Shortage looms

At the moment Leeds has a good supply of Grade A properties to let but this could change rapidly with an upswing in lettings. The reason for that is that there are only 4,273 sq.metres (46,000 sq.ft.) under construction, the lowest figure, reports Drivers Jonas Deloitte, since 1996.

The three largest properties available at the moment are Highcross’ 13,935 sq.metres (150,000 sq.ft.) Broad Gate, Headrow; Deltalord’s the Mint, which is 10,684 sq.metres (115,000 sq.ft.) on Sweet Road and IVG’s slightly larger No.1 Leeds, Whitehall Road. “There are still cracking deals to be done in the market,” said Richard Thornton of King Sturge, ”and this could drive the market rather than increases in rents. There is greater confidence with increased viewings and more money around.”

He notes the reasonable levels of demand, but also that it comes from smaller organisations. Like Pearey, he feels a major incentive will be pressure on companies to move to take advantage of favourable leases with rent free periods. Because the three large buildings available are considered to be outside the city core, David Powell of Drivers Jonas Deloitte said: “From a developer’s perspective, there may be money to be made doing a high quality or high end refurbishment aimed at smaller lettings, and in the middle of the city.”

Holiday expansion

The steady expansion of the business has led Great Railway Journeys to lease additional space in Saviour House, York close to the world renowned Shambles. The company, which specialises in escorted group holidays by rail, has taken 1,189 sq.metres (12,800 sq.ft.) through Sanderson Weatherall. Great Railway Journeys’ Martin Johnson said: “We actively encourage our customers to visit our offices to discuss their rail journeys and the central location of Saviour House is ideal for customers and staff.”

Also in York, Instant Offices Managed LLP has leased 2,853 sq.metres (30,706 sq.ft.) through Jones Lang LaSalle in Quintain’s Hudson House, Toft Green. Instant Managed Space has taken a two year lease and following the refurbishment of the space, will sub lease it to Network Rail, which already occupies a big chunk of the buildings. This will allow Network Rail to relocate some of its work force while refurbishment of its existing George Stephenson House next door proceeds.

Wilton on site

Formerly known as Midland House, 28 Bond Court was bought by Wilton Developments in September last year and will now undergo major refurbishment and modernisation. When complete in September 2011, it will deliver 15,250 sq.ft. of quality Grade A office and retail space to the Leeds market. Planning permission is expected soon on the ground floor retail elements of the scheme. Wilton Developments have seen a gap in supply for high quality accommodation in Leeds for small to medium sized firms and that is where 28 Bond Court will come into its own. Eamon Fox, associate director of DTZ’s Office Agency Team in Leeds, commented: “28 Bond Court will offer wonderful alternative, small suites of an exemplary standard in a prime location.”

The future of regeneration?

The question hanging over the commercial property industry in Yorkshire is, what effect will the ending of the Yorkshire Forward RDA have on regeneration? Clearly reductions in regeneration are inevitable to accord with the tougher economic climate. That is the case in Bradford where the ambitious redevelopment of the Odeon site has been scaled back, as have projects in Grimsby, Scarborough and Rotherham. In many cases the return on schemes by the RDAs has been very favourable and a study by PricewaterhouseCoopers estimated that for every £1 spent by an RDA, regional economies benefited by £4.50, a figure which is increased substantially.

Another problem intrudes on the debate in the changes to planning laws. According to John Howell, Private Secretary to the Minister of State for Decentralisation, the coalition’s presumption in favour of sustainable development would be a thread running through the new planning system. Howell said that councils that failed to plan for new developments would be, “assumed to have a completely permissive planning system.” A developer could then build “what they like, where they like and when they like” provided they met new national planning guidance being worked up in tandem with the localism bill.

Howell suggests that this would give incentives to councils and his views have been welcomed by the British Property Federation. Where the RDAs are concerned, assets will be transferred or sold to a variety of organisations such as local authorities, local enterprise partnerships or central government (or even the private sector). In the view of Martin Farrington of Leeds City Council that might not favour regeneration. “We need to have controls and guarantees in place so we don’t lose the original economic purpose for securing the sites. If they were controlled by a body that did not share that vision, then it would set Leeds back years.” Clearly that would apply throughout Yorkshire. This could mean a number of visionary plans would not go ahead.

