You could be forgiven for thinking that queues were forming on the M3 as Basingstoke’s big employers shut up shop in the town and moved their businesses elsewhere.
This month Alberto Culver, the hair-care and beauty product company, closes its office at Hampshire International Business Park, Chineham, taking 90 jobs with it.
Earlier in the summer, De La Rue said it would move its holographic business from the town’s Stroudley Road to Bolton; telecoms giant Ericsson announced in June that it would close its base at Chineham Park; while Macmillan Distribution will shut its warehouse at Houndmills Industrial Estate, all of which add up to the loss of 235 jobs.
Friends Life will pull out of Dextra Court by the end of next year, costing a further 155 jobs.
Now comes perhaps the cruellest cut: Chinese telecoms giant Huawei, which chose Basingstoke for its 35,000 sq ft debut in the UK, is understood to be looking at locations closer to Reading and the M4 corridor.
While the chance that Huawei will stay put in its existing space at Jay Close and Faraday Office Park is not being dismissed, the smart money is on a move north into the Thames Valley after a 2013 lease break. CBRE, which is advising Huawei, declined to comment.
The news is not all bad. Basingstoke and Deane council says it is investing up to £40m in regeneration and economic development – a hefty commitment when council services are faced with cuts. There have been new arrivals, especially in the industrial sector: Warburtons, Bacardi and Laleham Healthcare are among those expanding in the town.
Also encouraging is the decision by Network Rail to buy a 6-acre site at Gresley Road, next to the Basing View office district, for a 1.75m sq ft business campus.
This is by far the biggest deal the town has seen in years. It will provide space for project management and signalling teams and a design centre for the south-western lines from Waterloo.
Moving jobs to Basingstoke
Network Rail says that up to 3,000 staff are employed on the tasks today and many of those jobs will move to Basingstoke over the next 15 years.
The problem is that good news for the day after tomorrow does nothing to help with problems today. For now, hopes rest on the redevelopment of Basing View, which provides the town’s biggest and best prospect for reviving its appeal in the office market (see panel).
James Brounger, managing director of southern agency at CBRE and an adviser to the council on Basing View, says: “The spate of firms moving out of Basingstoke is a function of wider economic conditions, such as international mergers and acquisitions, which are beyond Basingstoke’s control. But also potentially they are a sign that occupiers don’t yet see the town having the office space they need.”
Solving Basingstoke’s office market problem will come down to money, says London Clancy director Jim London.
He explains that Basingstoke’s headline rent of £22 per sq ft is too low to make new-build viable and occupiers are used to paying less: “Unless you need to move into expensive accommodation, you’re not going to move from £13-£14 per sq ft space in Basing View into something above £25 per sq ft.”
Slow progress letting MEPC’s 42,000 sq ft Central 40 office building at Chineham Park – on the market since late 2008 – demonstrates the problem.
The quoting rent at Central 40 has come down from £22 per sq ft to £19 per sq ft. Owner MEPC says it has been talking to one occupier about taking the entire property, and to others about floors.
As leases begin to fall in on the existing relatively low-rented Basing View office blocks, the council will be hoping that the upheaval of moving out of the town is sufficiently off-putting to deter most occupiers from leaving.
Hoping for prelets
The council may also be hoping that some of those occupiers could be interested in signing the relatively expensive prelet that will be necessary to get the Basing View redevelopment started.
Defence contractor Thales, which occupies 120,000 sq ft in Mountbatten House, Basing View, will be on the council’s hit list. Thales’ next lease event is in 2016 – which fits neatly with the Basing View redevelopment timetable – and according to Piers Leigh, director at Jones Lang LaSalle and an adviser to Thales, the firm is considering its options.
“The existing building is close to functionally obsolete,” he says. But with the defence industry facing an uncertain future, thanks to public spending cuts, Thales is not likely to be in a mood for grand gestures.
Leigh says: “Thales is watching the Basing View project with interest, but the likelihood is that it will either stay put or move to good-quality, relatively low-rent secondhand space.”
If too many occupiers think like Thales, getting Basing View – and with it, Basingstoke’s office market – back on the road to success could be hard work indeed.
Basing View
Either Muse or John Laing will end up redeveloping Basingstoke’s 1.8m sq ft Basing View office district.
The two shortlisted developers will learn on Wednesday which has landed the job, which includes 900,000 sq ft of mixed-use space.
The first development site will be that of the recently demolished City Wall and Loddon Houses.
The council has set aside £10m to help get the new Basing View off the ground.
It has, realistically say agents, decided against insisting on speculative development. Instead, prelets in the wake of a 2012 marketing campaign are the big hope.
The masterplan for the 65-acre scheme includes a downtown area, with a piazza and a pedestrian boulevard linking the site to the town centre.
