Head of steam

The industrial sector has picked up steam which has been highlighted by the pre let of a large shed on the Suttons Business Park, Reading to Brakes Group, a food supplier, the largest of its type ever in the town.

The deal, through Haslams and Lambert Smith Hampton (LSH), means Standard Life Investments will develop the 19,230 sq.m.distribution and storage unit as a chilled warehouse. Philip Hunter of LSH commented: “This deal alone equates to more than 60% of the total industrial space transacted in Reading last year. For large industrial occupiers, the shortage of big sheds poses a very real challenge when it comes to acquiring new premises.”

Haslams’Neil Seager said: “Brakes’ acquisition of this new facility is an important transaction, both for Reading and the wider Thames Valley industrial market. Not only does it mark the largest deal of its type, but it sees the arrival of a major new occupier to the town.”

Another major scheme in Reading sees Royal Mail seeking a developer to buy a 69,675 sq.m. mixed use scheme on the 6 acre site of a former sorting hub. Royal Mail has planning permission for a scheme which would have 370 homes, offices, shops, restaurants and a hotel. Martin Gafsen of Royal Mail commented: “We have a strong track record in using theproceeds from the disposal of surplus property to invest in the mail operation.” Meanwhile, the office take up in Reading recorded a 116% increase to 17,191 sq.m. in the first half year compared with the same period of 2010, reports Stephen Head of Hicks Baker. He added that: “There are concerns that continuing economic uncertainty and fragile business confidence is slowing the rate of deals in the pipeline and this means the market may struggle to match the total take up of 2010.”

Head notes that the outcome will depend on the major enquiries in the market, such as Reading Borough Council and ING. He added that: “The market is relying on at least one of these ‘trophy deals’ coming to fruition in the next few months. We have to consider this (the take up in 2011) in context and remind ourselves that 2010 was already a considerable improvement on and 150% up on 2009.” The council’s decision should come in October. ING is looking for around 8,361 sq.m, more than it occupies in Reading at the moment where the lease ends in 2014.

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Wanting it green

Sentiment in the key Thames Valley market of Reading will be boosted by the competitive bidding for PRUPIM‘s Green Park campus.

At the moment the expected price is around £400 million although that may not be the final figure. The bidders are substantial enough, (such as Delancey, Blackstone and MSREF) to make a deal effective. Indeed there is considerable potential because one third of the planned 204,380 sq.metres (2.2 million sq.ft.) still has to be developed.

In the past few years there has been a move towards town centre lettings in Reading to the detriment of the business parks, but this may well change as the availability of Grade A space declines.

Meanwhile, Reading Council is again looking for a substantial amount of space in the centre. While the general situation throughout the country is for local authorities to cut spending, Reading has a problem with its staff at the civic centre in Dusseldorf Way who are exposed to an asbestos problem. The current thinking is that the council will take a building of 7,897 sq.metres (85,000 sq.ft.), which is about 30% less than planned three years ago when the high construction costs stopped the scheme.

The council will have to develop the new civic centre but it also has the opportunity to trade its existing site. One new scheme in Reading is RO Developments’, in association with Urban Switch, refurbishment of the 1,440 sq.metres (15,500 sq.ft.) Napier Court office building in Napier Road, adjacent to the railway station. Refurbishment will be completed by the autumn and the property is being offered as a leasehold or freehold. Rhodri Shaw of Strutt & Parker, joint agents with Parkinson Holt, said: “RO‘s flexibility and realistic pricing, coupled with Napier Road‘s proximity to the railway station and outstanding parking levels will provide occupiers with the best of in-town and out-of-town locations.”

One recent large letting has been Capita taking 2,233 sq.metres (24,040 sq.ft.) in Schroder Exempt Property Unit Trust‘s New Century Place through Lambert Smith Hampton.

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Slough, again

SEGRO is unending in its expansion and improvement of the flagship Slough Trading Estate. The latest development is a 6,916 sq.metres (74,445 sq.ft.) warehouse for Selig, a manufacturer of sealing products, which has been located on the estate for more than 80 years and will take a 15 year lease.

SEGRO‘s Paul Lewis said: “In today‘s fast paced, global economy, the occupational requirements of major international businesses, such as Selig, evolve quickly. As the only location in the south of England to have Simplified Planning Zone status, the trading estate has a significant advantage.”

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