Market activity in locations outside prime areas has reached new peaks, reports Cheryl Freedman
Stereotypes of Surrey tell only half the story. True, millionaire’s mansions, wooded lanes and cricket can be found on the village green. But the place is much more than just a rural retreat for the seriously wealthy.
The county’s built-up suburbs have seen plenty of property action over the past few months. Indeed, in certain cases, creeping demand has caused severe space shortages.
Towns like Sutton are reaping the rewards of poorly-stocked M25 neighbours. As Laurie Mason of Hillier Parker comments: “The continued upturn in the office market and take-up of space in prime office locations is having a beneficial effect on more fringe office locations such as Sutton.”
This new lease of life could assist Hillier Parker and Stiles Harold Williams with the letting of Sutton’s Chancery House, where two floors totalling 929m2 (10,000 sq ft) were recently refurbished.
Sutton’s appeal may shoot up further if the local authority’s plans to improve its commercial centre succeed. Frogmore has planning consent for a £3m refurbishment of the 34,838m2 (375,000 sq ft) St Nicholas Shopping Centre.
“This refurbishment is the first step in making shopping in Sutton special again,” says Frogmore’s Paul Shepherd.
Meanwhile, at nearby Worcester Park, supermarket chain Somerfield has opened a 1,672m2 (18,000 sq ft) store.
If Sutton’s shopping has some way to go, the joys of the huge 116,125m2 (1.25m sq ft) Whitgift Shopping Centre in Croydon are already well documented. It has been through a £14m phase three refurbishment – creating several new units with zone A rents of £753-£968 per m2 (£70-£90 per sq ft).
By all accounts, Croydon’s office market had an exceptional year in 1997. Take-up levels surpassed agents’ wildest expectations, standing at over 37,160m2 (400,000 sq ft) – compared with 10,684m2 (115,000 sq ft) in 1996.
Andrew Ostrer, director of Stiles Harold Williams, predicts: “This will be the first year since 1992 that will see rents moving forward and the market gaining further confidence.”
Rents remain competitive compared with M25 venues, such as Redhill or Leatherhead, says Ostrer. Stiles Harold Williams’ Croydon office focus shows Croydon’s top rents stand at £162 per m2 (£15 per sq ft ).
The headline news, however, has been generated by BT, which gobbled up the remaining slice of Scottish Amicable’s 16,487m2 (177,465 sq ft) Prospect West, taking a lease on 4,468m2 (48,097 sq ft).
Mike Parker of BT Property says: “Croydon provides an ideal office location for BT, and our taking Prospect West 3 is a confirmation of our vote of confidence in the town.”
Ed Bidwell of Weatherall Green & Smith reports that now Prospect is full, Croydon’s only significant new office space is Deramore Property’s 1,208m2 (13,005 sq ft) 34-35 Dingwall Road. Weatherall Green & Smith and Stuart Edwards Fullermoon quote a rent of £199 per m2 (£18.50 per sq ft).
Available in Croydon
Also on offer is the Lansdowne Building, a chunky 3,774m2 (40,625 sq ft) block available through Knight Frank and Michael Rogers.
They are acting on behalf of BAA/Lynton. Tenant Tarmac is exercising a break option, and the space will be ready for occupation in October.
Emma Goodford of Knight Frank comments: “The town is now considerably undersupplied in terms of new quality office space and, with some occupiers nearing lease breaks in 1960s and 1970s buildings, there are opportunities for developers to consider new developments.”
With its M25 links at junction 7, Croydon has also experienced healthy industrial action. John Hammond of Stiles Harold Williams says: “Because of its easy access to Central London and the motorway network, and a wide catchment area, the borough continues to be a sought-after location for manufacturers and distributors, many with bases well outside the Greater London area.”
According to Hammond, a shortage of good secondhand space has driven incentives, like large rent-free periods, downwards and rents upwards – past £65 per m2 (£6 per sq ft). At Silverwing Industrial Estate, off the A23 Purley Way south, secondhand rents have been achieved of £65 per m2 (£6 per sq ft) for a 389m2 (4,187 sq ft) unit. Rents at Progress Business Park off the A23 have reached £78 per m2 (£7.25 per sq ft).
Meanwhile, Hammond highlights a Croydon trend for crash repair centres. At Pegasus Park, on Imperial Way, a subsidiary of Perry Motor Sales is behind a design-and-build project which will create 2,369m2 (25,500 sq ft) of space – to be built by developer Central & Provincial Properties.
And, claims Hammond, Eagle Star has committed to 2,508m2 (27,000 sq ft) at Beddington Cross, Beddington Farm Road, where developer Quintain has outline planning consent for around 30,193m2 (325,000 sq ft) of distribution type space on a 7.1ha (17.5 acre) site.
Hammond says that Purley Way is especially sought after by telecommunications companies. Last year, Energis Telecommunications took 1,022m2 (11,000 sq ft) at Palace Street Developments’ Peterwood Park.
Elsewhere, Palace Street is spearheading speculative developments. Its latest scheme, known as Six 81 on Mitcham Road, is a joint venture with Taylor Woodrow and funded by Hill Samuel Property Unit Trust. Five units totalling 8,370m2 (90,100 sq ft) are now being built, with rents quoted at £78 per m2 (£7.25 per sq ft).