Rewarding army town

Catterick is another town which is going ahead with regeneration in a deal between Lingfield Securities and Defence Estates. The £15 million project will create around 11,148 sq.metres (120,000 sq.ft.) of retailing and leisure as well as an 80 bedroom hotel and 285 car parking spaces. Advised by GVA, Defence Estates’ Geoff Dixon commented: “Our first priority is supporting our armed services and their families.

We look forward to working with Lingfield to ensure that a sustainable community for the soldiers, their families and the local population is delivered at no cost to the MOD budget.” Paul Brewer of GVA said: “We are already seeing major interest from large national retailers looking to gain representation within the scheme.” There has been a considerable amount of regeneration in Catterick, such as the leisure centre, and the plan is to link all the new sites.

Wakefield bucks trend

At least Wakefield is going ahead with further stages of its £140 million Merchant Gate scheme by English Cities Fund (ECf), a partnerships of Muse, Legal and General and Homes & Communities Agency (HCA). Jones Lang LaSalle and King Sturge have been appointed to market the 4,459 sq.metres (48,000 sq.ft.) of offices, which are close to Wakefield railway station giving rapid access to Leeds and London (2 hours). JLL’s Jeff Pearey said: “The three buildings of Merchant Gate make an impressive new business district and comprise some of the best offices available in Wakefield.” Emma Cordingley of ECf said: “Despite the economic climate, this landmark scheme, alongside those such as Trinity Walk and the new Hepworth Gallery, are spearheading Wakefield’s current major urban regeneration programme.”

Full steam ahead in Doncaster

While many cities and towns in Yorkshire cut back on regeneration, Doncaster appears determined to maintain its effort for improvement. It has started building the new civic and cultural centre with a ground breaking ceremony where the mayor, Peter Davies, said: “This has the potential to be a catalyst or stimulating growth in our economy. The intention is to create a destination that complements our quality shopping and market areas and encourages more visitors and businesses to Doncaster.” Michael Broadhead of Muse Developments, which is undertaking the scheme with the council, said: “The ivic Quarter will really set the standard for further new buildings in the town and region.”

The scheme is being partly financed by the European Union and later this year construction will commence on a performance centre, civic square and housing (bringing it back into the centre of Doncaster). In later hases there will be a library, swimming pool and leisure facility, further town centre housing, commercial offices and additional parking. Such is Doncaster’s confidence in the scheme that it has released a video to promote the town and its new facilities to a wide audience throughout the UK. Meanwhile, Doncaster will become part of the new local enterprise partnerships which replace the regional development authorities. In this case, in the Sheffield City Region which includes Sheffield, Rotherham, Barnsley, Bassetlaw, Bolsover, Chesterfield, Derbyshire Dales and North-East Derbyshire.

This region has witnessed a considerable amount of new development and regeneration and has done particularly well in terms of distribution and warehouse schemes. In turn this has attracted new investment, such as HSBC buying the final phase of Valad and Shepherd Developments’ West Moor Park scheme in Doncaster for a £9.1 million, a yield of 7.3%. The 14,864 sq.metres (160,000 sq.ft.) Quattro warehouse is let to Scotts Miracle-Gro.Richard Squire of Shepherd said: “West Moor Park is now well established and a prime location in the Doncaster area and, indeed, in the whole of Yorkshire and Humber region and epitomises the renaissance of South Yorkshire to the past decade.”

Confidence flows in Chelmsford

Chelmsford’s local authority believes the town has overcome the ravages of the economic slowdown and is attracting both developers and occupiers. It argues that there are still opportunities for further development. The council cites Churchmanor’s Chelmsford Business Park, located to the north east of the town, with its 25 acres of low density, high class commercial accommodation within an overall 40 acre site and which still has plots available for new build development.

There are a variety of leases and even freehold sales on the park. For example, Visteon Engineering Services moved into a speculatively built 2,787 sq.metres (30,000 sq.ft.) building on an occupational lease. Local Housing Association, CHP, also moved to the park recently, to join existing high profile occupiers including International Financial Data Solutions, Clifford Thames and ebm Papst. At Springfield Business Park, also to the north east of the town, the concentration is on industrial and distribution space with occupiers including City Link, Parcelforce Worldwide and Aldi.

