property
Event Horizon
This year, as you may expect, it cannot avoid Brexit. It is noted that while some occupiers in this sector have paused, a good number remain active with some driven by Brexit stockpiling and others by the continued expansion of online retailing and some surprisingly positive manufacturing numbers.
In Reading, take is down compared to 2017 but this was expected due to the lack of supply. It is reported that units over 15,000 sq ft are in particularly short supply. Rents have moved on again with £12.50 per sq ft being achieved at Suttons Business Park and £15 per sq ft at Trade City, Reading Gateway.
The town saw over £100 million of investment in this sector during the course of 2018 which demonstrates the continued appetite from investors who generally view this sector as a safe property haven at the current time. As a result yields remain at record low levels.
There are a number of new developments on the starting blocks albeit in the short term this will not plug the supply gap sufficiently.
Event Horizon Reading Industrial Market 2018
To paraphrase members of Parliament, commentators and many others, the most important political and economic event in a generation is, as we start 2019, now firmly on the horizon.
These schemes include McKay’s Theale Logistics Park and Arlington’s concept proposals at Reading International. Those that drive into Reading along the A33 will probably have noticed the rather large advertising hoarding for the latter.
Every market during 2018 was impacted in some way by the uncertainty surrounding the UK’s future relationship with Europe and the rest of the World post 29th March 2019. The industrial property market in 2018 was impacted, but not necessarily in the way we all thought. Largely, the market was polarised. As expected, a number of occupiers decided to take the “wait and see” approach. This noticeably calmed a proportion of the demand. However, other occupiers were not spooked by the uncertainty and took the view that whatever the result they would find a way of dealing with changes. This was borne out by the latest Markit/CIPS UK manufacturing purchasing managers' index which read 54.2 last month, higher than the 53.6 recorded in November, and a six-month high. More impressively, the rate of the rise of this index for manufacturers’ inventories was the 4th highest in the survey’s 27 year history.
As we predicted early in the year in one of our market snapshots, this increase - it is widely acknowledged - is partly as a result of occupiers providing themselves with a “BREXIT buffer” in the event of a no deal. If you consider this unexpected event in complete isolation from the general economic and political climate it has been good news for the UK industrial property market, and there is no reason why this trend will not continue in 2019.
Occupiers driven by these types of structural changes ideally will want to keep their current and additional property occupation flexible. However, with supply still being low, they are likely to face competition which means landlords will still be able to secure long leases for the foreseeable future. This will provide yet another fillip to the already heated investment market as investors continue to choose industrial property as a safe haven versus the other property asset classes.
Haslams welcomes the recycling of poorly located and obsolete stock to much needed residential at Cardiff Road, but encourages stakeholders to open their minds to green field development in more appropriate places perhaps to the south of the town. Such is the strength of the market in these
During 2018 this polarisation in the UK industrial property market was reflected in Reading. A number of high profile lettings were agreed at record rents, whilst letting voids increased slightly.
The lack of
supply kept the market in check. The continued dearth of “standing stock” means landlords still hold the upper hand even with a thinner demand profile. The appetite for prime trade counters in the town was a positive, particularly given the issues currently being experienced on the UK high street.
For further information contact Neil Seager:
neilseager@haslams.co.uk haslams.co.uk
Savills celebrates a flying start to 2019
Savills new homes team in Reading enjoyed a record month for sales in January as buyers lined up to invest
The team, which appointed a new head of department at the end of last year, saw an uptick in both interest and sales in the first month of the year, indicating positivity in the local market.
The busy start to the year can also be attributed to the launch of two anticipated new schemes, both of which were brought to the market by Savills in January.
300 Kings Road is a stylish scheme of 78 studio, one and two bedroom apartments in the centre of town. Greys Mews is a boutique collection of 13 apartments set in a Grade II listed former vicarage, alongside a number of new build mews-style homes, in the conservation area of Castle Hill.
Head of new homes Alexa Peters commented: “There is a buzz in the market, with the new year bringing a new wave of buyers who are actively searching and, for the right property, willing to commit. Fortuitously, two exciting new launches, together with our existing portfolio, mean we have been able to satisfy much of the appetite we have seen.
THE BUSINESS MAGAZINE – MARCH/APRIL 2019
“The launch of Verto last year was a game- changer, with its state-of-the-art gym, landscaped roof gardens and concierge service introducing a standard of living that just wasn’t available here beforehand. 300 Kings Road is another scheme at the forefront of this new brand of ‘London-style’ lifestyle development, and as such, both developments are attracting considerable interest from first-time buyers, professionals, downsizers and investors.
“Outside of the town centre, smaller schemes, such as Greys Mews, add to the choice of high-quality accommodation. Located in a highly desirable area and meticulously designed and finished, Greys Mews opened its doors only a matter of weeks ago and already over a third of units have been reserved.”
Gordon Hood, head of residential lettings, added: “There is a good deal of interest in the Reading market, and the quality and type of housing stock being delivered is ticking the boxes for buyers, investors and tenants alike. I’m pleased to support investors and tenants across all our developments,
Haslams’ Industrial Property Snapshot 1st quarter 2019
Haslams has released its annual ‘sci fi’-themed Industrial Market update for Reading, writes Neil Seager
locations, values for industrial development now beat residential.
The rise of technology will continue to play an important role in the sector. AI and robotics need to be thought about in future design and refurbishment. Indeed, much like a Dalek and stairs, a robot tasked with moving goods around a warehouse is unable to cope with a floor that is not precisely flat.
For a copy of the full report Event Horizon contact Tanya le Sueur:
tanyalesueur@haslams.co.uk
Previous years reports are also available: 2017 – Eleven
2016 – A Rogue One 2015 – The Search for Stock 2014 – The Market Awakens
Verto
offering a seamless service. This is particularly appreciated by our international investors, for whom we act as a ‘one stop shop’ – providing everything from virtual tours, investment guides, solicitor and interior designer recommendations, through to securing and supporting tenancy.”
Savills Reading offers extensive local knowledge and expertise, augmented by a powerful national and international network, helping clients get the best from the market.
For more information, contact: 0118 9520500
savills.co.uk
businessmag.co.uk
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