Agents pick the most significant Deals (for the six months to the end of December 2015)
Woodlands Business Park, Milton Keynes, Bucks
Type of deal Investment
Vendor Moorfield Corporate Recovery on behalf of Cerberus Capital
Purchaser Barwood Capital
Size 135,000 sq ft plus 150,000 sq ft potential new build
Price £7.6m
Chosen by Roger Yates, partner and head of commercial, Bidwells
In an off-market transaction Woodlands Business Park has been acquired by Barwood Capital for its 2015 Fund. The 12.5-acre park, within a mile of Central Milton Keynes, comprises 10 buildings with land for new office development. Barwood Capital will undertake site-wide improvements and redesign the masterplan to provide much needed new grade-A office space. Construction is expected to start in mid 2016.
I believe the timing of the purchase of this asset is perfect, as the shortage of quality space in the town is acute and Woodlands will be able to accommodate larger requirements and offer brand new buildings. Development on this scale has not been seen in Milton Keynes for some time and we anticipate a significant advance in achievable rents – around £22.50 per sq ft now but moving towards £24-£25 during 2016 – as the town realigns itself with competing locations such as Oxford, Cambridge and the larger north M25 centres.
Kenrich House, Elizabeth Way, Harlow, Essex
Type of deal Freehold purchase
Vendor Kenrich Group
Purchaser The Fall family
Size 38,000 sq ft
Price £1.3m
Chosen by Neal Matthews, director, Strettons
This transaction is a perfect example of industrial landlords meeting demand for flexible business space within Harlow. It is of particular significance as it demonstrates how changing occupational needs require a different approach from landlords in what is a traditional, industry-focused town.
Kenrich House was purchased by the Fall family, through a trust company, following the sale of its 100,000 sq ft industrial estate in Argall Avenue, Leyton. It decided to look for new opportunities in Harlow as it recognised the need for flexible business space within the town. Under its new ownership, the property, a traditional 1970s factory building, is being transformed to provide units very much in demand but unavailable to an evolving business community in the town which requires a different, non-institutional approach from landlords. This is one of the first in what I predict will be a series of conversions to cater for small businesses.
Wharfedale Road/Eskdale Road, Winnersh Triangle, Berkshire
Type of deal Leasing
Landlord Oaktree Capital Management / Patrizia
Tenant REL Field Marketing
Size 30,000 sq ft (comprising 13,000 sq ft offices, 17,000 sq ft warehouse)
Rent/lease terms Undisclosed
Chosen by Kevin Cook, partner, Vail Williams
Field marketing company REL recently secured new premises at Winnersh Triangle which enabled it to relocate from Bracknell. One of the reasons I am highlighting this deal is that it exemplifies the fact that despite the Thames Valley’s much talked about status as the UK’s “fastest growing economic region outside London”, the market for companies wanting to make such a move is, in fact, very challenging due to the lack of available high-quality buildings.
The company was seeking a high office content warehouse of between 25,000 and 30,000 sq ft within easy striking distance of Bracknell town centre and, in this case, it took an 18-month search before a solution presented itself at Winnersh Triangle. I think this deal shows it is apparent that the commercial market is becoming increasingly under-supplied in certain areas and this pressure will only rise as development of new stock continues to be limited.
Sunny outlook from Savills
Savills predicted office take-up across the South East during 2016 would rise beyond 4m sq ft. The firm also anticipated 10% rental growth in the Thames Valley.
Towering housing
Kingston’s Tolworth Tower was destined to become a £300m residential complex after CNM Estates received the go-ahead for a 308 home scheme. Croydon’s Nestlé Tower also lay at the heart of a residential scheme for which Delancey was seeking a development partner.
Lucky 13 for tech park
Bloombridge and Hill Street Holdings’ £90m Oxford Technology Park on green belt land at Kidlington was approved by Cherwell District Council – 13 years after its first application.
Slough at the double
There were two major planning consents in Slough – Criterion Capital’s £300m residential and retail scheme, and Landid and Brockton Capital’s Porter Building office development.
Crawley consent
A £16m residential-led scheme by Inspired Asset Management was consented for a vacant office building in The Broadway, Crawley.
Oxford comes up short
Grosvenor’s 885-home regeneration of Barton Park, Oxford, faced being scaled back after Oxford City Council said a funding shortfall would affect its ability to buy a social housing element.
EG gauges the trials and tribulations of the South East property market
Vital statistics, facts and figures for the South East
3m sq ft
By mid-December last year office take-up had already surpassed 2014’s levels, up 13% on the previous year. It is still a long way off the heady days of the early 2000s when take up averaged 5m sq ft.
1/10
One in 10 office deals this year were over the £50m mark as UK institutions returned to the sector and buyers upped their lot sizes. More than £3bn was expected to transact by year end. BNP Paribas
4.8%
Industrial rents grew strongest in 2015 up 4.8% against offices (4.5%) and retail (0.6%).
Taittinger adds sparkle to land values
Champagne producer Taittinger has bought 171 acres at Stone Stile Farm near Faversham, Kent and is looking to plant 100 acres with a view to producing premium sparkling wine. As the champagne terroir moves north could this be the next market bubble for land owners?
6.7%
Average house prices in the South East grew by nearly 7% in 2015, to £251,000 against a national average of 4.5%. They are now 16.7% above their pre-recessionary peak.
8/12
Eight of the 12 Ministry of Defence sites put up for sale this month are in the South East. In total these cover 1.1m-acres and could accommodate 15,000 homes.
Data sources: BNP Paribas Real Estate, IPD & Nationwide
