26 focus on Reading The Crossrail effect
Following the Government's announced plans to extend London's Crossrail project to Reading, there has been talk of a subsequent property boom in the Berkshire town. But how likely is this to happen? Very, according to Nick Coote, Head of Lambert Smith Hampton's Thames Valley offices
... the commercial property market in particular is set to benefit from major improvements to the rail infrastructure ...
The £14.8 billion East-West London Crossrail line will take passengers direct to the City and Canary Wharf in just over an hour, with more frequency of trains, reducing journey times and passenger numbers.
The Government's recent announcement that it will be extending the line to two additional stations, Twyford and Reading, brings the total number of stations along the Crossrail route to 40 when the line fully opens in 2019.
According to head of Lambert Smith Hampton's Thames Valley offices Nick Coote, there can be no doubt that the introduction of Crossrail to Reading will have a positive effect on the local economy. But the commercial property market in particular is set to benefit from major improvements to the rail infrastructure, following the £850 million station redevelopment, electrification of the tracks to London and Western Rail Access to Heathrow all in the pipeline.
"The arrival of Crossrail is the 'cherry on top' of all the other rail infrastructure plans and announcements," says Coote.
'Investors and developers are positioning themselves for a changing and positive dynamic in the town ...'
"Reading already has the capability to deliver the urban environment needed to retain, attract and accommodate the creative talent sought by occupiers rather than seeing it migrate to London. But the rail infrastructure investment in Reading and the Thames Valley will bring new perspectives as journey times to London and Heathrow are slashed."
Office occupational costs in West London are currently 60% higher than Reading so it is believed the gap in price and the reduced travel times brought by Crossrail will stimulate a lot more interest in Reading from office occupiers, particularly in Reading's town centre.
"We're already seeing changes in the market as the Thames Valley staged a strong recovery in 2013 with office market take-up increasing by 64% in comparison with 2012, finishing the year on 2.32m sq ft - the most since 2007. This increase demonstrates the return of occupier- growth, rather than lease-event driven take-up to the market. Alongside this, the Reading market has also seen the return of speculative development. Three schemes (Forbury Place, Minerva House and at Green Park) totalling 345,000 sq ft are underway and two more (Kings House and Winnersh Triangle) should start before the end of the year.
"The earlier major office refurbishments at Phoenix and Reading Bridge have attracted
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – MAY 2014
occupiers seeking quality offices close to the station - as has One Reading Central, Reading town centre's largest ever office development. Another prime office, Aquis House (opposite the station) is under refurbishment, one floor has already been let while another is under offer.
"Investors and developers are positioning themselves for a changing and positive dynamic in the town and the value of investments transacted in the Thames Valley during Q1 2014 totalled £124.89m, which is a significant increase on Q1 2013 (£79.06m).
"On the residential property side, we're already seeing an influx in buyers moving to Reading from London, looking for more affordable housing; Crossrail will only make the area look more attractive and it wouldn't surprise me if more new homes were developed in and around Reading, with a focus on modern apartments for commuters. As a result of Crossrail, properties within walking distance of the main railway station are likely to increase in value substantially, particular those situated within the RG1 postcode.
"There can be no doubt that Crossrail will further improve not only Reading's economy but it's property market, in the lead-up to completion; so roll-on 2019."
Lambert Smith Hampton will further discuss the impact of electrification and rail infrastructure improvements on the local property market in its Thames Valley Office Market report to be released in June 2014.
Details: Nick Coote
ncoote@lsh.co.uk 0118-9606912
www.lsh.co.uk
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