Thames Valley Rising

The recent JLL research on the M4 western corridor office market reveals that office lettings in the first half of 2019 topped 1m sq ft – the third successive year that take-up volume has increased.

A large proportion of the moves agreed to summer 2019, came in west London, which accounted for 433,000 sq ft of deals. The rest of the Thames Valley accounted for 567,000 sq ft of office transactions. Reading was the most active market with 225,000 sq ft of take-up, followed by Basingstoke (130,000 sq ft) and Hammersmith. Virgin Media, Sanofi and Ericsson all moved to Reading in 2018. There were 70 medium/large office moves in the wider Thames corridor in the first 9 months of 2019.

Large deals signed included Sovereign Housing Association taking 65,000 sq ft in Basingstoke for a new HQ, Bottomline Technologies taking 58,000 sq ft in Reading and Li Fung agreeing a deal for a 50,000 sq ft move to White City, London, W12. There were smaller moves involving Gartner in Staines, GTT Communications, Eteach, MyWorkSpot and Orega. The technology, media and telecom (TMT) sector was the most active with 25% of space taken, while the serviced office sector was relatively subdued.

JLL also draw attention to the growing life sciences sector. The White City area has recently attracted office deals from Novartis, Autolus, GammaDelta and Synthace. Metropolis is tracking up to 20 confirmed and potential requirements in this sector.

Across the Thames Valley, Metropolis is speaking to nearly 900 office occupiers that have lease expiries approaching in west London, Surrey, Berkshire and Buckinghamshire in the next two years.

Just over 800,000 sq ft of speculative office space has been completed so far during 2019, but this compares to over 1.7m sq ft in previous years. In the first half of 2019, some 700,000 sq ft of office space went under construction, although much of this was in refurbishments. Mapletree is speculatively developing 400 and 450 Longwater Avenue, Green Park, Reading, both buildings will each comprise 114,000 sq ft. In addition, there are major refurbishments taking place at Arlington Business Park and Thames Valley Park.

Agents say that the shortage of ready-to-occupy new office space is restricting the number of large office moves in the Thames Valley and is leading to a rising number of pre-lets.

 

M4 Corridor take-up rising

Recent research by Savills reveals an active M4 corridor office market and in particular the Maidenhead area.

Maidenhead office take-up is 22% ahead of the same period in 2015 underlining strong office demand. For the year to date there has been over 68,000 sq ft of office deals transacted in Maidenhead with a further 19,000 sq ft under offer.

Above average demand has led to new record office rents being achieved in Maidenhead town centre. Blackberry and McAllister Olivarius recently both paid a rent of £37.50 per sq ft at the Pearce Building, taking 16,000 sq ft and 5,000 sq ft respectively.

Agents say that most occupiers are looking at grade A (new or recently refurbished space). Over the last five years the grade A take-up proportion has been 80%.

Major movers this year include Alnylam taking 21,000 sq ft at Braywick Gate and Informatica leasing 18,000 sq ft at Building 4, Foundation Park. Rank are also in talks to take 40,000 sq ft at Blackrock’s Tor in the town centre.

Metropolis is monitoring around 50 requirements and potential requirements in the M4 corridor from Slough to Reading including Maidenhead.

There is currently 77,000 sq ft under construction in two buildings in Maidenhead. Clearbell Capital is refurbishing 55,000 sq ft of offices at Voyager Place and Mavern Capital is refurbishing 22,000 sq ft at Aurora, Vanwall Business Park.