Further new build opportunities exist, providing potential occupiers with the ability to specify a building to their exact requirements. Local agent, Robert Dewar Commercial, has recently secured a new lease on a 4,924 sq.metres (53,000 sq.ft.) former Boots warehouse on the nearby Dukes Park Industrial Estate from Kent Foods, an Ireland based food ingredients supplier. As far as the council is concerned, the presence of BAE Systems’ Integrated Systems Technologies Centre, a significant global technology player, together with many of the other former GEC Marconi businesses, makes Chelmsford one of the foremost advanced manufacturing and electronic engineering centres in the UK.

Recognizing this key strength, the town will soon commence development of a new innovation centre with the specific objective of encouraging and facilitating global innovation in advanced technologies both by the major players and smaller, niche operators. Paul Bullock of Lambert Smith Hampton commented: “It is a patchy market with a shortage of Grade A offices but a proliferation of second hand space. But there are development opportunities which have been held back by the difficulty of raising finance.” He anticipates a better second half year in 2011, adding that “Essex has withstood the
recession well.”

High tech race

The most ambitious project, which is already underway, is to create a high technology highway stretching from Shoreditch into the East End. There are already a number of corporate clusters and the government has seen the potential and is pushing it hard as part of the Olympic development.

The Olympic Park Legacy Company (OPLC) is talking to the US group Cisco about it taking space within the media centre. The government said Cisco was discussing the project with the OPLC about creating an innovation centre which has been enhanced by commitments from Google and Intel for such a centre.

Facebook is also in on the act with a plan for headquarters for the Developer Garage programme. BT has already committed to a super fast broadband system for the area and Loughborough University wants to construct an Institute of Sport and Health at the park. Meanwhile, the OPLC is seeking an operator for the 377 ft ArcelorMittal Orbit tower, which is known as the “mutual trombone” and is designed by Cecil Belmond of Arup and sculptor Anish Kapoor. That is merely the start of the process because the organisation will also seek operators for the aquatics centre, arena and management of the park.

New shops in Luton and Basildon

One sign that the pressure of the recession is easing is that two major towns are likely to get major new shopping facilities. Basildon Council is pushing ahead with the big mixed use scheme in the town centre now that the Barratt/Bowden Wilson joint venture has been appointed to carry it out. This will have 51,979 sq.metres (559,520 sq.ft.) of retailing and leisure and slightly more than that for offices. There will also be 1,900 residential units together with enhanced civic facilities and infrastructure improvements.

A spokesman for the developers said: “Basildon is a good place to invest, with great potential for growth.” In Luton, British Land is expected to take over the stalled £200 million PowerCourt retail development from Ballymore, which owns around 40% of the site, the rest being with the council and the Environment Agency. The plan is expected to have 46,450 sq.metres (500,000 sq.ft.) of retailing and 200 homes.

Milton Keynes the growth centre

Milton Keynes continues to be one of the liveliest places in the country for commercial property with a steady flow of deals. It remains an attractive place for new investment with one of the largest recently being Aviva Investors funding a 22,296 sq.metres (240,000 sq.ft.) retail park which will be anchored by a large Marks & Spencer store.

The development will be around the Milton Keynes football stadium with a planned completion in 2012. The deal has been transacted by the club’s Chairman Pete Winkelman who plans to spend some of the money on expanding the stadium seating capacity. The strong point about Milton Keynes is the number of companies that are growing organically and adding to their properties. For example, Pfeiffer Vacuum has satisfied its space requirements at 16 Plover Close in the nearby Newport Pagnell, which benefits from the performance of Milton Keynes. Douglas Duff acted for the UK subsidiary of the German company whose Peter Knight said: “The new premises are ideal and convenient in being close to where we were well established.”

Also at Newport Pagnell, Buck-Biz is to transform a former food manufacturing plant on a 3.5 acre site into a home for a variety of offices and industrial units for over 70 medium sized businesses. Planning permission has been granted by Milton Keynes Council, which includes a new access road. Joe Muscat of Buck-Biz, which operates seven business centres across the area, said: “Even before completion of the Interchange Business Centre we have a number of companies planning to move in.”

