Market snapshot

Office Market Pulse Chelmsford Q4 2014

The office market across Chelmsford and other major Essex towns saw improvement from mid-2014 and this is expected to continue into 2015 with encouraging signs that the office market should outperform 2014, with rent and freehold values increasing.

In this issue:

A lack of good quality space

  • A lack of grade A space has resulted in occupiers taking up good quality refurbished grade B offices, reducing available stock.
  • In Brentwood, total grade B availability totals 8,850 sq ft at the recently refurbished ground floor of Kingsgate adjacent to the station.
  • Basildon has experienced a number of deals under 10,000 sq ft and is now suffering with a lack of good quality sizeable offices being available to satisfy demand, with only secondary market stock providing units of up to 2,000 sq ft.
  • Of all the centres, Chelmsford has seen the most conversion of low grade buildings to residential. Carter House, Rivers House, Friars House and the Gemini Centre have seen the removal of nearly 100,000 sq ft of office space from the market with another 31,000 sq ft in the pipeline.

Rents are rising

  • Rents of £25 per sq ft are being quoted for the former Anglia Ruskin University site in Chelmsford, where 24,000 sq ft is available. Priory Place has been seeing rents of £23.50 per sq ft.
  • A pre-let at Phoenix Place in Basildon for 35,000 sq ft is being quoted at £18.50 per sq ft whilst rents for other refurbished offices are typically reaching £15 per sq ft. The freehold stock on Southfields Business Park has now been sold at prices achieving £125 per sq ft.
  • With close proximity to the M25, Brentwood is seeing lettings at Academy Place where 25,000 sq ft was let to three tenants at headline rents of £20 per sq ft.
  • In Harlow where there is a good supply of offices, rents are reaching £12 per sq ft and freehold values between £115 and £125 per sq ft.

Investment is rising in the regions

The latest edition of Lambert Smith Hampton’s UK Investment Transactions report reveals that investment in the UK regions increased by 41% to £21.1bn for the year as a whole – the second highest figure on record. This is primarily the result of the resurgence of UK institutional investors – which increased inflows by almost 30% in 2014 – buoyed by improving economic sentiment beyond the capital.

Download the full report here.

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Paul Bullock

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Paul Bullock
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01245 215502

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