The vacancy rate in Inverclyde – Glasgow’s westernmost industrial submarket – has fallen markedly following a succession of noteworthy deals, including the area’s largest new industrial letting in 16 years. The turnaround comes after the futures of two 300,000 sq ft warehouses were secured.
As reported by property information and marketing provider CoStar, Ferguson Marine recently acquired 77,000 sq ft of industrial and manufacturing space at 2 Cartsdyke Avenue, premises owned by Dalglen – the investment company of McGill’s bus tycoons and former Rangers Directors James and Sandy Easdale. The firm snapped up the building in an opportunistic property play mid-2018 after it was vacated by collapsed electronics reseller Misco UK.
PPE supplier JBS Group’s acquisition of a 75,000 sq ft warehouse at Port Glasgow Industrial Estate, Scottish Gymnastics’ move to 10,000 sq ft at a nearby industrial block on Gareloch Road and ARC Fleet Services occupation of 50,000 sq ft at Ingliston Street in Greenock have also served to boost absorption in recent quarters.
As a result, Inverclyde’s vacancy rate has dropped by some 500 bps in the past year, considerably more than any other Glasgow industrial submarket.
Andrew Bowman, Director of Inverclyde-based commercial property firm Bowman Rebecchi and junior vice-president of Inverclyde Chamber of Commerce said:
"It has been a positive year for the Inverclyde business community, particularly with the aforementioned larger commercial units successfully occupied.
"The major landlords like Dalglen Investments, Riverside Inverclyde, Gallagher Retail Park and M7 Real Estate are all enjoying high occupancy rates across their portfolios with tenants and units of all sizes and sectors.
"The office and retail market continue to be slower than their industrial counterparts, however, both Gourock and Port Glasgow Retail Park show there is a healthy market for shoppers.
"In order to meet the growing demand, attention has turned towards further development, with confidence and interest growing steadily in Inverclyde as a base to do business."
However, conditions in Inverclyde could have been less positive. The submarket avoided two large vacancy shocks last year after Amazon extended its lease on 290,000 sq ft at Faulds Park in Gourock and semiconductor company Diodes stepped in to save Texas Instruments’ 320,000 sq ft manufacturing plant in Greenock from closure.
The futures of both of facilities hung in the balance last year before a buyer was found the Texas Instruments plant, which had been earmarked for closure since 2016; and as landlord M7 Real Estate served Amazon with an eviction notice on the Gourock property, which was reportedly under rented, having avoided rental uplifts for 15 years.
"There is little doubt that the extension agreed by Amazon and the larger investment into the Diodes Incorporated plant came as a huge relief to the local workforce and the business community.
"What has to be remembered is that these two, in particular, are high-performing specialist sites, with the available workforce locally ensuring that they remain this way."
Vacancies in Inverclyde remain higher than Glasgow’s other industrial submarkets, however, partly because much of its stock is relatively specialised in nature, having been constructed for firms in the shipbuilding and electronics manufacturing industries, formerly major sources of employment in the area.
Inverclyde’s future as an industrial location looks brighter than it once did though, with Glasgow City Region City Deal funding allocated to the expansion of Greenock Ocean Terminal, the transformation of Inchgreen Dry Dock and improvements to increase the capacity of the A78 trunk road around Inverkip.
The area could further benefit from the UK government proposals to create ‘freeports’, should Greenock Ocean Terminal apply for such a status, exempting companies from normal tax and customs rules and therefore potentially boosting local economic activity.