Due for completion in 1996, the Blackwater Valley relief road is already boosting occupier interest in the area, writes Paul Strohm.
The opening of junction 4a on the M3 has already dramatically improved perceptions of the Blackwater Valley towns. But a much more significant boost to communication is to come. Work on the Blackwater Valley relief road is well under way and a number of companies have already anticipated the improvement. As a result, 1993 saw a spate of substantial lettings.
“Last year, the benefits of the Blackwater Valley became more widely recognised by major employers,” says Vail Williams’ Paul Lewis. “We believe that many other companies will recognise the Blackwater Valley as a major centre with many attractions, although in the short term there may be a hiatus, given the lack of new development.”
When completed, the Blackwater Valley relief road will link junction 4 of the M3, pass down the eastern side of the valley and link with the A31 at the Hog’s Back. The dual-carriageway is being built in three stages: the northern and southern portions will be completed first and the mid section should be opened in 1996.
The county boundary winds south through the Blackwater Valley centres of Camberley, Frimley, Farnborough, Fleet and Farnham, flicking back and forth from Surrey to Hampshire, but in property terms the area is almost a single conurbation. And, like most towns, the Blackwater Valley office market is two-tier: on paper there is ample supply, in practice there is a limited amount of large units of modern space.
In the town centres, 1993 saw lettings at the 86,000-sq ft Spectrum Point, near Farnborough Station. CSC Computers and Halifax Building Society took the bulk of the building, which was developed by Crest Estates and sold to Scottish Amicable following the lettings.
On the opposite side of Farnborough Road, National Westminster Bank and Hogg Robinson Business Travel each took 20,000 sq ft at London & Manchester Assurance’s refurbished Abbey House. There were several disposals at Ancells Business Park, Fleet, where existing tenants included EDS, Richard Group, SISL, and the Roland Group.
Early in 1993, Vail Williams and Pepper Angliss & Yarwood finished letting Fleetwood Park, MEPC’s 65,000-sq ft office campus. Motorola and Stratacom have 25,000 sq ft each, Hayes Microcomputer Products and HM Inspector of Pollutants both took 8,000 sq ft.
At Chartwell Land and Salmon Developments’ Gates development, also on Ancells Business Park, voicemail specialist Octel took the 14,000-sq ft Eastgate House in October. The Octel letting leaves only the 21,000-sq ft Westgate House and there is believed to be interest in that – the quoting rent is £17.50. The scheme’s letting team comprises DTZ Debenham Thorpe, King Sturge and Pilgrim Miller.
Meanwhile, Hollis Hockley sold Prudential Insurance’s 25,000-sq ft former Base 10 building to German company Festo. Headline rents fluctuate throughout the Blackwater Valley and in Farnborough, but when incentives are stripped out most deals are thought to equate to £11 or £12 per sq ft. In the Surrey town of Camberley, at the head of the Blackwater Valley, new, high-quality, air-conditioned buildings have achieved headline rents of £14 to £15 per sq ft.
The office market in Camberley has been “exceptionally quiet”, according to Jeremy Nokes of London Clancy. However, he claims that there is interest in two buildings in Park Street at £13.50 per sq ft. Camberley’s existing occupiers include Sun Micro Systems, EDS, Nuttall and Charles Church.
Aldershot is perceived as a barracks town rather than an office centre, which means lower rents than in surrounding towns, says Jonathan Hollis of Hollis Hockley. But he believes that the Blackwater Valley relief road should change this. Pilgrim Miller’s Peter Richards recalls that, last year, incentives included rent-frees of 12 to 18 months and break clauses at five years. But now, he argues, decreasing supply and rising interest mean that landlords can stand firm and break clauses are being pushed out to 10 years.
But it is not just improved demand that is making the agents’ lives easier: “The investment market has been prepared to accept properties with break clauses whereas a year ago it would not.” says Richards.
The quoting rent at Arlington’s Aerospace Centre of £25.50 per sq ft has just been reduced to £21 per sq ft. Of the development’s nine buildings – totalling 585,000 sq ft – six were originally let to Arlington parent British Aerospace, which moved 1,200 staff there in a phased occupation during 1993. This deal left just over 120,000 sq ft available – the 42,000-sq ft Brennan House, 30,000-sq ft Park West One and 50,000-sq ft Park West Two.
However, BAe has recently announced a change in policy: it now plans to occupy the Park West Buildings, freeing up the 78,000-sq ft Bristol House. Lewis believes that this will all help to boost demand for the high specification scheme. “A year ago prospective tenants could have looked at several schemes. But now the situation is different. Some companies need that sort of space and may not be able to wait for a design-and-build scheme.”
Just on the market is Pinehurst Park, Farnborough, where there is 62,000 sq ft available in a two-storey building and converted convent which has parking for 324 cars. Tenant Data Sciences wants to assign or sublet its space and, although the passing rent is £21 per sq ft, incentives are being offered to help to achieve this.
Also in Farnborough, Vail Williams has about 13,000 sq ft available at Spectrum Point, while at Abbey House, London Clancy and J Trevor have 10,000 sq ft still to go. At Pyramid House, Hollis Hockley and Healey & Baker are trying to dispose of 42,000 sq ft in floors of 14,000 sq ft. The passing rent is £18 per sq ft, although £15 is being sought.
There are several buildings available on Victoria Road, Farnborough, including the 12,500-sq ft Victoria House, which is on the market for £9.75 per sq ft, and York House. Here, Jones Lang Wootton and Countrywide are marketing 13,500 sq ft which was developed by A & J Mucklow and completed 18 months ago.
In Fleet town centre the 20,000-sq ft Admiral House is on the market at £10 per sq ft. Built in 1986, the building was let to Homeloan Management which is trying to dispose of its lease. The passing rent is £14 per sq ft with a review in 1996, but the tenant is looking for £10 per sq ft.
Between Fleet and Hook, Amdahl wants to dispose of the freehold of its European headquarters at Dogmersfield Park. This offers 35,000 sq ft of space on 23 acres with consent for a 35,000-sq ft extension, and agent Jones Lang Wootton says that the £10m asking price has already produced interest.
Only a small amount of space remains at Miller Developments’ Farnham Business Park, where existing tenants include Plasmec, Earth Observation Sciences and Digby & Nelson. Agents Campbell Gordon and Healey & Baker are asking £12 per sq ft.
There are a number of converted period buildings available outside Aldershot, including Hays Distribution’s 15,500-sq ft Manor Park House. The building is on the market through Hollis Hockley and DTZ Debenham Tewson for £6 per sq ft. Hays is also disposing of Manor House, Aldershot, which is on the market for £9.50 per sq ft, while Molex wants to assign or sublet the 7,000-sq ft Nell Gwynne house at £7 per sq ft.
“In 1994 we are going to see developers buying prime office sites”, says Richards. One which may not be on the market, however, is Trafalgar House’s 1.4-acre site at Ancells Business Park. It has been on the market at £450,000 per acre with planning permission, but it now seems that the company will develop itself.
