In our latest anonymous Below the Surface section, Thames Tap’s occasional columnist the Secret Agent has strong words for the way Basingstoke’s office market has been allowed to drift – and has no doubt where the blame lies.
In 2016 work commenced on the first new speculative office development in Basingstoke to have been undertaken for 15 years.
Abstract Securities had convinced Basingstoke & Deane Borough Council to sell them the ‘virtual’ freehold of a site for a new 60,000 sq ft office building with more than 200 parking spaces to be known as The Florence Building.
Occupier interest was strong and, on completion, the entire building was let to Sovereign Housing Association with a back-to-back onward sale of the investment to L&G at a reported yield of 4.5 per cent. Proof (if it were needed) that there is strong occupier and investor demand for the right product in the town.
This deal was supposed to have been the catalyst for a flurry of similar new office developments to transform the out-of-date stock of Basingstoke’s ‘in-town’ business park, Basing View, transforming it into a location that would appeal to new companies, wishing to enjoy the many benefits the town offers, including a highly skilled, technology-focussed, local work force and a good train service, not only to Central London but to more than 90 other national locations.
Sadly, due to the suffocating stranglehold of Basingstoke & Deane Borough Council, which holds the freeholds of all developable plots at Basing View, The Florence Building was to be the last speculative new development in the town, possibly for another 15 years.
Whilst it is acknowledged that the council were able to engineer a letting of the 45,000 sq ft Sienna building to long term Basingstoke occupier Eli Lilly, thereby protecting local jobs by not having encouraged further speculative development, many more jobs have been forced out of the borough and many more are under threat, due to the current lack of Grade A stock in the Hampshire town.
Basingstoke has, for a long time, suffered an image issue. For as long as can be remembered it has been regarded as an also-ran in the hierarchy of Western Corridor office locations due to the overhang of outdated office stock.
Companies which may otherwise have relocated to the town to benefit from its excellent retail facilities and transport connections, have been forced to look elsewhere, given the lack of Grade A office stock.
Its town centre has become a museum of offices, where designs that first saw the light of day in the late 1960s/early 1970s are being ‘tarted up’ in order to satisfy what little occupier demand remains.
Current examples include Mountbatten House and Grosvenor House which together with Fanum House, home to the AA, should have been comprehensively redeveloped long ago.
Imagine for one moment, what the town could look like if the council didn’t control the supply of offices with the same iron fist it currently wields. Is there any credible reason why Basingstoke wouldn’t have witnessed the same level of inward investment that local towns such as Reading or Woking have seen over the past 15 years, resulting in vibrant, forward- looking locations rather than the apology of an office location that it has become?
Is there any reason why schemes such as The Forbury Estate and Station Hill in Reading or Space in Woking wouldn’t have been just as economically feasible in Basingstoke, were it not for the council’s Soviet-style approach?
How is this approach serving the people of the town and its environs? The council would argue that by controlling the stock and receiving ground rents, it is helping to fund local services.
However, think how much more the council could achieve by opening-up the market and selling sites to developers who would then be able to develop the energy efficient, Grade A stock that today’s occupiers seek, resulting in a significant uplift in revenue generated from business rates.
Think how much more the council could achieve if it boasted a list of office occupiers that read like a Who’s Who of corporate occupiers, rather than an ever-decreasing list of companies who are just holding-on, awaiting the opportunity to escape?
And what effect is this having on rental growth in the town? Achieved office rents are currently languishing in the low-mid £20s per sq ft whilst in competing towns, achievable rents are; £39.50 per sq ft in Reading, £37 per sq ft in Woking and £45 per sq ft in Windsor.
The time has surely come for a new approach. Questions should be asked about whether a local council’s outdated policies, devised in the last Century are still fit for purpose?
The ageing members of the council, happy with the status quo, should be replaced by economically competent members who embrace market economics and thereby facilitate and encourage wholesale redevelopment to bring Basingstoke firmly into the 21st Century rather than actively allowing it to languish in the last Century as it currently does.
Opinions in this column are those of individual contributors and not those of UK Property Forums. If you are involved in the property world and wish to contribute an anonymous article, contact Alan Bunce at alan@ukpropertyforums.com.
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