Trent Gateway. FHP advised Chancerygate on all four of the pre-sales and all values relating to the sales are undisclosed. 14 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk LEP invests £3m in 800-home Nottinghamshire development A proposed 800-house development at the Top Wighay Farm site in Nottinghamshire will receive a funding boost from D2N2 Local Enterprise Partnership. The £10.3 million scheme, overseen by Nottinghamshire County Council, will benefit from an investment of £3 million by D2N2 from its Local Growth Fund allocation of £257.5 million. The Local Growth Fund enables D2N2, the Local Enterprise Partnership for Derby, Derbyshire, Nottingham, and Nottinghamshire, to invest in projects that benefit the local area and economy, supporting greater numbers of jobs, homes, and learners. The D2N2 investment into the Top Wighay Farm development will kick-start the project which had stalled due to a funding gap. Other funders for the project include Nottinghamshire County Council and Homes England. The Top Wighay Farm site, a 40-hectare site situated north-west of the Nottinghamshire town of Hucknall, will feature an 805-property housing development, a new primary school, and a local community centre. 06-15.qxp_Layout 1 05/06/2020 09:07 Page 9PROPERTY NEWS Plans submitted for £12m Mansfield redevelopment project Plans to regenerate a part of Mansfield town centre with the £12m redevelopment of the former bus station site are moving closer. Mansfield-based ARBA Group has submitted plans to the District Council for its showcase Stockwell Gateway project. Proposals include a six-storey, nationally-branded, 100-bedroom hotel with breakfast lounge, along with three standalone restaurants, 52 car parking spaces, direct pedestrian access to the existing Walkden Street car park, and revamped pedestrian links to the Four Seasons Shopping Centre. It is hoped that the application will be approved by August, with work on the site commencing in Spring 2021. Calculations show that up to around 140 jobs will be created by the project, and that it is forecast to inject £5m into the local Mansfield economy every year. Richard Burns, Managing Director at ARBA, said: “As a local business, we know how important it is to get this development right as it is a major scheme that has the potential to have a great impact. “A lot of work has already been done to ensure that the site is viable, transformed and really becomes a gateway to be proud of in Mansfield town centre. It has been evident for some time that quality hotel space has been needed in Mansfield, whether that’s for the tourist or the business person. “Therefore, not only will Stockwell Gateway fill a gap and fit within the Local Plan for the area, it will help to regenerate the town centre by bringing jobs and investment.” Estate agent John Sankey, who also chairs the Mansfield Business Improvement District, said: “We are fully behind ARBA’s exciting proposals and we know that they have a successful track record in developing town centre locations into thriving venues. I look forward to working with ARBA and seeing the project come to fruition.” £17m plans for Fenwick revamp get final green light A major redevelopment of Leicester’s historic former Fenwick building has been given its final go-ahead, with the complete £17million investment package now in place. The iconic 19th century four-storey building on the corner of Market Street was bought in 2017 by developer Aimrok Holdings. Its ambitious plans for the building will see it converted into a 121-bedroom aparthotel, including a lobby bar, restaurant and gym. The development will also feature four new ground- floor and basement commercial units totalling nearly 11,000 sq ft, along with almost 12,000 sq ft of flexible business workspace under a newly signed lease with Leicester City Council. Aimrok Holdings will use the building’s original name ‘The Gresham’ for the new development, in a nod to the architectural heritage of this local landmark. The development will be part-funded by the city council and the Leicester and Leicestershire Enterprise Partnership (LLEP), with the majority of the £17million costs coming from a mixture of development finance and private investment. Leicester City Council is investing £450,000 to fund the fit-out and set-up costs for the new flexible workspace with capital set aside for the Leicester Economic Action Plan. Property developer Godwin Developments has announced the joint land, leases and investment sale of a roadside convenience site in Rushden, Northamptonshire to LondonMetric Property, the FTSE 250 listed real estate investment trust (REIT). The deal includes a Euro Garages Limited petrol station and drive-thru coffee operator. The 1.7-acre Rushden site was secured by Godwin Developments in late 2018, and the business then moved to gain planning permission and blue-chip clients in just under 14 months. Upon completion of the build, the roadside convenience development will deliver amenities to nearby Rushden residents, a local industrial estate and traffic along the busy A6. Stuart Pratt, group development director of Godwin Developments, said: “We are delighted to have finalised the sale of this investment to LondonMetric. The deal is a fantastic example of our capabilities to identify and acquire viable sites, obtain planning consent, secure leases to blue-chip tenants and complete sales to long income funds, at pace. “Despite the recent Coronavirus-related challenges we have all faced, a solid effort was made by all parties in this transaction to secure a successful outcome. I would like to thank Franck Steier Price and Shakespeare Martineau for their flexibility and commitment in helping us all get the deal across the line.” The Rushden roadside convenience site is set to create several full-time new job opportunities when fully operational in addition to approximately 50 temporary roles while the project is being constructed. www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 15 Rushden roadside convenience site sold 06-15.qxp_Layout 