Agents pick the most significant deals (for the six months to end of March 2016)
Reed House, Broadland Business Park, Norwich
Type of deal Office letting
Landlord Lothbury
Sub-tenant Integrated Care 24
Size 15,212 sq ft
Rent £14.50 per sq ft
Chosen by Will Jones, partner, Bidwells (Norwich)
This sub-letting to Integrated Care 24, from where it provides 111 services to the NHS, is by far the largest to take place in Norwich over the past six months. It is also one of the largest deals over the past two years. It illustrates the continuing improvement in the Norwich office market, as requirements increase – many driven by existing buildings becoming outdated and by company expansions. There remains, however, a shortage of grade-A space and larger floorplates over 10,000 sq ft. With supply in the city centre being further restricted as a result of a number of large vacant buildings being converted to residential, opportunities for occupiers are becoming increasingly limited. Against a backdrop of such market conditions, this letting took place very soon after the building formally came to the market. The deal also brings an added boost for Norwich because IC24 is a new occupier for the city.
Worldwide House, Thorpe Wood, Peterborough
Type of deal Investment
Vendor Curzon Advisers
Buyer Maya Capital
Tenant Travelex
Size 164,000 sq ft
Sale price £23m
Yield 10%
Chosen by James Vivian, associate director of investment, Savills
This is one of the largest investment deals in Peterborough so far this year. The high sale price reflects strong investor demand, which is largely based on a thriving occupational market. Key property fundamentals were vital to the acquisition but, set against strong demand, an increasingly scarce availability of office space was also a significant driving factor. Worldwide House is, in fact, the only notable out-of-town building offering large floorplates. Last year saw overall supply decrease significantly, with more than 350,000 sq ft of office space being let or sold. Additionally, around 500,000 sq ft of offices have been sold for residential development in the past 18 months and we are beginning to see a real shortage of quality business accommodation. All of this is putting upward pressure on rents – now £13 per sq ft for good-quality, secondhand space – with the rare sites for D&B likely to achieve £20 per sq ft.
140 Cambridge Science Park, Cambridge
Type of deal Office letting
Owner Mayfair Capital
Tenant DisplayLink (UK)
Size 26,150 sq ft
Price Undisclosed
Chosen by George Fellowes, Associate, Carter Jonas (Cambridge)
DisplayLink’s letting of just over 26,000 sq ft not only demonstrates the attraction of Cambridge as a technology and creative hub, the property search itself illustrates the complexities of finding space in the city. The company had undergone a period of rapid growth, outgrowing its 12,000 sq ft offices in the city. It wanted to find property that would future proof its requirements for the next 15-plus years. It is widely acknowledged that the Cambridge office market is suffering from an undersupply of single occupier office buildings, especially those above 20,000 sq ft and, consequently, there were only three serious contenders. Negotiations began on 140 Cambridge Science Park which, of the three, offered the best space in terms of allowing for future expansion. Its location was an added attraction meaning, not surprisingly, the deal had to be concluded amid strong competition.
7 things you need to know
Vital statistics, face and figures for the East of England
£120m the cost of Peterborough Investment Partnership’s 20-acre, mixed-use Fletton Quays project, its first aimed at rejuvenating the city’s derelict sites
20% of commuters travel to work in Cambridge by bike, reflected in the provision of a 3,000-space cycle park at Brookgate’s CB1
£40 per sq ft prime office rents in Cambridge by 2020, compared with £35 at December 2015
5.9m total population for the East of England
590,000 sq ft industrial demand for Norwich, the highest figure since 2008/9
16.1% percentage of jobs in the food, drink and agriculture sector in Norfolk and Suffolk, also 14% of the region’s GVA
1.4m sq ft the amount of demand for office space in Cambridge, expected to drive rental growth of 4.3% over the next 12 months
Going up
Cybersecurity firm Darktrace, based in 5,000 sq ft at Broers Building in Cambridge, appointed Juniper Real Estate to search for a new 20,000 sq ft base in the city.
The University of Cambridge and housebuilder Hill received planning consent for 240 homes in the first phase of the North West Cambridge development.
Orbit Homes unveiled plans for the £70m St Anne’s Quarter in Norwich, comprising 437 homes, 22,000 sq ft of commercial space and a central plaza.
Brookgate appointed Bidwells to seek a funding partner for its £105m office scheme at CB1 in Cambridge. It plans 156,000 sq ft of grade-A office space.
Targetfollow Estates and Targetfollow Group announced plans for a flats and retail scheme at Dukes Wharf and a supermarket at the former Bally shoe factory site in Norwich.
A Grade II listed, freehold building in Northgate Street, Ipswich, was purchased by easyHotel with plans to convert it into a 94-bedroom property.
Going down
Office supply was under pressure, with Norwich yet to see speculative development in late 2015 and Cambridge witnessing a shrinking pipeline.