One of the largest transactions in MK is the British Standards Institution (BSI) leasing 5,202 sq.metres (56,000 sq.ft.) at Solaris Court on a 15 year lease from the owner Arab Investments. BSI’s Chief Executive, Howard Kerr, commented: “The new premises will provide our staff with a very modern and efficient environment. We have ambitious growth prospects and see this move as a catalyst for realising this.” BSI will move staff in from other properties in MK and Hemel Hempstead.

One sign that the pressure of the recession is easing is that two major towns are likely to get major new shopping facilities. Basildon Council is pushing ahead with the big mixed use scheme in the town centre now that the Barratt/Bowden Wilson joint venture has been appointed to carry it out. This will have 51,979 sq.metres (559,520 sq.ft.) of retailing and leisure and slightly more than that for offices. There will also be 1,900 residential units together with enhanced civic facilities and infrastructure improvements.

A spokesman for the developers said: “Basildon is a good place to invest, with great potential for growth.” In Luton, British Land is expected to take over the stalled £200 million PowerCourt retail development from Ballymore, which owns around 40% of the site, the rest being with the council and the Environment Agency. The plan is expected to have 46,450 sq.metres (500,000 sq.ft.) of retailing and 200 homes.

Cambridge Soars

While the majority of towns and cities in the UK have struggled through the recession, Cambridge appears to have bucked the trend with a good flow of lettings and rising rents. This has proved rewarding for Juniper Estates, a firm set up two years ago. Juniper’s Mike Ayton said: “The city centre market has been resilient and the stock shortage has meant a rise in rents.” This is demonstrated by the example of Microsoft paying £317.42 a sq.metre (£29.50 a sq.ft.) on Brookgate’s new building in Station Road.

What is even more impressive is that some refurbished space lets for £301.28 a sq.metre £28 a sq.ft.), figures rarely reached anywhere in the UK. The future trend of rents also appears to be upwards with Pace Investments seeking £349.70 a sq.metre (£32.50 a sq.ft.) for its speculatively built 4,645 sq.metres (50,000 sq.ft.) New Botanic House on Hills Road. According to Ayton, the outlook for the out of town business parks is also favourable with two new schemes seeking £285 a sq.metre (£26.50 a sq.ft.) and the relaunch of the 42,000 sq.ft. HQ da Vinci Building at Melbourne Science Park. Last year’s take up in Cambridge was a respectable 41,805 sq.metres (450,000 sq.ft.).

RBS takes control

A further example of the management of the banks’ property debt is Royal Bank of Scotland expected to take control of the 28,427 sq.metres Friars Square Shopping Centre in Aylesbury. It would take over from Brookfield and the likelihood is that Grosvenor would be appointed to manage the mall and advise on its future development. Aylesbury is also in line for a major industrial development by Arla Foods. The company plans to spend £250 million on the world’s largest dairy in a scheme on an adjacent site around 92,900 sq.metres of industrial warehousing in two sheds. In addition there will be five units for small and medium sized companies.

Under starter's orders

As the impending Olympics weaves its magic spell over East London, the rest of the region is experiencing a tough, but improving, market. There are even some bright spots on regeneration and development with Basildon going for its large town centre scheme. Colchester has also seen increased activity.

On the basis of recent figures for Essex and adjacent areas, demand has improved with offices at 213,670 sq.metres (2.3 million sq.ft.) and industrial at 483,080 sq metres (5.2 million sq.ft.). As with the rest of the UK, there is a growing shortage of prime new space so companies will have to increasingly look to second hand accommodation. That would normally bring an increase in rentals over time but it provides a healthy backdrop for any new schemes in the next 18-24 months. Which is where the institutions and banks come in because developers need the funding to start building gain.

The influence of the Olympics is all pervading and includes south of the river where Development Securities has joined Cathedral Group in a £100 million mixed use scheme called The Movement, Greenwich, centred on Greenwich Light Railway Station. Central to the scheme is a 103 bedroom hotel to be completed in time for the Olympics. The rest of the scheme, which has 180 residential units, 372 student flats, educational space, offices and leisure facilities, will be completed in 2013. Cathedral’s Richard Upton said: “We aim to create a new community in the heart of West Greenwich. In 2012 Greenwich will be in the international spotlight as a host borough for the Olympics.”

