At the fringe, but on top?

News

14 April 2001

As neighbouring counties reach saturation point, Surrey is eager to mop up the surplus demand for space by hi-tech companies, writes David Tuffin

This time last year Surrey, like a number of other South East counties, seemed poised to capitalise on demand for high-quality office and industrial space that its saturated neighbours could not meet.

The surge in activity in the technology, media and telecoms – TMT – sector, hastened by the dot.com phenomenon, accounted for 50% of office take up and 32% of industrial take up across the South East.

This put a substantial strain on existing stock levels in traditional hotspots like the M4 west corridor and created a new and distinct set of requirements for occupiers, says chartered surveying firm Rogers Chapman. With speed to market and satisfying end-user demand seen as essential to success, many operators were prepared to pay premium rents. Surrey was waiting in the wings to mop up.

However, uncertainty over the USA and worldwide economy, particularly the TMT sector, is building. If the dot.com bubble does eventually burst, demand will fall and speculative and co-location developments in Surrey will tail off fast.

Bright prospects

Any downturn in the technology sector is unlikely to continue endlessly. Concerns about general economic conditions apart, Surrey’s prospects are bright compared to some parts of the South East. Location is a key selling point, with good access to air freight terminals – Heathrow and Gatwick – motorways and rail networks.

Brixton’s Watchmoor Park in Camberley illustrates this point. Now fully let after a preletting of 3,252m² (35,000 sq ft) to Britax Rumbold last year, it is one of a number of schemes that benefited from overheating in the M4 corridor and elsewhere. Locations such as Chertsey, Leatherhead, Redhill, Reigate and Epsom, which might be considered “fringe”, are also emerging as leading cost-effective alternatives.

Yet how useful is it to talk in terms of counties? Chartered surveying firm Vail Williams says that Blackwater Valley, on the Surrey/Hampshire border, is an economic area in its own right. Already well-known for telecoms occupiers like Nokia and Sun Microsystems, Blackwater Valley will expand further this year with new developments including a 14,864m² (160,000 sq ft) business park at Farnborough by Slough Estates and a 18,580m² (200,000 sq ft) scheme by Development Securities. Indeed, the level of construction in Blackwater Valley is similar to that in Reading.

Strong retail activity

Regardless of events in the TMT sector, Surrey is set to attract increasing numbers looking for a strong labour market, says Rogers Chapman. Many towns have the working environment and shopping facilities to pull in potential employees, illustrated by recent lettings in Guildford to Regus and Avaya totalling 15,445m² (166,251 sq ft) and proposed developments at Guildford Plaza and Onslow House.

In the retail market, Surrey is perceived as lacking sufficient space and demand is outstripping supply. A wave of new development is meeting the shortfall, such as the planned extension to Guildford’s Friary Centre and the extension to Camberley’s Main Square scheme, each covering 27,870m² (300,000 sq ft).

As occupier demand grows across the spectrum, Surrey is well-placed to take full advantage, as long as economic conditions do not take a turn for the worse.

As neighbouring counties reach saturation point, Surrey is eager to mop up the surplus demand for space by hi-tech companies, writes David Tuffin This time last year Surrey, like a number of other South East counties, seemed poised to capitalise on demand for high-quality office and industrial space that its saturated neighbours could not meet. The surge in activity in the technology, media and telecoms – TMT – sector, hastened by the dot.com phenomenon, accounted for 50% of office take up and 32% of industrial take up across the South East. This put a substantial strain on existing stock levels in traditional hotspots like the M4 west corridor and created a new and distinct set of requirements for occupiers, says chartered surveying firm Rogers Chapman. With speed to market and satisfying end-user demand seen as essential to success, many operators were prepared to pay premium rents. Surrey was waiting in the wings to mop up. However, uncertainty over the USA and worldwide economy, particularly the TMT sector, is building. If the dot.com bubble does eventually burst, demand will fall and speculative and co-location developments in Surrey will tail off fast. Bright prospects Any downturn in the technology sector is unlikely to continue endlessly. Concerns about general economic conditions apart, Surrey’s prospects are bright compared to some parts of the South East. Location is a key selling point, with good access to air freight terminals – Heathrow and Gatwick – motorways and rail networks. Brixton’s Watchmoor Park in Camberley illustrates this point. Now fully let after a preletting of 3,252m2 (35,000 sq ft) to Britax Rumbold last year, it is one of a number of schemes that benefited from overheating in the M4 corridor and elsewhere. Locations such as Chertsey, Leatherhead, Redhill, Reigate and Epsom, which might be considered “fringe”, are also emerging as leading cost-effective alternatives. Yet how useful is it to talk in terms of counties? Chartered surveying firm Vail Williams says that Blackwater Valley, on the Surrey/Hampshire border, is an economic area in its own right. Already well-known for telecoms occupiers like Nokia and Sun Microsystems, Blackwater Valley will expand further this year with new developments including a 14,864m2 (160,000 sq ft) business park at Farnborough by Slough Estates and a 18,580m2 (200,000 sq ft) scheme by Development Securities. Indeed, the level of construction in Blackwater Valley is similar to that in Reading. Strong retail activity Regardless of events in the TMT sector, Surrey is set to attract increasing numbers looking for a strong labour market, says Rogers Chapman. Many towns have the working environment and shopping facilities to pull in potential employees, illustrated by recent lettings in Guildford to Regus and Avaya totalling 15,445m2 (166,251 sq ft) and proposed developments at Guildford Plaza and Onslow House. In the retail market, Surrey is perceived as lacking sufficient space and demand is outstripping supply. A wave of new development is meeting the shortfall, such as the planned extension to Guildford’s Friary Centre and the extension to Camberley’s Main Square scheme, each covering 27,870m2 (300,000 sq ft). As occupier demand grows across the spectrum, Surrey is well-placed to take full advantage, as long as economic conditions do not take a turn for the worse.