16 focus on portsmouth
Positive trends in the Solent commercial property market, but is it enough?
The Solent region has seen an improvement in market confidence, activity and take-up of commercial property since autumn last year. This is evidenced by significant commercial lettings in the market, says Philip Holmes, associate in the business space team at Vail Williams LLP
The major activity has been in the industrial and logistics sector where there have been major lettings to DHL in Eastleigh, to Citylink in Fareham , to SMEG in Portsmouth and to Tallent Automotive in Segensworth.
Although it is excellent news for the region to see these major lettings, the development market has yet to catch up and there is now a lack of existing warehouse stock over 20,000 sq ft which is stifling further market activity.
Commercial developers with commercial land holdings are hesitant about committing to speculative build due to a lack of confidence in the market. Their main focus is pre- letting deals and this shortage of existing stock means this is the only option for many large businesses that need to expand. This requires a commitment from an occupier for a building that may take as much as a year to be completed – a long time in what remains a volatile market.
Although it is excellent news for the region to see these major lettings, the development market has yet to catch up ...
But, as a result of the improvement in the market activity, we are starting to see more enthusiasm from developers to commit to building on a speculative basis. We are certain the first developer to make the commitment will be ahead of the curve and will be rewarded with a letting before completion.
Voyager Park South in Hilsea is a key industrial development site where the developers Roxhill and SEGRO is looking for occupiers who want to buy or lease new build warehouse or industrial buildings.
Not only has the industrial market seen resurgence but the office market is now also showing clear signs of recovery.
One of the success stories in the market is Lakeside North Harbour, a site of 101 acres which was purchased from IBM by property fund manager, Highcross in 2005.
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centre which also includes a Starbucks, Co-op Convenience Store, Children’s Nursery and the future construction of a DeVere Hotel.
Further movement in the market has been created by the recent introduction of temporary planning legislation to relax permitted development rights which has simplified the process to obtain planning consent to convert office buildings to residential use.
This has been well received in the market, particularly from landlords who own obsolete office buildings that do not suit the modern occupier’s requirements. They now have an exit route so long as they act before May 2016 when the legislation will come to an end.
There is also an expected increase in the demand for trade-counter space and new opportunities are being created for this trend with the release of Buckmore Park in Petersfield which is developed by Gentian. The park will be able to capitalise on trade as a result of the recently completed Hindhead tunnel.
... we are starting to see more enthusiasm from developers to commit to building on a speculative basis. We are certain the first developer to make the commitment will be ahead of the curve and will be rewarded with a letting before completion
Further development is also planned in Waterlooville. Vail Williams negotiated the sale of the former BAE Systems facility and has been retained as joint agent to market the redeveloped site on behalf of the new owners, Hargreaves.
Vail Williams played a key role in acquisition and planning advice of the site which resulted in a consented master plan of around one million sq ft of employment space. Since then the business space team has been involved in the marketing of the office space with Highcross and its joint agents.
The purchase included the 285,000 sq ft Building 1000, Lakeside, the former European HQ for IBM. This was subsequently refurbished to a high standard along with the construction of a multi-million pound Atrium reception.
Since its release to the market in 2008 the building is now fully let following several key lettings to occupiers such as Capita, Portsmouth News and Southern Cooperatives.
The most recent deal, brokered by Vail Williams, was to the Portsmouth-based company, Wiggle, one of the world’s leading sports retailers. The result of these lettings adds to the creation of a vibrant business
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JUNE 2014
The new development will be rebranded as Elettra Park and the development scheme is planned to provide a vibrant mix of retail, roadside and trade counter uses.
So where will the market go from here? There is an improving commercial property market, increasing confidence from occupiers and developers and new development schemes on the horizon. The only factor that is stifling growth in the region yet further is a lack of supply where businesses cannot move and grow. The hope is that as confidence continues to increase it won’t be long before we see cranes and new buildings rising over the landscape of the south coast.
Details: Philip Holmes 07733-124438
pholmes@vailwilliams.com www.vailwilliams.com
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