40 property
Demand for prime office space is strong Ageas deal biggest
in five years
Tenant demand for office space from professional and financial services occupiers is showing signs of growth across UK regional cities, according to CBRE.
Despite the UK’s return to recession in the first half of the year, CBRE’s regional offices’ Marketview reveals that this improvement is due to a diminishing supply of available prime space, as well as a significant number of occupiers facing lease expiration in 2014-15, and who are beginning to consider alternative office accommodation as a result.
The south coast has seen one of the strongest starts in many years with a total take up in the first half of 119,978 sq ft. However, this is tempered by the fact that almost 75% was Ageas Insurance’s acquisition of Portswood House in Chandlers Ford. Other transactions during the first half were relatively limited and enquiries continue to be driven by near term lease expiry rather than expansion. Occupiers are therefore taking the decision to renegotiate their leases on improved terms and remain in their existing space rather than relocate.
Available stock across the south has edged up during the first six months to 672,945 sq ft, with secondhand space continuing to dominate. There remains a severe lack of debt funding to support speculative development, and as a
result there are only seven grade A buildings that have more than 20,000 sq ft of available space.
The UK’s development pipeline over the next three years will deliver 0.4 million sq ft per annum, 20% of the annual average since 2000 of 1.8m sq ft and there are currently no projects set for short-term completion across the M27 corridor, Southampton or Portsmouth.
Looking further ahead, Development Securities and Cumberland Commercial’s schemes which combined will bring in excess of 210,000 sq ft of premium office space will be predicated on pre-lets at a substantially higher level than existing rents. In order for construction of these buildings to commence, it is likely that rents would have to be in the region of £23.50 per sq ft, a 30% increase on current levels.
James Brounger, managing director, CBRE south central, commented: “Whilst the market remains constrained by the state of the economy there is considerable opportunity for occupiers to improve their position but, as good quality space dries up, we anticipate landlords will take a stronger stance.
“In common with some of our other regional offices, Southampton benefited from a sizeable transaction driven principally by pent-up occupier demand for the best quality space.“
More take up for 1000 Lakeside
Port Solent continues to thrive
A car transport specialist is the latest business to move to purpose-built offices at Port Solent. In a deal through regional commercial property agency Hughes Ellard, Southern Counties Car Deliveries has signed an initial two-year lease on an upper deck office at 27 The Slipway. Southern Counties Car Deliveries, which employs around 30 people, delivers vehicles across the UK for clients, ranging from car dealerships and corporates to individuals.
Performance improvement company Douglas Stafford is expanding at Highcross’ 1000 Lakeside office building in Portsmouth.
The company has taken 7,322 sq ft on the second floor on a 10-year lease, moving from smaller office suites on the ground floor to the open-plan accommodation in the east wing.
Douglas Stafford, which works with businesses on improving client satisfaction, originally moved to 1000 Lakeside in early 2009 and has since taken on additional ground floor space.
www.businessmag.co.uk
1000 Lakeside is located on the Lakeside North Harbour business park, adjacent to junction 12 of the M27, and provides high- specification office space and wide-ranging facilities including an on-site cafe, meeting rooms, extensive parking and a complementary shuttle bus service. Occupiers include Capita, Hippowaste, The Southern Co-operative, Babcock and a Regus business centre.
Vail Williams and Hughes Ellard are agents for Highcross at 1000 Lakeside.
Owned and operated by Premier Marinas, Port Solent is the third largest marina in England with 808 berths. It is now home to a number of professional services, marketing and media firms, human resources specialists and a flourishing range of marine-related businesses.
Business occupiers included Sunsail, Marine Superstore, Ancasta International Boat Sales, Martin Leaning and Marine Electrical Installations.
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – SEPTEMBER 2012
The largest office occupier transaction in Hampshire and Southampton since 2007 was agreed by insurance company Ageas for B&Q’s former headquarters.
Ageas, sponsor of Hampshire County Cricket Club’s home, the Ageas Bowl, advised by Bond Pearce real estate team Ian Dunn and Andrew Harding, acquired the vacant 87,308 sq ft Portswood House on Hampshire Corporate Park at Chandler’s Ford for its own occupation.
The occupier deal is the largest since cruise operator Carnival signed a pre-let for 150,000 sq ft at 100 Harbour Parade five years ago. Bond Pearce also acted on that transaction.
Bond Pearce also advised the University of Southampton on the deal to bring Lloyd’s Register to a new purpose-built office and research facility on its Boldrewood campus, which is currently under construction. At 120,000 sq ft, that deal rivals these as a major occupier transaction.
Head of real estate at Bond Pearce, Tim Burbidge, based at the firm’s Southampton office, said: “Bond Pearce nurtures strong links with the business communities where its offices are established and it is especially rewarding to contribute to these important business investments in the Southampton area.“
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