The Olympics are also the driver for a joint venture of Cycas Hotel Partners and Patron Capital in buying the long leasehold rights for two hotels at Westfield Stratford City. As in Greenwich, they will be completed by 2012 and will be a 188 bed Holiday Inn London-Stratford City and a 162 bed Staybridge Suites.

More in Twyford

The initial success of Hazeley Enterprise Park, Twyford, where 13 light industrial units have been let has led to a second phase of four small office units. Charles MacLeod, the Property Manager, said: “The exceptional level of interest in the office units has resulted in half the space being committed and a number of offers on the remaining units.” The park is owned by the Humphrey family and is a short distance from the M3 motorway as well as mainline railway links.

Up 65% in Western Corridor

The confidence is flowing back into the Thames Valley market as agents experience a rise in lettings and key towns perform again. The figures bear this out with Jones Lang LaSalle reporting a 65% rise in office take up for the Western Corridor in 2010 compared with the previous year to a total of 5,090 sq.metres (2.1 million sq.ft.). The impetus in the third quarter came from a number of large deals. What is gratifying is that the average deal size was up substantially on 2009 at 1,830 sq.metres (19,700 sq.ft.). JLL’s James Finnis commented: “Office take up in the Western Corridor was relatively silient in 2010.

The deals were generally driven by lease events and consolidation rather than expansion, with the focus of activity remaining in town centres, which accounted for more than two-thirds of last year’s expansion.” Bracknell is a good example of this trend with Simon Fryer of Fryer commercial reporting that “the office market fared well last year with close to 18,580 sq.metres (200,000 sq.ft.) let which is not far off the five year average.” In his opinion, companies view Bracknell as “offering the best value office accommodation in the region.” As in the rest of the UK, the market is dominated by short leases. Fryer believes that Bracknell suffers from a shortage of quality small office suites, which Fenchurch Estates is seeking to remedy through their 2, The Braccans, London Road scheme, which was previously occupied by Johnson & Johnson. Fryer Commercial has let one unit and has other potential occupiers lined up.

At One the Braccans, Brocade Communications, a US technology firm, has leased 2,276 sq.metres (24,500 sq.ft.) at £193.68 a sq.metre (£18 a sq.ft.) through Studley. James Page of Page Hardy said: “With prime rents at around £193.68 a sq.metre (£18 a sq.ft.) in Bracknell and substantial incentives on offer, it has become very inviting for occupiers which has brought a good deal of activity over the past year.” He added that there is also a degree of demand from other use classes demonstrated by the sale of Benedict House to Fisher for serviced apartments. Strutt & Parker and Fryer Commercial were joint agents. “There are encouraging signs for 2011 which has started with a number of active requirements touring the town. There are also signs of strong demand from residential uses for some of the vacant offices,” Page said.

Pace quickens

Judging from the 2011 outcome, the Reading market has turned the corner after years of stagnation. After a poor first quarter, the pace quickened to the end of the year when the total reached 30,404 sq.metres said Stephen Head of Hicks Baker. The total included a number of substantial deals, notably Quintiles taking 11,273 sq.metres at 500 Brook Drive, Green Park. Head said: “There was a late flurry of activity with a number of deals that were expected to fall into 2011 completing over the Christmas period and one surprising deal (in the sense that, whilst a known requirement, Pegasystems did not move to the expected building).” He added that “this has to be seen as very positive on two counts as the £322.80 a sq.metre headline rent has been achieved in the town centre and in the immediate future it also takes more Grade A competition out of the supply/demand equation which, from a landlord’s perspective, will put additional pressure on rents.” The central point about the 2010 outcome is that it was up 151% on the previous year and above the 10 year average for the first time since 2007. It will not be too long before there is a squeeze on Grade A offices.

Need to regenerate

An improvement on the market in the M3/27 area is on the cards as the region moves further away from the recession. That is the prediction of Mark Clancy of London Clancy who said: “There is more confidence in the market compared to a year ago and improving sentiment as the rebuilding of the economy continues. The pace of the recovery should also pick up, particularly towards the end of the year.” Clancy also warns of some problems, such as the availability of bank finance and the impact of government spending cuts. “That said, there will be great value in the market of the M3/M27 corridor for funded property owners and occupiers, especially in relation to secondary opportunities.” This year’s challenge, Clancy suggests, is the regeneration of some of the 1970s and ’80s business areas and the promotion of new development. That will require “strategic vision.”

