Commercial property in Reading
Office Space
As at January 2008, available stock for Greater Reading stood at 1.85m sq ft. The majority of ready-to-occupy offices is in out of town / motorway junction locations resulting in a real shortage of Grade A space in the town centre. As only 112,946 sq ft of Grade A space is available, speculative development has returned to the town centre.
PMB Holdings/Morley are nearing completion of The Blade (109,000 sq ft) and Kier/Invista are well underway on Phase One of their One Reading Central scheme (216,000 sq ft) part of which (153,000 sq ft) has been pre-let to Yell.
Out of town, Goodman International (formerly Arlington) reached practical completion during 2007 on the final phase of Arlington Business Park at Theale where three ‘Lakeside’ buildings of 30,660 sq ft, 33,900 sq ft and 45,600sq ft respectively, are now available.
SEGRO are committed to redevelopment of Winnersh Triangle where the initial phase is master planned as four buildings totalling 328,000 sq ft. At GreenPark PRUPIM is nearing completion of two further buildings of 40,000 sq ft each at 260 and 280 South Oak Way.
The majority of currently available Grade A space in Greater Reading is, in fact, contained in only nine buildings. The supply of Grade A accommodation in the town centre is likely to increase as refurbishments are completed and other churn sees the freeing up of some prime space.
Existing supply (March 08) 112,946 sq ft
The Blade 109,000 sq ft
One Reading Central (balance) 63,000 sq ft
Committed refurbishments 254,850 sq ft
Total 539,796 sq ft
In 2008 the imbalance in the town centre between supply and demand inevitably caused upward pressure on rents. However it remains to be seen how these will hold . In 2007 Davidson House rents peaked at £26 per sq ft, rents in Apex Plaza reached above £25.50 per sq ft.
Industrial
Supply
As of March 2008 there was over a million sq ft of warehouse/industrial buildings available in the greater Reading area.These vary from new developments making up approximately 13%, modern buildings 50% and the remainder being of older design and construction.
Take-Up and Rent
The adage ‘Size Matters’ can certainly be applied to the market where buildings up to 10,000 sq ft have been letting well, whereas larger units have proved to be more of a challenge. London and Cambridge Properties have completed Base 329, a new development of nine units in the popular Headley Road industrial area, ranging in size from 4,000 to 7,000 sq ft. Practical
completion took place late 2007 and 8 units were quickly let at £8.95 per sq ft and with an average six months rent free. Lease terms varied from 10 to 25 years with a mix of local and national companies including Wilts Electrical and Storage King.
Larger buildings are taking considerably longer to let but are beginning to meet with some success. Rentokil have taken 35,000 sq ft on a new 15 year term at £8.95 but with 12 months rent free at Reading Approach, a new development by Chancerygate/Norwich Union.
Rents on second hand units vary dramatically depending on specification, size and location. Buildings north of the town with limited access onto the motorway are achieving rents in the region of £6.50 per sq ft whilst those buildings south of the town and adjoining junction 11 are achieving in the region of £7.50 per sq ft.
The Future
The effects of the current recession are still filtering through, but the local market is robust and reasonably fluid and is set to resist the worst outcomes of the downturn.
Reading was placed sixth in the list of the most recession-proof towns in the UK as published in the Sunday Times (10/2/08). This objective assessment is encouraging and is in contrast to the media’s coverage of the credit crunch and predicted general economic slow down. The list was based on several factors including employment growth,wages and property. Whilst the industrial market is rent sensitive, it reflects this positive outlook as companies continue to look for ways to expand.
