Reading’s office market is in decline with investors and corporate occupiers passing it by, delegates heard at the latest BerksProp Summit.

Michael Garvey MBE, managing director of Wycombe-based commercial property consultant Chandler Garvey (pictured second left), told guests at a breakfast briefing at the start of the October 8 conference he has worked in Reading for 20 years but suggested the formerly-prized properties, built in the 1980s, 1990s and 2000s, are now a liability.

That, he said, has eroded the town’s competitive edge, leaving its office market split between a handful of trophy assets and stranded secondary offices, which are now obsolete.

The meeting at One Station Hill was, he said, in one of those trophy assets.

He told delegates: “In short, demand is expanding but it is concentrating. That is a classic hallmark of a mature form of declining market. The secondary stock is functionally obsolete.

“Reading’s success of the late 80’s the 1990s and 2000s was built on large mid-spec offices campuses and parks – those assets are now a liability.

“Hybrid working and sustainability regulations have rendered much of Reading’s older office stock non-compliant, energy inefficient and commercially unattractive.”

Demolition, he said, is now the rational economic choice for old stock since repurposing costs has risen so much.

Reading’s once distinctive office parks are now relics of older working practises and aren’t the future modern workspace.

He went on: “I’m proposing that Reading’s competitive edge has eroded. The historic appeal of Reading lay in its connectivity, cost advantage and critical mass of corporate occupiers. Each of these has been weakened though.

“Prime office rents are now close to £60 per sq ft approaching London suburb levels. The ‘London quality for less’ argument no longer holds true.”

He argued that even where occupancy continues, much of it accommodates hybrid working, leaving large amounts underutilised.

He said: “The town now occupies an uncomfortable middle ground. Too expensive to be a cheap alternative, yet not distinctive enough to compete with true urban hubs or innovation hubs like Oxford or Cambridge.”

He believes investor sentiment is weakening and Reading’s key buildings are no longer trophy investment assets.

Investors, he said, prefer life-science led clusters like Oxford or Cambridge or mixed-use regeneration schemes in regional cities such as in Bristol, Manchester or Birmingham.

He summed up: “Reading is not yet derelict but it’s over the hill, past its zenith, living on legacy reputation and facing an urgent need to reinvent itself for post office, post pandemic economy.”

However, the Reading market has experienced two stellar years of lettings, according to Vail Williams partner Guy Parkes (pictured right).

Statistics showed Berkshire is productive, pays high salaries, has a high concentration of businesses and has high levels of skills.

He said: “The Global Combat Air Programme is coming to Reading and they’re bringing 2,000-3,000 people. They specifically came here because of the skills that they needed.”

Dan Channer, managing director of Haslams Estate Agent (pictured left), said a ‘normal market’ is, once more, operating in residential letting, following Covid.

Despite ONS figures which suggest rents are rising at seven per cent, Haslams reports annual rent increases are around two to three per cent, around the same as pre-2020.

And revealed that 2024 was Haslams best ever year for sales.

But he had a warning: “The thing that’s driven the market in the last 10 years is the IT and telecoms industry and we are just seeing, for the first time, indications of hiring freezes. That (industry) had massively underpinned prices.

“We are still going to keep on getting stuff sold under offer but it’s something to watch.”

Image (l-r) shows Dan Channer, Michael Garvey and Guy Parkes.

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