1 05/06/2020 09:07 Page 1016 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY © Shutterstock /Jonathan W eiss Under Under 16-19.qxp_Layout 1 05/06/2020 09:30 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 17 COMMERCIAL PROPERTY The lockdown measures have come as both a blessing and a curse to the commercial property market. In our previous issue, we explored how valuations were being impacted because conveyancing was essentially put on hold. The housing market has since re-opened and conveyancing can now move forward. However, domestic real estate is still being impacted by the pandemic despite the easing of lockdown this month. But where some corners of the market have been dealt a blow by the pandemic, other areas are flourishing. Warehousing and logistics space has been one area that has experienced an upsurge in demand and activity over the last few months. Of course, this coincides with the unprecedented demand placed on supermarkets and online retailer giants like Amazon throughout the lockdown. In order to cope with this surge, supermarkets were required to draft in hundreds – if not thousands – of extra workers, many of whom were needed solely for logistics and delivery. The same is true for e-tailers, who have needed the extra labour to fulfil and deliver orders. Of course, just because demand has increased doesn’t mean 19 Á This month, we focus on warehousing and self storage – markets which have experienced an upsurge in demand in the wake of the pandemic. lock and key lock and key 16-19.qxp_Layout 1 05/06/2020 09:31 Page 2Armstrong house Offering a prime position in Grimsby, Armstrong House on Armstrong Street is ideally located. Close to the ports of Grimsby and Immingham, motorway links and the town centre, off-street parking is also available for all staff and visitors, meaning it’s convenient too. Our spacious, welcoming offices are located on the ground floor and are both secure and CCTV-monitored, giving you the ultimate peace of mind. At Armstrong House, the flexible in/out terms of contract mean confidence when it comes to affordability and with a range of office sizes there are opportunities for all types of business. If you require virtual office services, prices start from just £15 per month. For more information, or to discuss your office requirements, give Scotts Property a call today on 01472 267000 and ask about Armstrong House. Last remaining office suites Prime location in Grimsby Superb Location - - Close to the ports of Grimsby & Immingham - Great motorway links - Close to the town centre Secure off street parking High speed internet availability Easy in/out terms A range of affordable office sizes 3 3 3 3 3 Armstrong House, Armstrong Street, Grimsby DN31 2QE Tel: (01472) 310301 • Email: s.fisher@blmgroup.co.uk www .shutter stoc k.com/ter ekho v igor www .shutter stoc k.com/Y entafer n 16-19.qxp_Layout 1 05/06/2020 09:31 Page 3www .shutter stoc k.com/Y entafer n that the storage and warehouse space exists to meet that demand. Fortunately, the protracted Brexit process led many retailers – both bricks and mortar and online – to take a more proactive approach to storage. For example, turning to self-storage providers. According to an industry report from Cushman & Wakefield and the Self Storage Association UK (SSA UK) found that demand for self storage space in the UK remained robust in 2019. Moreover, it found that the self storage sector may be more resilient in comparison to other industries in dealing with the fallout of the COVID-19 pandemic, as previous economic downturns have presented opportunities for the sector. This includes demand from smaller retailers expanding their online presence and requiring space for additional stock, increased demand as house sales pick up once the lockdown ends and, more people engaging in home improvement projects and requiring additional storage space. Self-storage businesses have been allowed to remain open during the government-imposed lockdown but restrictions to travel have meant far fewer customers are visiting sites and most operators are reporting that enquiries are down by thirty-fifty per cent. The findings also revealed that although occupancy levels for the industry dipped marginally for the first time in eight years by one per cent to 76.2 per cent in 2019, this was largely due to significant growth in supply as many new stores are not at full occupancy yet. Annual turnover for the industry increased to £766 million in 2019. “While the COVID-19 situation will create challenges for the industry, self storage is well placed to adapt to the changing conditions. Most stores remained open during lockdown with customers continuing to pay their storage rental fees. Past economic downturns have shown that while the mix of customers may change, demand for self storage is maintained,” said SSA UK Chief Executive, Rennie Schafer. “Already we are seeing enquiry levels increase towards normal levels as people with a storage need created by the COVID-19 crisis contact self storage stores looking to take space once lockdown restrictions are eased.” Philip Macauley, Partner, Valuation & Advisory at Cushman & Wakefield, said: “As we have witnessed in previous years, and particularly in these uncertain times, the underlying attributes and resilience of the sector are driving the investment market. Appetite continues to emanate from a wide range of sources, including private equity, institutions and private wealth. Demand continues to outstrip supply, resulting in investors willing to pay premium prices for individual assets as well as portfolios. Investor preference continues to be for prime assets, but given the restriction around supply.” The resilience demonstrated by the self storage sector is echoed by warehousing and logistics, all of which will continue to prove critical as the our region and the nation at large continues to navigate the pandemic. © Shutterstock /SasinT ipchai www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 19 COMMERCIAL PROPERTY 16-19.qxp_Layout 1 05/06/2020 09:31 Page 4Next >