Market snapshot

Thames Valley Office Market Pulse Q1 2013

Take-up of Thames Valley offices increased slightly to 393,805 sq ft in Q1, compared to the 381,120 sq ft recorded in Q1 2012. A sharp rise in enquiry levels in Q1 is a positive indicator for activity next quarter. Investment activity in the region remains strong, with Q1 2013 levels on a par with those recorded in Q1 2012.

You can download a PDF version of this Thames Valley Office Market Pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here.

In this issue:

Thames Valley office enquiry levels rise by 39%

  • Take-up of office space in the Thames Valley totalled 393,805 sq ft in Q1 2013, a slight increase on the 381,120 sq ft recorded in the same period last year.
  • This is the positive start to the year that was anticipated, and we expect Q2 take-up levels to show improvement again. This is on account of the overhang of transactions from Q1 that missed the dateline. 
  • A further positive early indicator is seen in enquiry levels, which increased by 39% to 130 in Q1. This is against a tone of between 90 and 95 per quarter in 2012.

Thames Valley office transactions above 5,000 sq ft

 Property Size (sq ft)  Landlord(s)  Tenant  Lease information 
2 New Square, Bedfont Lakes, Heathrow 135,000  Scottish Widows Investment Partnership  BP  Confidential terms 
Thames House, Maidenhead  33,688  Standard Life Investments  I3 Research  10 year lease. Agreement to lease with delayed completion to June 2013. 
400 & 410 Frimley Business Park  25,130  Investream  NACCO Handling  Confidential terms 
5 Arlington Square, Bracknell  24,085  Paratus AMC  Lloyds Register  £19 per sq ft, 5 year lease 
Castle View Court, Slough  14,663  Neville & Griffin Ltd  Confidential  Sold to owner/occupier on confidential terms. 
De Boves House, Reading  14,486  Receivers  Private educational/religious occupier  Freehold sale for religious D1 use 
The Curve, Axis Two, Langley  13,581  Brookhouse Capital  Computer 2000  10 year lease, confidential terms 

29% of Thames Valley office availability is grade A

  • Total Thames Valley office supply at the end of Q1 2013 stands at 11.46m sq ft (Q1 2012: 12.2m sq ft).
  • Of this availability, only 29% is considered to be grade A office stock.
  • To see a breakdown of Thames Valley office supply by location and grade, click here.

Thames Valley office investment on a par with Q1 2012

  • Thames Valley office investment totalled £79.06m in Q1 2013, which is in line with the £75.97m recorded in Q1 2012.
  • We anticipate a strong start to Q2, with £201.29m currently under contract. These transactions under offer comprise 14 key deals with an average lot size of above £14m.
  • This increased office investment activity has led to a shortage in office stock, with a little over £150m of office property being marketed across the Thames Valley. This is considerably down on the same time last year, when more than £320m of assets were available.

Key Thames Valley office investment deals in Q1 2013

  • Threadneedle disposed of Harman House (129,831 sq ft), Uxbridge, to Mercer Real Estate Partners for £17.26m. The sale represented a net initial yield of 9.36%. It is multi-let with an average weighted unexpired lease term (AWULT) of under three years, with the sale price equating to £133 per sq ft.
  • Wrenbridge completed its purchase of Reading Bridge (113,947 sq ft) from Nationwide. The multi-let office building in Reading sold for £10.8m, reflecting a yield in excess of 10.2%. The property was circa 50% vacant, with the sale price reflecting a gross capital value of £100 per sq ft.

Office investment opportunities in Q2

  • Goodman has brought British Gas’ Oxford office headquarters to the market. The 81,000 sq ft scheme completed in January 2013 and is let to British Gas for 17 years. The quoting price is £28.876m, equating to a net initial yield of 6%.
  • Watchmoor Park, Camberley, has also been brought to the market by Vantage Asset Management. The seven building scheme totals 183,388 sq ft, and is multi-let to tenants including Unisys, Telindus and ACS Business Process Solutions, with an AWULT of circa three years. The quoting price is £12.5m, equating to a net initial yield of 13.71% and a capital value of £68 per sq ft.
  • For more information about investment in the Thames Valley, please contact Nick Lloyd.

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Nick Coote, Thames Valley, Reading, Office agency
Nicholas Coote

0118 960 6912

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Nicholas Coote
Head of Thames Valley

0118 960 6912

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