Client: Cummins Engine Company
Our client Cummins Engine Company Ltd undertook a full logistics review in order to make sure their operations were run as effectively and efficiently as possible at their main manufacturing plant in Daventry.
For some time they had been using a third-party logistics operator to manage the parts supply and distribution. When their review highlighted the need to restructure their parts supply and distribution operation on a ‘just-in-time’ basis and to relocate the logistics warehouse closer to the Daventry plant, they came to us for advice on how to the resolve the property issues.
We were asked to look at all property options and we carried out a review of availability of existing and new buildings in the market. We were asked to advise on lease structure, rental costs, fit out and overall specification issues.
Having reviewed two existing building options, which were expensive to adapt for a modern logistics operation, we recommended that the best solution for our client was a design and build bespoke warehouse.
We short listed three sites and opened negotiations on two of those three, eventually achieving a rental saving of 75 pence per sq ft on the original quoting price and a rent-free equivalent of 12 months. Following extended negotiations, a 15-year lease with a tenant’s 10-year break was agreed and savings were assessed by the client on the overall deal at £626,294 against the quoted terms.
The building is a new 44,000 sq ft logistics warehouse at Badby Park, Daventry and the facilities will all serve the Royal Oak Daventry manufacturing plant.
Cummins head of business services, Dave Newsome, said, “This new facility will streamline our logistics operation reducing delivery times and logistics costs and is within five minutes drive of our manufacturing base in Daventry. We are pleased to have concluded this deal.”
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