Olivia Jones, associate in Savills’ national offices team, looks at the wider office market in Reading following Three’s decision to take 117,000 sq ft at Green Park.
Last year was one of the most challenging on record for take up in Reading – down 55 per cent on the 10-year average.
However, there are huge signs of optimism for the town’s office market especially with the news of Three’s commitment to Reading at Green Park.
The recent planning approval for Station Hill also brings a significant vote of confidence for the future of the office market.
In the town centre alone, there is currently more than 39,000 sq ft of space under offer or exchanged across nine deals, indicating signs of pent-up demand. This already represents 71 per cent of 2020’s town centre take up.
According to Savills’ data, there is more than 800,000 sq ft of lease events due in Reading in 2021. When this is combined with tenants who took temporary space or agreed short-term extensions last year, we are confident this depth of demand will translate into new lettings in 2021.
Three’s departure from the town centre could bring much needed supply of larger space to Reading town centre, which currently has very limited options for occupiers looking for space over 20,000 sq ft on a single floor.
Last year saw a notable drop off in deals from larger occupiers, although there was a number of well-known names undertaking initial searches and due diligence.
We expect larger occupiers and corporates to now be looking closely at their strategies and wider portfolios as the potential relaxing of restrictions approaches.
In many cases, as demonstrated by Three, we expect to see a new ‘hybrid’ approach to office occupation.
The recurring theme from our on-going conversations with occupiers is that the office is far from dead.
In fact, the third lockdown has only confirmed that working from home certainly does not suit everyone and businesses will need to form a strategy which takes this into consideration.
Of the nine deals currently under offer or exchanged, seven are on a ‘fitted’ basis. This is a theme which has only been accelerated by the impact of Covid-19, as occupiers look to reduce their initial capital expenditure.
Flexibility will also be important, particularly in the case of businesses looking to make space reductions in the short term as they navigate their way through a working world post-Covid.
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