Despite a reputation as the strongest of the M25’s office markets, the small number of recent deals highlights the area’s own struggle against the impact of recession. Tony Ashton reports.
The strong pull of the M4 Thames Valley market and Heathrow may have helped to lessen the impact of the current downturn, but they have not saved these markets from the spectre of sliding rents and a paucity of transactions.
At Brixton Estate’s 250,000-sq ft Causeway Estate by junction 13 near Staines, Rogers Chapman has let 10,600 sq ft of air-conditioned space to Acuma for £18 per sq ft. This is a far cry from the record-breaking £33 per sq ft achieved just 18 months ago on the IBM and United Biscuits deals at the nearby Watermans scheme, which is closer to the centre of Staines.
The 7,350-sq ft Finch House is the last building available here and is on offer at £28 per sq ft through Richard Ellis, Strutt & Parker and Croft & Co. In the town itself, McKay Securities’ 20,000-sq ft Mallard Court is available through Rogers Chapman and Hodgson & Co at £28.50 per sq ft.
BUPA is seeking to assign its lease through Lambert Smith Hampton on Thameside House and Gill House at £24.50 per sq ft and £17.50 per sq ft respectively.
Sony is a major occupier in this Thames-side town, and it may cause further problems for the market if the electronics company transfers operations to its proposed designand-build operation at Brooklands business park near Weybridge.
At Heathrow, British Airports Authority’s subsidiary, Lynton, has announced a substantial 200,000-sq ft prelet to British Airways at a reported £26 per sq ft, based on a 25-year institutional lease with fiveyear reviews.
The three-storey building, designed by Nicholas Grimshaw & Partners, will stand on 10 acres between Bath Road and the Northern Perimeter Road.
On Bath Road itself, there have been a number of encouraging small deals. Orbit’s Heathrow Boulevard continues its steady progress and is now 95% let. Perot Systems has taken 8,000 sq ft at £25 per sq ft, while Swilynn Distribution UK has moved into 3,500 sq ft on the top floor at £28.50 per sq ft.
Joint agents for the scheme are Jones Lang Wootton, Rogers Chapman and Knight Frank & Rutley.
At Capital Place, Rogers Chapman and Driver Jonas have let the 9,500-sq ft top floor to Aviation Defence International at close to the quoted rent of £25 per sq ft. Richard Ellis reports that it has secured the letting of a 6,45O-sq ft floor in Beazer’s Quartet scheme to Everex (UK) at a rent of £17 per sq ft rising to £22 over a period of five years.
On Bath Road, Slough, there have been no lettings of any substance since the 34,000-sq ft prelet to Legent Computers of part of Capital & Counties’ St Martins Place at a rent believed to be about £20 per sq ft. Joint agents were Connell Wilson and Vail Williams.
Mike Field of LSH now believes that prime office rents are well below £20 per sq ft and could drop to below £15 per sq ft by the new year. This is strong stuff, but with the volume of unlet space nudging 1m sq ft – and notwithstanding a fairly good letting figure of 105,000 sq ft for the second quarter of 1992 – it is not easy to make a case against his projection.
In Maidenhead, Cliff Jackson of LSH reports that there has been 220,000 sq ft let in 15 transactions so far this year and, more recently, LSH has let the 10,000-sq ft refurbished Westpac House to Wyeth Laboratories at a headline rent of £20 per sq ft.
The firm is also joint letting agent with Strutt & Parker for Lovell Developments’ 32,500-sq ft Arena Court, which is on offer at £24.75 per sq ft. Weatherall Green & Smith and Hillier Parker are seeking £20 per sq ft for the 34,000-sq ft Kings Chase scheme in the town centre. Rents for prime property in the town are thought to hover at between £19 and £20 per sq ft.
At Uxbridge, Burton Property Trust has replaced JLW and Outram Tribe with Healey & Baker and Clive Lewis as joint letting agents for the Quays scheme overlooking the River Colne. BPT is still seeking £28 per sq ft for this 88,000-sq ft building.
Next to Uxbridge LRT station, Eagle Star has reduced the asking price of Harman House’s remaining 80,000 sq ft to £22.50 per sq ft. About a year ago Coopers & Lybrand Deloitte and Fluor Daniel took new leases at approximately £27.50 per sq ft. Eagle Star is now refurbishing the interior of the building. Otherwise, no recent transactions of any size in the town have been reported. Current headline rents are believed to stand at £20 to £21 per sq ft.
In Denham, Grosvenor Square Properties has successfully let a 21,000-sq ft unit on its Denham Lock scheme to Tupperware through agent JLW. The rent achieved was £20 per sq ft for a very high-specification property with air-conditioning and one parking space per 225 sq ft. Other deals are rumoured to be in solicitors’ hands.
Overall, after false dawns at the start of the year and the General Election, demand seems to have sunk to a new low, with marked reductions in rents failing to stimulate sustainable improvement.
