news Reading: can it achieve city status?


With a sizeable employment market, strong take-up and circa 10 million sq ft (929,030 sq m) of office stock, Reading continues to punch above its weight as a commercial location


New research from Savills suggests that its housing market will need to expand to allow Reading to achieve city status.


Reading remains the dominant office market in the outer South East, outperforming all other nearby locations. The long-term average take-up is just over 400,000 sq ft (37,161 sq m).


Reading appeals to a spectrum of occupiers from international corporates, to start- ups taking advantage of available talent. Reading’s technology cluster is now considered the second largest behind London.


The town’s investor appeal is also evident, ranking fourth for UK investment volumes, (excluding central London), coming in behind heavyweight cities such as Manchester, Birmingham and Edinburgh.


Savills Reading head of office Phil Brown commented: “We believe that the traditional golden triangle of knowledge economies, Cambridge, Oxford and London, can be extended to Reading to


form a ‘knowledge kite’. People working in Reading are a rich mix of international and domestic employees, predominantly in the technology sector. Our research shows that a third of technology businesses employ people from outside of the EU, the highest figure in the UK. This provides Reading with a degree of insulation from Brexit.


For this reason, the town has seen a raft of new office development as a result of strong occupier demand. Savills analysis indicates there is likely to be a shortage of town-centre office space by 2019 and that Thames Valley occupiers will move elsewhere in the region if needs cannot be met.


Despite Reading’s commercial success, constrained housing stock is currently holding the town back from reaching full potential (estimated 699 per year required).


A boost in city centre office to residential conversions (in the year to March 2016, 254 homes were converted) has provided up to 34% of new supply.


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There is currently no build-to-rent stock in Reading, yet there is high demand to support this tenure. Almost a third of households rent privately in Reading, significantly above the national average and much more in line with central London. Reading has become less affordable for local people, with average house prices now nine times annual earnings, up from six in 2013.


Brown added: “Ultimately, for Reading to grow into a city it needs more homes of all tenures, not just in urban locations, but also on the periphery, looking beyond its boundaries to achieve full potential.


savills .com


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THE BUSINESS MAGAZINE – OCTOBER 2017


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