Market snapshot

Thames Valley Office Market Pulse Q3 2013

Take-up of Thames Valley offices to the end of Q3 2013 totalled 1.9 million sq ft, higher than the total take-up for 2012. Office enquiry levels were also up 17% year-on-year to the end of the third quarter and office investment was significantly higher than at any quarter since 2007, with £461 million of transactions completing.

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In this issue:

Office deals up 41% on last year

•  Take-up of office space in the Thames Valley totalled 1.1m sq ft in Q3 2013, a significant increase on the 609,000 sq ft recorded in the same period last year.

•  This means that total take-up for 2013, to the end of Q3, is currently 1.879m sq ft. This is already higher than the total take-up for 2012 of 1.58m sq ft.

•  With enquiry levels up 17%, year-on-year, to the end of Q3 and take-up to the end of Q3 2013 totalling 1.879m sq ft (an increase of 41.7% on 2012) we are expecting full take-up to the end of 2013 to be circa 2.4m sq ft. This is a rise of over 50% on 2012 take-up levels and a significant increase on previous years. 

Thames Valley office transactions above 5,000 sq ft

 Property Size (sq ft)  Landlord(s)  Tenant  Lease information 
Southwood Campus, Blackwater Valley 305,100 Nokia BMW FH sale. Confidential sale terms, quoting £45 per sq ft.
HPH5, Heathrow 127,000 Melford Capital Rackspace 10 year lease. Pre-let terms not disclosed.
Stanza, Uxbridge 82,403 Rockspring Nexen Oil & Gas £32.50 per sq ft. 12 year lease.
Horizon, Maidenhead 26,600 CEG Hospira £22.50 per sq ft. 15 year lease, 10 year break.
HPH2, Heathrow 22,300  Melford Capital Rackspace £19.50 per sq ft. 10 year lease.
2 The Square, Stockley Park, Heathrow
14,345 Aviva Apple £27.50 per sq ft. 10 year lease, 5 year break.


Just 27% of Thames Valley office availability is Grade A

•  Total Thames Valley office supply at the end of Q3 2013 stands at 10.2m sq ft, down 12.4% on Q3 2012 where office supply totalled 1.44m sq ft.

•  Of this availability, only 27% is considered to be Grade A office stock. This Grade A stock is not evenly spread so there are now critical shortages in some locations, which is putting upward pressure on rents.

Thames Valley office investment in excess of any quarter since 2007

•   The value of investments transacted in the Thames Valley in Q3 2013 is higher than any quarter since 2007, with £461m of transactions completing.

•   While this includes the £245.1m acquisition of IQ Winnersh in a joint venture between Patrizia and Oaktree Capital, it brings the total investment over Q1 - Q3 2013 to £745.85m. This exceeds the investment volume for 2012, which saw £655m transacted. Interestingly, the 2013 volume is a result of 43 transactions to date compared to the 43 transactions seen for 2012.

•  With a further £125m under offer, and  £225m currently being marketed, the year is set to finish on a positive note.

Key Thames Valley office investment deals in Q3

•  Rockspring in a joint venture with Bell Hammer disposed of the speculatively developed Stanza building in Uxbridge town centre to NFU Mutual for £43.08m representing a net initial yield of 5.72%. The property was let for 12 years to Nexen Petroleum and the price paid reflected £550 per sq ft.

•  Royal London Asset Management has completed on the purchase of Capital Court in Uxbridge. The asset was purchased for £21.2m for the 93,570 sq ft multi-let office building, reflecting a net initial yield of 5.96%.

•  IM Properties has completed the disposal of Future House located in Staines. The property ,comprising just over 68,000 sq ft, has been let for a further 4.5 years to Future Electronics. LaSalle Investment Management paid £23.63m equating to a net initial yield of 7.54%.

•  As we go to press, Braywick Gate in Maidenhead, which was brought to the market at £16,300,000 and 6.65% NIY, is going through best bids with strong interest expected to drive the price up beyond the quoting terms.

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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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