Market snapshot

Thames Valley Office Market Pulse Q2 2013

Take-up of Thames Valley offices significantly increased in Q2 2013 to 470,342 sq ft from the 254,150 sq ft recorded in Q2 2012. Office enquiry levels were also up 23% year-on-year in the region. Thames Valley office investment remained strong this quarter totalling £187m, a sharp rise on the £79m recorded in Q1 2013. 

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In this issue:

Office enquiries up 23% on last year

•  Take-up of office space in the Thames Valley totaled 470,342 sq ft in Q2 2013, a significant increase on the 254,150 sq ft recorded in the same period last year.

•  With enquiry levels up 23% year-on -year to the end of Q2 and take-up to the end of Q2 2013 totaling 864,147 sq ft (an increase of 36% on 2012) LSH are reporting an optimistic outlook for the rest of the year.

Thames Valley office transactions above 5,000 sq ft

 Property Size (sq ft)  Landlord(s)  Tenant  Lease information 
Lakeview, Blackwater Valley 40,000  SEGRO BTG £16.25 per sq ft, 10 year lease
1 Meadowgate Avenue, Blackwater Valley 37,795 Harbert Management Corporation TAG £170 per sq ft, FH sale
E2 IQ Winnersh, Reading 36,597 SEGRO BMC Software £26 per sq ft, 10 year lease
One Reading Central, Reading 22,584 SWIP & Kier PWC £30 per sq ft, 10 year lease
Gallions, Wexham Springs, Slough 22,143  Mountgrange Ltd Otsuka Pharmaceuticals £22.50 per sq ft, 10 year lease
Orbis 1, Staines 21,918 Istithmar P&O Estates Centrica 9 year lease. Fully fitted transaction.

To view the full table, please click here

Just 28% of Thames Valley office availability is grade A

•  Total Thames Valley office supply at the end of Q2 2013 stands at 11.08m sq ft, a decrease of 580,000 sq ft (5%) on Q2 2012.

•  Of this availability, only 28% is considered to be grade A office stock.

Thames Valley office investment increases in Q2 2013

•  The total value of office investment in the Thames Valley in Q2 2013 was £187m, a significant increase on the £79m totaled in Q1 2013. At present a further £177m is under contract. These figures do not include the IQ Winnersh sale, which is currently under offer to a joint venture between Tamar and Oaktree Capital.

Key Thames Valley office investment deals in Q2 2013

•  IVG disposed of the Alpha and Beta buildings in Reading town centre to Scottish Widows for £21.7m, representing a net initial yield of 12%. The property was let for three more years with the sale price equating to £240 per sq ft.

•  Goodman has sold the British Gas headquarters located on Oxford Business Park. The property, just over 81,000 sq ft, has been let to British Gas for 17 years. Charles Street Buildings Group paid £29.1m, equating to a net initial yield of 5.95%.

•  AXA have disposed of Eton House in Maidenhead Office Park. The 67,000 sq ft building is let to Avaya for a further seven years, although the tenant is not in occupation. A joint venture between Apollo Real Estate and M&M Capital paid £16m, which equates to an initial yield in excess of 10.5%.

•  A joint venture between Europa and Cordatus acquired 2 Roundwood Avenue at Stockley Park from Ignis for £18.25m. The 93,570 sq ft, multi-let office building requires refurbishment and has short term income. The price paid reflects a gross capital value of approximately £200 per sq ft and a yield of 12.8%.

Office investment opportunities in Q3

•  Orchard Street has brought Capital Court in Uxbridge town centre to the market. The 58,853 sq ft scheme, situated on an island site is let to three tenants including Manpower Group and IBB Solicitors Ltd with an AWULT of 8.8 years and a low average passing rent of £23.68 per sq ft. The quoting price is £18.721m, equating to a net initial yield of 6.75%.

•  Future House, Staines, has also been brought to the market. The 68,239 sq ft landmark headquarters building is let to Future Electronics Ltd for a further 4.5 years. The quoting price is £21m, equating to a net initial yield of 8.5%.

•  For more information about investment in the Thames Valley, please contact Nick Lloyd.

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Nicholas Coote

0118 960 6912

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Nicholas Coote
Head of Thames Valley

0118 960 6912

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