Furthermore, while the industrial and warehouse sector will remain stable, that for offices “will move forward from the disappointing 2010 levels as occupiers seek to take advantage of low second hand office rents and substantial incentives.” Basingstoke should benefit substantially from the improved market climate. Among the deals last year Hammer, a specialist storage distributor, signed a new lease on a 1,858 sq.metres (20,000 sq.ft.) unit at Valad’s Intec Business Park for ten years at £107.60 a sq.metre (£10 a sq.ft.). As part of the deal, Valad will be investing in new building services and air conditioning upgrade. Valad is also investing in the refurbishment of part of Building 2 on the business park as part of a wider asset improvement programme.

SEGRO Helps ColdKIt

Rapid expansion of the business has meant the refrigeration company ColdKit increasing the size of its presence on SEGRO’s Kingsland Business Park, Basingstoke. It was initially to take a small unit close to its existing premises but has now opted for a large unit of 2,365 sq.metres (25,457 sq.ft.) on a five year lease. It will now surrender the lease on the smaller units. William Quail of ColdKit, which is headquartered in Portugal, commented:” We have enjoyed significant growth over recent months and the new unit will provide the space we need for our range of new supermarket refrigeration products.” SEGRO’s Chris Davies said: “We were keen to support the company’s continuing expansion in the area through providing a flexible solution to its property needs.”

Rents to rise at Heathrow

An increase in rents for industrial and warehouse space for Heathrow and the Western Corridor is predicted by Jones Lang LaSalle for 2011. The agent expects key Grade A sites at Heathrow to rise to £150.64 a sq.metre (£14 a sq.ft.). JLL’s Bridget Outtrim said: “The immediate vicinity of Heathrow’s cargo terminal is an exceptional location where, to date, there has been no premium stock available to set rents but there are two key sites coming through for development which could push up pre let rents.” While food and drink are the key occupiers in the logistics market, JLL notes “recycling and waste disposal businesses have emerged in 2010 and their need for large sites and open storage land, away from residential areas, possibly with railway access, will persist.”

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Maidenhead launch

Commercial Estates Group (CEG) is re-launching the 7,669 sq.metres Prospect Park, Hurley, near Maidenhead. One of the largest offices in Maidenhead, it is set in 11 landscaped acres, and will be re-branded as Horizon with marketing by Lambert Smith Hampton (LSH) and Hanover Green. CEG acquired it from the Administrators for Kenmore. LSH’s Cliff Jackson commented: “One of the scheme’s major selling points is its larger floor plates that allows improved internal communications and team collaboration which is a universal pressure for business.” The marketing will target large occupiers in the Thames Valley and those seeking to relocate there. The agents are looking particularly at the pharmaceutical, technology, media and telecoms sectors. The offer is for part floors or the whole building.

Hull gets major investment

For Hull the year has opened in splendid style with Colliers International doing a deal for Siemens for a site to manufacture wind turbines in Alexandra Docks. This is a highly prized inward investment that many parts of the UK were hoping for and is a large facility costing £80 million and, of huge local significance, it will create 10,000 jobs.

Past experience shows that such a new high technology manufacturing facility will act as a catalyst for other companies, notably equipment suppliers for the wind turbines, which will be for offshore and farm installations. Locating in Hull makes total sense because Siemens intends exporting the turbines to other countries in North West Europe.

Yorkshire scores in job creation

On the face of it Leeds and other towns and cities in Yorkshire have a problem in overcoming the effects of the recession. The effect can be most clearly seen in the case of Leeds where, said Jeff Pearey of Jones Lang LaSalle, take up was only 26,941 sq.metres (290,000 sq.ft.), below the ten year average. In other cities, notably Sheffield, the market difficulties have been increased by the government spending cuts.

