Developments and refurbishments are barely keeping up with an office take-up which has seen vacant space drop two-thirds in just one year. Lisa Pilkington reports.
Basingstoke is booming. Woodford & Co’s Brian Pickett stresses: “The office market has gone ballistic.” And the trends seem to bear out his enthusiasm.
Andrew Newman of Vail Williams believes that an increasing number of companies along the M4 corridor are seeing the town as an attractive alternative location.
Katrine Sporle, chief executive at Basingstoke & Deane district council, says vacant office space has declined from 92,900m2 to 32,515m2 (1m sq ft to 350,000 sq ft)- a clear indication of market upturn.
Pickett explains: “Supply has come down quite substantially. There’s been a lot of take-up, to the extent that there is only one large building available in the town over 3,716m2 (40,000 sq ft). That’s the former Motorola headquarters at Chineham Gate, on Chineham Business Park.”
London Clancy, joint agent with Sharps Commercial for the building, is quoting a rent of £167 per m2 (£15.50 per sq ft).
Woodford & Co estimates that 49,330m2 (531,000 sq ft) of offices are available in Basingstoke, including 5,742m2 (61,810 sq ft) of new build.
Refurbishments are on the schedule too. Projects are under way at the 2,044m2 (22,000 sq ft) Intec 1 and 2,462m2 (26,500 sq ft) Intec 3, at Intec Business Park, on Wade Road. Prestbury Group bought the 23,225m2 (250,000 sq ft) complex from Royal & Sun Alliance last December for £13.25m.
London Clancy puts prime office rents in Basingstoke at around £162 per m2 (£15 per sq ft). These rents have stimulated developers such as Anglo-Lamron and National Mutual, who are jointly developing Lime Tree Gate at Hampshire International Business Park.
The 1,985m2 (21,370 sq ft) scheme is the first speculatively funded development since the early 1990s. It is due for completion this summer.
MEPC is due to begin work on 1,022m2, 1,301m2 and 1,765m2 (11,000 sq ft, 14,000 sq ft and 19,000 sq ft) units and a courtyard at the 4,645m2 (50,000 sq ft) Rosewood site on its Chineham Business Park. Vail Williams and King Sturge are joint agents on the scheme.
At Chineham’s Lindenwood phase, two buildings have been let on 15-year leases at £183 per m2 (£17 per sq ft) and a further two units are under offer. Work is also about to start on site at the park’s Hazlewood phase, while the Pinewood phase is now being marketed at £450,000 pa, equating to about £215 per m2 (£20 per sq ft).
Prelets are now being sought for 4,273m2 (46,000 sq ft) of offices at Summit Property and Acornford Development’s Viables Two on Jays Close.
Confidence in the industrial sector has been highlighted by Brixton Estates’ £43m investment at the 19.4ha (48 acre) Kingsland Business Park, where the developer intends to build speculatively units on two sites, aimed at small- to medium-sized occupiers.
Joint agents King Sturge and London Clancy confirm that all the existing buildings are under offer. The first five units, ranging from 883m2 (9,500 sq ft), will be available by December.
At Houndmills Industrial Estate, developers Liverpool Victoria Friendly Society and Kingspark Developments plan to redevelop the former SSI Schaefer works, with units ranging from 2,973-10,962m2 (32,000-118,000 sq ft). Meanwhile, at Trident, on Armstrong Road, Wilky Property Holdings is redeveloping the 0.9ha (2.2 acre) former Graham Builders Merchants site.
But Andrew Newman, partner at Vail Williams, is concerned about the council’s attitude to redevelopment. He says: “If the council wants to see much-needed redevelopment on industrial estates, it has got to unlock a few freeholds. BDDC views it as selling off the family silver, but it doesn’t understand that if it doesn’t sell the sites it’s all going to corrode.”
The council’s Sporle disagrees, citing its experience at the nearly derelict De La Rue building on Basing View: “If this was a major problem we wouldn’t get interest in sites like De La Rue’s, which is a demolition job. We’ve had so many enquiries we just can’t handle them,”she says.
Vail Williams puts 1997 industrial take-up figures at 26,000m2 (279,871 sq ft). The firm’s Andrew Barber says that the only speculative building developed over the past two years is the 6,596m2 (71,000 sq ft) Axis, for which Booker paid £61 per m2 (£5.65 per sq ft). This, he says, highlights the need for grade-A space.