At Commerce Way, Bannertown Estates plans to speculatively build 1,700m2 (18,300 sq ft) of distribution and manufacturing space. Rents are quoted at £78 per m2 (£7.25 per sq ft).
All those Croydon employees itching for after-hours entertainment now have a new focus. Warner Village Cinemas has signed up as anchor tenant for Swan Hill’s new 13,935m2 (150,000 sq ft) retail and leisure scheme in central Croydon – the site of the old Grants department store. The £35m scheme is due to open in 2000.
As the office void widens, a major new scheme at Redhill, off junction 6 of the M25, may help fill it. Park 25 Redhill is a development between Anglo Lamron and Schroder Exempt Property Unit Trust, which gives scope for up to 15,979m2 (172,000 sq ft) of office accommodation on 14.6ha (36 acres).
Goodford comments: “The current letting strategy is to identify an occupier for the entire park for a single campus development.”
Redhill speculates
The first speculative industrial development in Redhill for 10 years is Surrey 8 – a 1,804m2 (19,420 sq ft) building in Wells Close developed by Chapel Street. Rents there are being quoted at £140,000 pa.
Still on Wells Close, Cooper Estates has negotiated an acquisition of 1.4ha (3.5 acres) and is seeking planning consent for 5,110m2 (55,000 sq ft).
Kingsfield business centre to the south east of the town, off Redstone Hollow, was acquired by Altyre Properties a year ago. Now, 4,645m2 (50,000 sq ft) of offices and light industrial has been refurbished. New occupiers there include TNT, Associated Newspapers and the NHS Trust, and 2,787m2 (30,000 sq ft) of speculative build is planned. Rents are quoted at £73 per m2 ( £6.75 per sq ft).
In Reigate, Michael Rogers reports that Redland House is available forshort-term leases of 3,252m2 (35,000 sq ft). Meanwhile, Knight Frank and Michael Rogers are advising Cooper Estates on the speculative development of a prime new headquarters of 673m2 (7,243 sq ft) on Bell Street. CalledSt Andrews House, it completes in July. According to Goodford it already has “considerable interest”.
Spearheading the Leatherhead market is Glencarron Properties’ and Scottish Provident Institution’s £14m Online Boulevard, now completing construction. The £12m development comprises two buildings of 1,533m2 (16,500 sq ft) and 1,892m2 (20,365 sq ft).
James Durie of Strutt & Parker, joint agents with Dickens Watts & Dade and Hurst Warne, comments: “Leatherhead and the entire southern section of the M25 is now facing a serious shortage of new office buildings. Developments like Online are essential if the region is to maintain its impressive track record of economic growth.”
Graham Piercy of Dickens Watts & Dade adds: “Given the low rate of construction starts on new office developments in the south west sector of the M25, the developers are confident that the scheme will attract increasing occupier interest as practical completion approaches.”
Savills, meanwhile, is acting with Michael Rogers on Fetcham Park House, on behalf of MEPC. The property is a Grade II-listed house of 1,152m2 (12,400 sq ft) on which offers of £3m are being sought. Savills and Michael Rogers are also marketing a new 3,995m2 (43,000 sq ft) office development, Ryebrook, on Kingston Road.
Epsom races
Unlike Leatherhead, Epsom is often neglected when occupiers scout round. But Ed Bidwell of Weatherall Green & Smith says that, despite this, vacancy levels are less than 6%.
Green Property is developing 1,579m2 (17,000 sq ft) of new space, known as Clayton House, on East Street, which completes in 1999. Weatherall Green & Smith is marketing Rosebery House on 61 South Street, a development by Scottish Mutual of 7,46m2 (8,030 sq ft). The only other new office available is Saddlers Court, which comprises 1,524m2 (16,400 sq ft).
Mark Skelton of Walter & Co comments: “Epsom has experienced a very active period in the office market over the past few months.” He says that more than 5,110m2 (55,000 sq ft) has been let in eight individual transactions of more than 186m2 (2,000 sq ft).
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Wates Way, Mitcham: Industrial. Hard Labour has taken 738m2 (7,940 sq ft) on a 15-year lease at £47 per m2 (£4.40 per sq ft). Quintin Scott acted jointly with St Quintin for Mucklow. City Link, Addiscombe Road, Croydon: Offices. Scottish Provident has let the 443m2 (4,765 sq ft) ground floor to Tolley Publishing, part of Reed Elsevier, on a 13-year lease with a tenants’ break clause at the end of the 10th year. Rent is £153 per m2 (£14.25 per sq ft). Strutt & Parker and Stiles Harold Williams acted for Scottish Provident. Whitgift Shopping Centre, Croydon: Retail. Bassi Enterprise, trading as Janash Menswear, has taken 80m2 (860 sq ft) on a 10-year lease at £38,500 pa. Lunson Mitchenall and Stiles Harold Williams acted for Barclays Property Investment. Whitgift Shopping Centre, Croydon: Retail. Optical Express has taken 166m2 (1,784 sq ft) on a 10-year lease at £45,000 pa. Stephen Lewis & Co represented Optical Express. Lunson Mitchenall and Stiles Harold Williams acted for centre manager Barclays Property Investment. Dorset House, Regents Park, Leatherhead: Offices. Business space provider Regus has taken 1,997m2 (21,500 sq ft) at £253 per m2 (£23.50 per sq ft) on a 15-year lease. FPDSavills and Hurst Warne represented Royal London. |
