Commercial Property Review 2018
At London Clancy’s recent New Year’s Reception, where over 80 delegates, investors, developers and professionals attended David Heda Head of Agency at London Clancy’s Southampton office gave a positive outlook to the current level of activity in the industrial, warehouse and office market across the south coast reviewing the 2018 take up.
David Heda commented
‘The big shed market has performed well over 2018 both nationally and regionally’.
Nationally, it has been reported that take-up of industrial & logistics space (units of 100,000 sq ft +) hit 16.4 million sq ft in the first half of 2018, a 25% increase on last year’s figure with demand again being underpinned by online retail activity with occupiers in the sector accounting for 28% of all transactions.
There has also been a good level of industrial take up in all locations across the M27 corridor.
On major new industrial developments Eastleigh and Chandlers Ford continues to demonstrate its key strategic importance as a location with strong occupier take up.
Paul Davies Freight has taken 40000 sq ft at newly completed unit 4 Reliant Close Chandler Ford at a reported rental of £9.67 sq ft and Charles Kendall have taken 45000 sq ft at Alpha Park Chandlers Ford Industrial Estate.
At Mountpark Eastleigh on phase 2, out of 4 units built only two remain available. American company PFS Web has taken 107500 sq ft as a fulfilment centre to serve their Heineken contract. PFS Web provides ecommerce and multichannel outsourcing solutions for global consumer brands, online retailers and branded manufacturers.
Matthew Clark has signed for the 67500 sq ft unit relocating from Hedge End.
At Hedge End off Junction 7 DFC Freight have taken a new unit of 24760 sq ft at Hamilton Business Park.
Likewise on Nursling industrial estate take up has been strong where Union Mart Ltd, a leading UK supplier of pressure washers have taken a 16,500 sq ft unit, Young Transport have taken 10 Oriana Way, a 61,000 sq ft unit and Gregory Distribution one of the largest privately owned transport companies in the UK, has taken 62,000 sq ft. to serve its contract with Hovis Bakeries.
SME’s continue to find it difficult to find alternative space however there has been some take up with industrial valve manufacturer Warren Morrison taking 8,000 sq ft at Tower Industrial Estate, Eastleigh and vending machine supplier Selecta UK Ltd taking 7,500 sq ft at unit 2.
Employment land remains acutely in short supply evidenced by the recent purchase by Kier Group of 3 acres of land at Solent Business Park Whitely for their logistic city brand reported to be at a price of circa £950000 per acre, the scheme will accommodate occupiers looking to lease units, from 10,000 sq ft to 60,000 sq ft.
At Adanac Park Oceanic Estates have established a planning consent for up to 400000 sq ft of B1 industrial space although were unable to secure B8 warehouse consent from Test Valley Borough Council.
Oceanic also have under construction their 31881 sq ft warehouse at Centenury Quay Woolston which benefits from deep water access.
At Chalcroft Business Park Burnett’s Lane Hedge End/Horton Heath our client’s have submitted a full planning application for a small unit scheme of 28000 sq ft and two larger units of 20000 and 25000 sq ft.
Industrial investment yields remain keen evidenced by the recent disposal of The Quadrangle Romsey a multi let industrial estate of 125000 sq ft which has been purchased by CBRE Global Investors on behalf of Hampshire County Council after a competitive bidding round reflecting a yield in the region of 4.5%
Threadneedle have purchased the freehold of Avalon warehouse complex, Parham Drive, Eastleigh providing approximately 110000 sq. ft. of space being offered on a new lease.
M&G Real Estate, have purchased phase 1 of the Mountpark scheme at Eastleigh let to Coopervision, Berensden and Paul Murray Cosmetics.
T.H Real Estate have acquired from Legal and General the 125,255 sq ft unit at Hounsdown Business Park, renamed Optima 125 which is now fully refurbished.
On offices, take up has been more encouraging over the first half of the year particularly in the city centre.
There has been more emphasis now on shared working facilities with a major new shared working facilities coming to the city centre at the start of year include Network a 12,500 sq ft of office space in the Marlands Shopping Centre aimed at digital and creative companies.
A new shared work space on Southampton’s High Street, offers 11,000 sq ft of co-working and office space.
On general take up there has been a 20% decrease in take up over 5,000 sq ft with approx. 50000 sq ft transacted last year, compared to just over 60,000 sq ft in 2017.
Good news story is the fully refurbished White Building of 50000 sq ft in Cumberland Place which is now virtually fully let.
MOSL has taken on a 4,825 sq ft office suite and joins an impressive list of tenants, including James Cowper, Foot Anstey, Regis Bentley, Novum Law, Blue Arrow, Manpower and Barton Willmore.
The largest city centre transaction was the letting to Norwegian Cruise Line taking 17,263 sq ft at Mountbatten House.
A number of buildings are coming back into the market refurbished including;
1 Dorset Street – – 14700 sq ft
Imperial House Kings Park Road – 7900 sq ft
Oceana Commercial Road – 21500 sq ft
11 The Avenue – 13400 sq ft
With headline rents now ranging from £20-£22.50 sq ft