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A new walk across the square
Grosvenor Estate Holdings and Basingstoke & Deane district council’s joint £250m redevelopment of New Market Square is set to transform the town. Prudential sold the retail centre, The Walk, to Grosvenor for £70m last spring and planning permission is expected to be granted on the expanded proposals over the next few weeks. Grosvenor’s development will provide a 74,320m2 (800,000 sq ft) retail centre adjacent to Hermes’ centre, The Malls. Hermes is rumoured to be in talks with Grosvenor about possible funding of the new scheme. The redevelopment will include a two-storey extension on the existing shopping centre. It will comprise some 50 units, a leisure and food complex and a multiplex cinema. There will be two major stores, one in excess of 9,290m2 (100,000 sq ft) and the other 4,181m2 (45,000 sq ft). Debenhams is rumoured to be the main anchor tenant. Plans to rebuild the existing bus station include an interchange, which is due to be completed next January. An extra 1,000 parking spaces will also be provided. The council is sponsoring the £2.5m upgrade to link the railway station to the new town centre. Plans include a bridge and improved entrances into Basing View. |
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TRANSACTIONS
Block A, The Crescent, Viables Industrial Estate: Offices. Alaris Medical Systems has taken 3,995m2 (43,000 sq ft) on a 15-year lease with a 10-year break at £151 per m2 (£14 per sq ft). Vail Williams acted for the landlord, Digital Equipment. Alaris represented itself. Block C, The Crescent, Viables Industrial Estate: Offices. Tetralink Telecommunications has taken 1,997m2 (21,500 sq ft) on a 15-year lease with no breaks at £151 per m2 (£14 per sq ft). Vail Williams acted for the landlord, Digital Equipment. Tetralink acted alone. Intec 4, Intec Business Park: Offices. WSP Graham has taken 1,951m2 (21,000 sq ft) on the ground and first floors at a quoting rent of £135 per m2 (£12.50 per sq ft) on a 10-year lease with a break at year five. Woodford & Co and DTZ Debenham Thorpe were joint agents for the landlord. Lambert Smith Hampton acted for WSP Graham. Sapphire House, The Quadrant, Hampshire International Business Park: Offices. Alberto Culver has bought the freehold of 2,415m2 (26,000 sq ft) for approximately £2m. Woodford & Co acted for developer Wilson Bowden Properties. London Clancy represented Alberto Culver. |
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Andover: retail rents take off
With zone A rents at about £646 per m2 (£60 per sq ft) and footfall up 10% in 1997, AXA Sun Life Properties’ 27,870m2 (300,000 sq ft) Chantry Centre is proving popular with retailers looking at Andover. A number of deals in 1997 supports this. McDonald’s has taken a 289m2 (3,115 sq ft) unit at 17-19 Chantry Way at £20,000 pa on a 15-year lease. St Quintin’s Simon Turpin says: “It already had A3 consent and we offered the right unit at the right time.” Smith Price and St Quintin acted for the landlord, while Hartnell Taylor Cook represented McDonald’s. Roseby’s Curtains has doubled the size of its existing unit at 27-29 Chantry Way to 184m2 (1,981 sq ft) and has taken a 15-year lease on the unit at £50,000 pa. Other new tenants include Bay Trading, Allsports and Thorntons. In the industrial market, Dreweatt Neate’s Robert Fennell says that larger companies have taken 929-4,645m2 (10,000-50,000 sq ft) units, leaving little space available in that range. Torca Great Britain’s relocation to a 3,159m2 (34,000 sq ft) site on Magellan Close, on Walworth Industrial Estate, is one of the largest deals in Andover over the past few months. Torca agreed a ground rent of £31,348 pa on a 125-year ground lease for close to £1m. Newton Scott and Weatherall Green & Smith acted for Bray Technologies. Stratfords Commercial represented Torca. New space will be available at a design-and-build scheme at The Fairground, 2 miles west of Andover. Warehouse and light industrial units, ranging from 994-4,645m2(10,700-50,000 sq ft), are now available. Dreweatt Neate and Alder King are joint agents. Other industrial deals include Hampshire Onyx taking a 975m2 (10,495 sq ft) unit on the 2.8ha (7 acre) Harewood Industrial Estate. A rent of £80,000 pa on a 25-year lease was achieved. The company is expected to occupy the premises next month. Dreweatt Neate acted for the landlord, Core Investments, and Hillier Parker represented Hampshire Onyx. |
