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Stacey Meadwell

28 October 2006

Glimmer of light The Thames Valley market, hit severely by the dot.com crash, is seeing the start of speculative schemes. Stacey Meadwell reports

The percentage change in rental figures for the Thames Valley over the past 10 years is depressing. According to Jones Lang LaSalle’s figures, nearly every key centre has seen a drop of at least 12%, some as much as 28%, since 2001.

None the less, agents have been patient, and the market is showing slow and steady signs of recovery.

While take-up for the first half of the year showed mixed fortunes among the Thames Valley towns, predictions for a better second half seem to be substantiated.

According to Cushman & Wakefield’s research, take-up of properties of more than 20,000 sq ft for Q3 was up 31.1% on Q2.

“There are seven deals in solicitors’ hands and, if they all go through, take-up for 2006 will be 1.434m sq ft, above 2005’s total take-up of 1.426m sq ft,” says Karen Eames, researcher at Cushman & Wakefield.

It is only a marginal increase but, in a market that has suffered, it
is encouraging.

Average prime rents have also shown a marginal increase in most towns, with Slough the biggest winner with an increase of 8.7% from the start of the year, to reach £25 per sq ft.

Consultant PMA Promis predicts an average growth of 4.5% over the next four years a figure that outstrips its forecast of an average 3.8% for the UK over that period.

Supply was increasing at the start of the year, but the general supply trend is now downwards, says Cushman & Wakefield. This is welcome relief to a region that saw as much as 7m sq ft available in 2003. That figure has dropped by 3m sq ft since then.

Space being marketed by occupiers still accounts for 26% of overall supply figures, but availability still varies widely from centre to centre.

Speculative starts

Few developers are confident enough to start speculative schemes. However, some are, something that would not have been considered feasible until recently.

For example, notable development activity includes Arlington’s 108,000 sq ft in three buildings at its Arlington Business Park in Reading, and Bellhammer/Kenmore’s 33,230 sq ft Room 404 in Maidenhead.

While this may appear significant, according to Cushman & Wakefield’s Thames Valley report, this new wave of development accounts for just 0.5% of total stock in the market.

The market is not going to set the world on fire, but there could be a glimmer of light.

Glimmer of light The Thames Valley market, hit severely by the dot.com crash, is seeing the start of speculative schemes. Stacey Meadwell reports The percentage change in rental figures for the Thames Valley over the past 10 years is depressing. According to Jones Lang LaSalle’s figures, nearly every key centre has seen a drop of at least 12%, some as much as 28%, since 2001. None the less, agents have been patient, and the market is showing slow and steady signs of recovery. While take-up for the first half of the year showed mixed fortunes among the Thames Valley towns, predictions for a better second half seem to be substantiated. According to Cushman & Wakefield’s research, take-up of properties of more than 20,000 sq ft for Q3 was up 31.1% on Q2. “There are seven deals in solicitors’ hands and, if they all go through, take-up for 2006 will be 1.434m sq ft, above 2005’s total take-up of 1.426m sq ft,” says Karen Eames, researcher at Cushman & Wakefield. It is only a marginal increase but, in a market that has suffered, it is encouraging. Average prime rents have also shown a marginal increase in most towns, with Slough the biggest winner with an increase of 8.7% from the start of the year, to reach £25 per sq ft. Consultant PMA Promis predicts an average growth of 4.5% over the next four years a figure that outstrips its forecast of an average 3.8% for the UK over that period. Supply was increasing at the start of the year, but the general supply trend is now downwards, says Cushman & Wakefield. This is welcome relief to a region that saw as much as 7m sq ft available in 2003. That figure has dropped by 3m sq ft since then. Space being marketed by occupiers still accounts for 26% of overall supply figures, but availability still varies widely from centre to centre. Speculative starts Few developers are confident enough to start speculative schemes. However, some are, something that would not have been considered feasible until recently. For example, notable development activity includes Arlington’s 108,000 sq ft in three buildings at its Arlington Business Park in Reading, and Bellhammer/Kenmore’s 33,230 sq ft Room 404 in Maidenhead. While this may appear significant, according to Cushman & Wakefield’s Thames Valley report, this new wave of development accounts for just 0.5% of total stock in the market. The market is not going to set the world on fire, but there could be a glimmer of light.