Winchester wins

Old established market towns and old established cities in the UK have often avoided the worst of the economic downturn. That appears to be true of Winchester which, said Goadsby’s Annelies Culley, “is still proving to be fairly resilient.”

She notes the “steady demand for city centre offices.” In particular she mentions the refurbished Athenia House, Trafalgar House and St Swithuns as being in demand. “There has been a lot of excitement regarding the proposed Silver Hill development in the city centre. The mixed use scheme will include high quality offices, retail and residential accommodation. The industrial market is still seeing a good level of enquiries for premium space.” Goadsby has also recently analysed the market in another market town, Romsey where it has seen “a positive start to 2011 with a number of office lettings.” Goadsby’s Ben Welch said: “The market town of Romsey offers an attractive working environment and good access to Winchester and Southampton.”

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High for Highcross

Although city centre office lettings in the region are slow, the out of town business parks have really performed. Lakeside on the former IBM factory at Portsmouth has experienced a spate of lettings culminating in the Southern Co-operative taking 1,593 sq.m. The park now has 70 companies employing 4,500 people, including IBM which is still located there. Russell Mogridge of Hughes Ellard said: “The 130 acre park has attracted more than half of the lettings in the Solent corridor since January.

There are a further four deals totalling 11,148 sq.m. at various stages of completion.” The business parks may be where the action is now but Southampton City Council is pushing hard to make the city centre more attractive for business. It has welcomed the plan by Arcadian Estates, part of the London & Henley Property Group, for the redevelopment of the East Street Shopping Centre. It will be demolished and a Morrisons’ food store constructed on the site in partnership with Centros. As part of the scheme, there will be new access between East Street and Evans Street. In turn that will help, said John De Stefano of London & Henley, “our nearby Capital House office building.”

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MAG builds more at airport

MAG Developments has the determination to undertake significant development at its UK airports even if Manchester is far and away its most important facility.

At Bournemouth, it has a 10 year programme and has submitted a plan for 41,991 sq.metres (452,000 sq.ft.) at its Aviation Business Park. The majority of this will be warehouse and industrial space on the 35 acre site.

It is part of a phased plan to expand the capacity at the airport, where it has recently invested £45 million. David Roberts of MAG commented: “These plans provide a clear long term strategy for the business park and will complement existing stock on the estate. That will attract investment through development opportunities.” It has proved its point with Aviation Business Park where there is an occupancy of around 95% after two lettings totalling 2,320 sq.metres (24,967 sq.ft.), one of which was to Talard Thai which relocated from nearby Christchurch. The company supplies a wide range of foodstuffs and flowers from Thailand.

The other letting was to the specialist aerospace interiors manufacturer, AIM Aviation. The two lettings follow a 3,279 sq.metres (35,295 sq.ft.) pre let to City Link. City Link’s Steve Jones said the relocation from a nearby property would allow the company to expand its operations in the Bournemouth area. “The demands of our customers have changed dramatically. They are very different from 10 years ago and we have to accommodate that,” Jones added.

Aviation Business Park currently provides 139,350 sq.metres (1.5 million sq.ft.) of mixed use business space and is home to 140 businesses with a working population of over 2,000.

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Developing Southampton

Three developments in Southampton, one completed, one with planning permission and the other in the planning stage, continue the improvement to the city. Planning permission has been granted for a new 9,290 sq.metres (100,000 sq.ft.) arts complex, retail space and restaurant units in a joint venture between the council and Grosvenor.

There will also be 29 flats on the site which is around the Guildhall Square. Councillor Royston Smith commented: “Another key development in the Cultural Quarter is coming to fruition. It will be a place where all the arts can thrive and draw in hundreds of thousands of visitors every year.” The second new scheme is a 155 bedroom Premier Inn at West Quay which Cllr. Smith said “is a key element of the West Quay development, which is part of the city’s renaissance plan.” The third project is a plan for Southampton’s tallest building. The residential scheme at Ocean Village with 28 storeys is being developed by Allied Develeopments.

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Fair wind for Weymouth

While many parts of the UK have experienced trying commercial property markets, the south coast has bucked the national trend with a period of improvement.

That applies from Hampshire to Dorset. The major urban areas have benefited from their broadly based economies, taking in services and manufacturing, but it is noticeable how Weymouth, not noted for either of these two activities, has become more dynamic. Of course that is mainly due to it being the host for the 2012 Olympic yachting events but the hope must be that it has been given a new lease of life that will break the log jam of development.

It is clearly apparent how the town now buzzes with activity, helped by a new main road. At the moment it appears that Weymouth is a star performer for the regeneration lobby. The market in the core area of Southampton and Portsmouth, (the Solent corridor) has been solid and even retailing has not been as poor as in many parts of the UK. Russell Mogridge of Hughes Ellard said: “The office level of take up in the region is above pre-recession levels at the end of the third quarter, reaching 32,515 sq.m. compared with the 10 year average of 23,225 sq.m.“ A significant part of this has been at Highcross’ new business park, Lakeside in Portsmouth. This has reached a 65% let in building 1,000 by achieving 9,290 sq.m. of lettings this year. Phase two of the development will begin soon.

Among the trends noted by Mogridge are companies relocating to single floor plates to aid team performance and staff morale as well as improving their working environment. “We have seen movement in the professional service sector, such as recruitment, legal and accountancy,” he added. Nik Cox of Hughes Ellard said: “We are hoping that the out of town activity will percolate to the Southampton city centre, which has seen a limited office take up, probably reflecting the lack of Grade A space available.” Cox also noted that the manufacturing sector had been active and reflected the diverse economy from shipbuilding, defence and high tech. Jones Lang LaSalle’s Jason Webb said: “There are still significant opportunities for occupiers to obtain costs savings on the M27 but the lack of speculative office development means that the pipeline will remain severely limited and as Grade A supply reduces further, the window of opportunity for tenants is expected to close.”

