Total enquiries for offices over 5,000 sq. ft in Q3 2018 were 100, comparable with the total of 102 in Q3 2017, but slightly more than the total of 90 from Q2 2018.

Smaller enquiries for space between 2,500 and 5,000 sq. ft in Q3 2018 totalled 72 compared to 88 in Q2 2018 and 74 in Q1 2018.

 

Take up in the Thames Valley office market over 5,000 sq. ft in Q3 totalled 508,540 sq. ft, compared with 300,675 sq. ft in same quarter last year, showing a comparative increase of 69% between the two quarters. The Q3 total was also considerably more than the previous Q2 2018 which stood at 342,022 sq ft.

Total take up for the first 9 months of 2018 is 1,208,342 sq. ft compared with 1,250,281 at the same point in 2017. This shows a comparative fall of just 3%, so the market seems quite steady.

70% of total take up was grade A stock in Q3 2018 compared to 78% in Q1 and 65% in Q2 2018. The most active sectors were Pharmaceuticals 25%, TMT 17%, Finance & Banking 12% and Serviced Offices 8% 

There was 81,238 sq ft of take up in the 2,500/5,000 sq. ft range which we have started tracking from Q1 2018 (73,106 sq. ft) and Q2 2018 (62,000 sq. ft).

 

Property	Size (sq ft)	Grade	Tenant	Landlord	Rent/Price	Lease/Freehold
25 Windsor Road SLOUGH	111,000	A	Slough Borough Council	LRE Capital/XLB	Confidential	Freehold sale
Four10, Thames Valley Park READING	71,400	A	Sanofi	Royal London	Confidential	Confidential
2 Forbury Place READING	45,478	A	KPMG	M&G	Confidential	15 years
Belmont UXBRIDGE	26,333	A	Orega	Aviva	£32.00	10 years
Market House MAIDENHEAD	25,446	A	Seqirus	Shepherds Developments	£31.50	7 years
4 Longwalk, STOCKLEY PARK	25,128	A	IMG	Aberdeen	£38.50	9 years
The Porter Building SLOUGH	22,099	A	Orange Business Services	Spelthorne Council	£36.00	10 years
The Switch SLOUGH	20,000	B	Orega	LaSalle	Confidential	Confidential
2nd Floor, 5 Pine Trees STAINES	15,500	A	Hitachi Capital	Runnymede Borough Council	£34.00	10 years
141 Park Drive, Milton Park	14,000	A	Wave Optics	MEPC	£30.50	Confidential

Total office supply in the Thames Valley now stands at 7.57m sq ft, a fall of 9% since Q3 2017.

46% of current supply is grade A stock compared to 53% at the end of Q3 last year.

There is an increasing need for new development/refurbishment projects to feed the supply chain in 2019/20.

 

The value of investments transacted in the Thames Valley during Q3 2018 totalled £484m, which is a significant increase on Q2 2018 (£248m). This strong performance is a result of portfolio activity and larger lot sizes being transacted.

There is a further £38m currently under offer. This coupled with the £115m of office stock currently available to buy, which has largely come on line since the start of September indicate that Q4 will finish the year with positive transactional volumes.  

Western Corridor Portfolio

Spelthorne Council purchased the portfolio from a JV between Brockton Capital and Landid. The portfolio consisted on 3 buildings; Thames Tower, Reading , The Charter Building, Uxbridge and The Porter Building, Slough for £285m, reflecting a 6.14% net initial yield.

Microsoft HQ, Reading

The Valesco Group together with AIP Asset Management have exchanged contracts to buy the Microsoft’s UK HQ campus in Reading for £100m, reflecting a net initial yield of 6.6%. the 144,660 sq ft campus has an expired term of 8 years.

Strata, Staines

M&G has purchased Strata for £46.5m, reflecting a yield of 6%. The building was 88% let to two tenants with a WAULT of 7 years to breaks and 8.2 years until expiry.