Agents pick most significant recent deals (Six months to end of March)
Enterprise House, Isambard Brunel Road, Portsmouth
Type of deal Office lease
Landlord Link House Investments
Tenant Bernard Chill & Axtell Solicitors
Size 1,137 sq ft
Rent £12 per sq ft
Chosen by Tom Holloway, director, Holloway Iliffe & Mitchell
This deal is not particularly large, but I consider it an excellent example of a trend emerging in Portsmouth that sees occupiers snatching the last remaining space in the few prominent office buildings as the lack of availability becomes more evident.
Enterprise House is one of Portsmouth’s landmark offices. It was sold by LaSalle Investment Management in June 2013 and, while confidence in the economy was still weak, the building remained only partly let. However, in recent months Bernard Chill & Axtell managed to secure the last remaining space as it continues its business expansion across the south.
Portsmouth is beginning to return to pre-recession levels as occupiers commit to new space. With no speculative development on the horizon, we also expect see greater infill developments. This is starting to have a positive effect on rental values which, having suffered during the recession, are now stable.
Hill House, Richmond Riverside, Richmond
Type of deal Office lease
Landlord Orchard Street Investment Management
Tenant Ebay
Type of deal Leasing
Size 16,500 sq ft
Rent Confidential
Chosen by Stuart Austin Director, South East office agency, JLL
The letting of Hill House to Ebay is of particular note as it has taken the Richmond office market a step closer to achieving rents of £50 per sq ft.
The building has undergone refurbishment by its owners Orchard Street Investment Management with the aim of differentiating the product from more traditional office interiors. This has paid off, seeing the building commanding higher than average rents.
Despite Richmond seeing a number of refurbished and new-build offices come to the market over the past two years, all of which have leased well with minimal void periods, the deal at Hill House highlights a growing occupier trend in terms of demand for well-finished, thoughtfully designed office space and a willingness by them to pay an above-average price to secure it.
Velocity, Weybridge
Type of deal Office lease
Landlord Rockspring Property Investment Managers
Developer Exton Estates
Tenants LG & Cargill
Size 48,000 sq ft/25,000 sq ft respectively
Rent £31 per sq ft/£31.50 – £33.00 per sq ft respectively
Chosen by Luke Hacking, director, CBRE
As the supply of grade-A space continues to diminish across the South East, investors and developers that have built offices speculatively are now well positioned to capitalise on this supply/demand imbalance. In a good example of this, Rockspring and Exton Estates have just secured LG for a relocation of its UK headquarters into the 48,000 sq ft Velocity 2 building. This comes only weeks after they leased 25,000 sq ft in Velocity 1 to Cargill.
The scheme is now 75% let and underwrites the strategy to deliver grade-A offices in specific locations across the under-supplied South East market.
With only 32,000 sq ft remaining a decision has been made to push the quoting rent up to £35 per sq ft reflecting Rockspring’s confidence in both the development and the market. This will give a further boost to investors and developers and I expect to see headline rents moving forward – driven by such speculative schemes.
People, politics and peculiarities
Experience counts
As the South East office property market hots up, several agencies are opting for experience when it comes to bolstering their teams. Vail Williams’ Heathrow office has welcomed Matt Clarke, who has worked in commercial property for nearly two decades, while over at Savills, Piers Nickalls returns to the fold – re-joining the South East offices team where he first started in 1998.
Council goes shopping
Broxbourne council officials were at MIPIM courting possible development partners for Tesco’s 10-acre Cheshunt headquarters complex. Tesco delivered a bombshell at the beginning of the year, reportedly leaving the authority “gobsmacked” by a decision to vacate its home of some 40 years in favour of Welwyn Garden City. Broxbourne council says commercial activity on the site is a priority. For its part, Tesco, which owns the majority of it, is said to be happy to sell if the right buyer surfaces.
What’s the next big thing?
Celebrating its 250th anniversary this year, Cluttons becomes the oldest chartered surveyors in the world. Looking ahead, it has launched – with Estates Gazette – The Next Big Thing, a competition to bring future property ideas to life with a £1,000 prize attached. For details see www.estatesgazette.com/thenextbigthing.
Dave’s not the man for Wisley
Mike Murray, project manager of Wisley Property Investments (WPI), who has been targeted by protesters upset about WPI’s proposals for a 2,100-home new town on the former Wisley Airfield site in Surrey, has been keeping tight-lipped about who is financing the project. He has, however, ruled out prime minister David Cameron. “I can guarantee,” he’s been reported as saying, “the only person involved in the business who is a politician is me,” says the Oxfordshire Conservative councillor.
New at the top at Vail Williams
Vail Williams is having a change at the top. Ian Rudland will step down as chief executive after 17 years – although he stays as a partner. His successor is Matthew Samuel-Camps, who started at the firm as a graduate in 1988.
First stage for MK scheme
A £20m scheme in Milton Keynes, including hotel, retail and leisure space, received the go-ahead from council planners. UGS MK’s scheme will be the final phase of the theatre district.
Carrigmay Developments lodged plans for a £30m riverside scheme that will act as a gateway to Reading. Kings Point, on the River Kennet, would include 109 flats in towers ranging from seven to 19 storeys.
ONS figures showed South East residential rents rising the fastest in two years, with a 2.1% increase in the 12 months to December 2014.
Driving change in Bracknell
Two sites in Bracknell, totalling 13 acres, which were BMW’s home for 30 years, were bought by SEGRO in an £18m deal that will see it demolish existing space and develop a 200,000 sq ft industrial scheme. Elsewhere in the town, 3M’s headquarters also looked likely to change hands with reports that M&G was planning to put it up for sale for £70m.
Land Securities and the Crown Estate began preparatory works on the £440m Westgate Oxford scheme, H&M and Superdry are among recent signings for the 800,000 sq ft centre.
Bromley council ended talks with Chinese developer Zhongrong over the company’s plans to construct a replica Crystal Palace. The authority felt an agreement looked unrealistic.
EG gauges the trials and tribulations of the South East property market