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Industrials to the fore

Confidence is coursing through the commercial property market throughout the region led by a buoyant industrial sector. This has been enhanced by the widespread backing for the Solent Local Enterprise Partnership from the major companies, universities and the public sector.

In Southampton substantial new developments have been given the green light and the strength of the market has persuaded developers to ready new plans. This indicates a healthier situation for pre lets. The economic improvement highlights the natural advantages of an area with major ports, a highly skilled workforce and good communications. Adrian Whitfield of Lambert Smith Hampton (LSH) said: “There has been a high take up of industrial space since mid 2009 but in the current year this could be down because of a shortage of stock. There is a lack of development on a speculative basis.” That has led to more design and build schemes spurred by the shortage of sites.

Another effect is that landlords have been able to rein in the length of rent free periods to about 1 year on a 5 year lease. Andrew Hodgkinson of Goadsby commented “It would not be a surprise to see rents in this sector begin to rise in the second half of 2011.” The central problem is that the shortage could mean that occupiers will look outside the region for their properties, although that situation has not been reached yet. For example, one major site being developed is the 140 acre former power station site of Oceanic Estates’ Marchwood Industrial Park, Southampton. This is being marketed by Adrian Whitfield (LSH) and Matthew Poplett of King Sturge who said: “Marchwood is a unique industrial estate offering opportunities for a variety of occupiers.”

The buoyant industrial market suits SEGRO very well and it has achieved a host of transactions. At Vista Park, Nursling, Pneumax has bought a 1,247 sq.metres (13,427 sq.ft.) unit and SEGRO has also sold two sites on its Voyager Park, Portsmouth. Wernick Group, a hirer of portable and modular accommodation, has bought a 2.5 acre site for a regional depot and Landscaping Supplies has purchased a 1 acre site. SEGRO’s Chris Davies said: “This represents real progress achieving our strategy of selling serviced land parcels at Voyager Park North.”

Leading the way in Southamption

The improvement in the commercial property market is being underpinned by the determination of some local authorities to push the green button for regeneration. What will gratify the government is the emphasis on manufacturing and industry, whether established businesses or start ups. A good example of this is a new maritime and marine innovation quarter at the former Vosper Thornycroft shipyard at Woolston, Southampton.

The South East England Development Agency (SEEDA) has linked with Southampton City Council, with the backing of private finance, to drive this
forward on the site of Centenary Quay. Together with 1,600 residential units, shops and offices, there will be buildings for marine businesses to encourage
new products and innovation through access to top research.

According to SEEDA, manufacturers have expressed considerable interest in participating in the new marine quarter. SEEDA’s Chief Executive, Pam Alexander, said: “We will see a thriving hub of marine manufacturing emerging, linked closely to the higher education strengths of the city.” The development will be helped by the creation of the Solent Local Enterprise Partnership which has been driven by the local business community and is supported by the four universities in the area together with the local authorities. The area has a population of 1.3 million and 50,000 businesses. Doug Morrison of Associated British Ports said: ”The port is at the heart of the vitally important maritime sector and ABP welcomes this initiative of a business led LEP that is focused on putting the business community at the core of economic growth in the Solent area.” On top of this, Morgan Sindall Investments (MSI) has been appointed by Southampton City Council as the preferred developer for the £450 million Royal Pier Waterfront scheme. MSI’s Ernie Battery said: “This key site provided the opportunity to position Southampton at the forefront of internationally recognised waterfront schemes.”

Another major scheme in Southampton is Admiral Quay, Ocean Village, where Allied Developments has bought the site for a major mixed use scheme of residential and leisure from Barratt Homes. Confidence is coursing through the commercial property market throughout the region led by a buoyant industrial sector. This has been enhanced by the widespread backing for the Solent Local Enterprise Partnership from the major companies, universities and the public sector. In Southampton substantial new developments have been given the green light and the strength of the market has persuaded developers to ready new plans. This indicates a healthier situation for pre lets. The economic improvement highlights the natural advantages of an area with major ports, a highly skilled workforce and good communications. Adrian Whitfield of Lambert Smith Hampton (LSH) said:
“There has been a high take up of industrial space since mid 2009 but in the current year this could be down because of a shortage of stock. There is a lack of development on a speculative basis.”

That has led to more design and build schemes spurred by the shortage of sites. Another effect is that landlords have been able to rein in the length of rent free periods to about 1 year on a 5 year lease. Andrew Hodgkinson of Goadsby commented “It would not be a surprise to see rents in this sector begin to rise in the second half of 2011.” The central problem is that the shortage could mean that ccupiers will look outside the region for their properties, although that situation has not been reached yet. For example, one major site being developed is the 140 acre former power station site of Oceanic Estates’ Marchwood Industrial Park, Southampton. This is being marketed by Adrian Whitfield (LSH) and Matthew Poplett of King Sturge who said: “Marchwood is a unique industrial estate offering opportunities for a variety of occupiers.”

The buoyant industrial market suits SEGRO very well and it has achieved a host of transactions. At Vista Park, Nursling, Pneumax has bought a 1,247 sq.metres (13,427 sq.ft.) unit and SEGRO has also sold two sites on its Voyager Park, Portsmouth. Wernick Group, a hirer of portable and modular accommodation, has bought a 2.5 acre site for a regional depot and Landscaping Supplies has purchased a 1 acre site. SEGRO’s Chris Davies said: “This represents real progress achieving our strategy of selling serviced land parcels at Voyager Park North.”