Occupiers with surplus space are on the increase in Reading’s office market, according to a new report on the Thames Valley.
Rare Commercial Property has just published a report covering 11 towns in the region and notes increasing amounts of ‘grey’ space in Reading where Bayer is leading the way with 80,000 sq ft it wants to shift at its Green Park base.
The report also highlights buildings being vacated after expensive fit outs, notably Bottomline Technologies at Hive 3 at Arlington Business Park at Theale.
The Rare report notes:
- In Reading, prime office rents are now £39.50 per sq ft and forecasts they could reach £41 next year and £43 in 2024.
- Some occupiers in Basingstoke are seeking to shift surplus Grade A space at significantly lower rents than the current prime figure of mid-£20 per sq ft although the Mountbatten House refurbishment could boost that market.
- Bracknell has been severely impacted by homeworking but offers good value in rental terms and benefits from having The Lexicon.
- Total take-up in Maidenhead will struggle to reach 100,000 sq ft this year and incentives will be needed to shift some of the five years’ worth of available stock.
- The report predicts falling prime rents in Slough where it reports ‘no lettings of note this year’ while even successful buildings are shedding space.
- Two major deals have seen Windsor achieve some of the region’s highest rents at £43 and £45 per sq ft and raised the town’s desirability.
- Fast-rising rents in Oxford could still be overtaken by the rocketing demand for lab space.
- Uxbridge’s desirability is suffering from the ‘down-at-heel’ feel of the town centre.
- Proximity to Heathrow is no longer the draw it once was for Stockley Park, due to the ease of video calls.
- Guildford is becoming a hub for the gaming industry occupiers and rents are forecast to reflect its popularity.
Despite the varying rises and falls across the region’s major towns and cities, the report sees a generally positive trend but Rare managing director Jonathan Mannings had a warning for next year.
He said: “At the end of every year we always think things will improve in the New Year and often that has been the case.
“Next year I’m not so sure it will be a given. I think we are heading into an even more difficult market and, unless landlords start thinking much more proactively about how they can attract more customers, we will witness significantly longer voids.
“Landlords, together with their agents, need to be much more attuned to creating a better customer experiences to achieve success.
“It’s no longer enough for an agent just to turn up to a viewing – effectively being a human key. They have really got to think about who the customer is, what their key drivers are and how a deal can be tailored to meet their business need.
“We are increasingly acting as consultants to landlords who struggle in this area and who need our help and guidance as to how they can up their game to ensure a greater conversion rate from enquiries to lettings.”
© Thames Tap (powered by ukpropertyforums.com).
Sign up to receive your free weekly Thames Tap journal here.
The office market can be complex as companies horizons alter – Bottom Line were acquired by Thoma Bravo recently which values the business at circa $2.6 billion, leaving / altering space can form part of business progression. Some offices might appear underused when the tenant company occupying is adopting varied and flexed week working and are quite comfortable with their lot, We have a client example of this at Winnersh Fields, Winnersh Triangle.
So, taking spot examples around the Thames Valley to say “tough times ahead” may be misleading. On the other hand as the main agents and surveyors in Windsor where the highest Thames Valley rents have been achieved, we might be walking with a false sense of importance. Markets experience cycles.
I tell you what though, The Elizabeth Line is making a real difference, We forecast an expanded London and counter commuting. It’s so quick to get up to central London and back now you don’t even have time to finish reading your news paper. Cross word. Maybe. Expert advice should always be taken.