Yet there is another side to the picture. A report from the Centre for Cities gives a glowing report on the prospects for growth in Leeds and also gives star status to Hull and Doncaster for being in the top spots (with Northampton) in reducing the claimant count in unemployment between March and November 2010. Alexandra Jones, Chief Executive of the centre, commented: “Buoyant cities like Leeds (and Bristol), which have been fast growing and have lots of private sector jobs are best placed to lead the UK’s recovery.” She suggests that these places should have new financial freedoms such as full control over the local business rate, and new powers to raise money as well as benefiting from London style mayors.

Pearey points to the healthy start up sector as well as the firmer start to the year after the tough 2010. We have had more viewings and there is a healthy level of enquiries for city centre and out of town offices.” The public sector accounts for only 10% of the Leeds office market, so the spending reductions will have less impact. “On the basis of recent evidence, we expect to have a better year in 2011, particularly as companies know this is a good opportunity for better deals,” said Pearey. A typical deal in Leeds last year was JLL letting 660 sq.metres (7,104 sq.ft.) In Evans Abstract Limited’s Capital House to Synapse Learning for its first office in Yorkshire and ninth in the UK. Evans’ Harlan Pollitt said, “I am confident this letting will kick start further activity both in this building and in our newly refurbished Minerva House (next door).”

SEGRO gets Harrods

After a lengthy period searching for a new warehouse, Harrods looks to have chosen the former Guinness Brewery site at SEGRO’s Park Royal for the 30,657 sq.metres (330,000 sq.ft.) facility. The site has been renamed Origin Park and if the deal is completed, it will be the first there since Brixton (later taken over by SEGRO) bought it in 2007. It has planning permission for over 46,450 sq.metres (500,000 sq.ft.) of commercial space as well as a data centre.

Road lifts Bedford

Economic and development prospects in Bedford have been considerably improved by the completion of the A421 road linking the M1 and A1. This has enhanced the attractions of the industrial and business parks, allowing vehicles to go round the town. Further improvements, such as links between the A428 and A421 and between the A428 and A6, will bring more gains.

Douglas Duff’s Andrew Clarke said: “We are already seeing more enquiries and the knock on effect of the road looks like bringing higher quality offices and industrial space to the town.” The new bypass makes the main commercial estates and the flagship Priory Business Park more accessible. He added that “the Bedford Borough Council has been very pro active and helpful to businesses and the economic development unit has highlighted ‘22 Strategic Sites for Business.’ The new road should encourage developers to look at Bedford.”

Investors back Reading

A major boost to confidence has come with the arrival of Benson Elliot, a private equity real estate firm, and British developer Stanhope acquiring a majority stake in a massive town centre scheme in Reading. They have bought a majority holding in Sackville Properties’ 157,930 sq.metres (1.7 million sq.ft.) Station Hill scheme. Sackville, which is owned by entrepreneur Sir John Madejski, who has taken the opportunity of a deal in order to pay back debt to Lloyds Banking Group. Sackville will retain a minority stake in the £400 million scheme and a share in the profits.

Having taken on Stanhope as a development partner it was seeking increased financial backing. This deal confirms the view of Reading in a more central role within the Thames Valley for offices; Sackville acquired most of the site from Land Securities in 2005 and was aware it would need a development partner for such a sizeable project. This deal ensures sufficient finance and development muscle. Inevitably, the new owners will rephase the scheme in the light of the Thames Valley market which has been, until now, slow to emerge from the recession. That said, the new owners have shown confidence with Marc Mogull of Benson Elliot saying that Station Hill “will be the new commercial core of Reading. “ He added that “we don’t know what the world will look like in a few years’ time but this is a great piece of dirt given how little space is being delivered in the regional office market.”

The increased role of town centre offices is illustrated with the letting at One Reading Central of 2,097 sq.metres (22,590 sq.ft.) to the software company Pegasystems, where it joins Yell, the international directories business. What is impressive is that the rent agreed through Lambert Smith Hampton for a 10 year lease is £322.80 a sq.metre (£30 a sq.ft.). The development is a joint venture of Kier Property and Invista Real Estate and at 20,252 sq.metres (218,800 sq.ft.) is the largest development in Reading. Kier’s Gillian Scarth said: “Throughout all stages of its development we have acknowledged the top requirements for corporate occupiers of proximity to a mainline railway station and large floor plates being high on the list. Only two floors remain available.” The railway station is being upgraded to handle more trains and help towards faster journey times.