Looking at enterprise

Viability of the Bristol Temple Quarter Enterprise Zone has been improved by the inclusion of residential development.

That is the view of Gordon Isgrove of GVA, saying that the Enterprise Zone should look to Bristol’s Harbourside for inspiration on how to achieve a 24 hour city. Isgrove said: “The new Enterprise Zone has laid out a vision of being a hub for creative and digital industries. I should urge those planning the zone not to overlook the benefits of including an element of residential use to create truly mixed use and creative development.” In his view the success of the zone will not only be the number of jobs it creates but also the establishment of a sustainable city quarter where people want to live and work and prove an attraction to property investors over the long term.

The zone will play an important part in the growth of the city because it aims to create 17,000 jobs over a 25 year period, although some doubt has been cast on whether this can be achieved solely with creative and digital industries. That said, the letting of space in Bush House, one of the most prominent buildings in Bristol, to Yucca, a digital marketing agency, indicates a demand from that sector even if it has taken a small amount of space. Ben Martin of Yucca commented: “Bristol has been establishing itself in the past few years as a creative hub for the digital media.”

Cashing in at Cabot

The Crown Estate is cashing in on the successful Cabot Park, Avonmouth by selling a third share to Axa Real Estate acting for a client.

The 33 acre site will be developed by the Co-operative group as a regional distribution centre. The Crown Estate will retain the other 64 acres on the park, which is used by Honda for storing its vehicles. The park wasdeveloped by a joint venture of Gallan and Stoford with DJ Deloitte acting for the Crown Estate.

The Crown’s regional portfolio includes shopping centres, retail parks, industrial estates and business parks across the UK. Its portfolio is valued at over £7 billion.

Avonmouth is at the heart of an active industrial market that benefits from good transport links. This brings a steady stream of deals, such as Flights Hallmark taking 3,467 sq.metres (37,317 sq.ft.), through Lambert Smith Hampton (LSH), in Silverton Investments’ Port Edward Centre. The building will be used by a fleet of buses serving the region. LSH’s Tim Beare commented: “The Port Edward Centre is now a fully occupied estate, further demonstrating that Avonmouth
continues to be a target destination for a broad range of high quality occupiers.”

The strength of the Avonmouth market makes refurbishments such as the Croudace Properties’ unit at Third Way Corner (which is being marketed by DTZ and Jones Lang LaSalle), profitable. Research by DTZ shows that the south west has the smallest amount of industrial space available in the UK, now below 10% of total availability.

The firm’s Philip Cranstone said: “The refurbishment of the unit is a good example of the emerging Grade B battleground in the south west and results in some of the best quality refurbished space in Avonmouth.”

A foretaste of how the market is going is provided by Central Park, Bristol getting its first pre let with the pallet distributor CHEP taking 4,645 sq.metres (50,000 sq.ft.) for a 15 year lease. It will be operational in the second quarter of 2012.

£50 million Exeter project

Exeter is in line for a major development with Network Rail seeking a partner for a £50 million project adjacent to Exeter St David’s.

The 6 acre site could support more than 13,935 sq.metres (150,000 sq.ft.) of mixed use space together with a better transport interchange to mate in with Network Rail’s work on the station. There will also be a new public park.

The likelihood is that the scheme would have student accommodation, offices and a hotel. Network Rail’s plan is to fund the scheme by passing the freehold, or a long leasehold, onto the developer once two parts of the project are completed: the multi storey car park and the train crew accommodation.

Creative in Bath

Bath is also due for a substantial new development through St James’s Investments and Tesco. The £50 million mixed use scheme on the site of the former Bath Press site has been modified to increase the amount of commercial space.

The new proposal is for a Tesco store, 4,554 sq.metres (49,000 sq.ft.) of creative work units, 2,834 sq.metres (30,500 sq.ft.) of offices and 10 residential units. This would make the joint venture the largest provider of workspace for artists in Bath.

Reaping the benefits

One developer that clearly believes in the prospects for growth in Bristol and the positive outlook for new schemes is Salmon Harvester.

Together with NFU Mutual, it as now bought the 0.3 acre Three Glass Wharf site on the waterside at Temple Quay from PWC, the Administrators, which is within the upcoming Enterprise Zone. There is an existing planning permission for a mixed use scheme of 12,077 sq.metres (130,000 sq.ft.), including offices, retail and residential.

Rorie Henderson of Salmon Harvester said: “The purchase is a further endorsement of our confidence in the city centre market in Bristol and follows our purchase of Two Glass Wharf last November.”

This adjacent site, which has been close to a pre let deal, can accommodate a similarly sized scheme to Three Glass Wharf (which, if built, alone would have an investment value of £40 million) and could be combined with the new acquisition for a larger project.

Axa was negotiating for a pre let on Two Glass Wharf which, had it been completed, would have been the largest in the south west at 6,503 sq.metres (70,000 sq.ft.). The insurance company wanted to bring its staff into one building, but has now decided to review its space requirements. Salmon Harvester had been one of the investors in the original Castlemore scheme for Glass Wharf and paid £5 million for the Two Glass Wharf site.

Another strategic site which will provide one of the largest development opportunities in the south west is coming onto the market in the shape of the University Hospital Bristol NHS Trust’s General Hospital. The city centre 3 acre site has 17,465 sq.metres (188,000 sq.ft.) and will be vacant next year.

Bristol is the fourth cheapest city in the UK at £4,410 per workstation, above Leeds in fifth spot. DTZ’s Philip Morton said: “Once again Bristol features as a good value for money location in terms of overall business cost. Occupiers continue to look at the cashflow over the length of their lease which will become critical when the International Accounting Standard 37 affecting lease accounting comes into operation in April 2012.”

Efficiency beckons

Savills estimates that a staggering 6.5 million sq.metres (700 million sq.ft.) of commercial floor space may need to undergo an energy efficiency overhaul by 2018. Of this total, 538,220sq.metres (5.8 million sq.ft.) is in Bristol. The analysis is based on the impact of the Private Rented Sector Regulations which form part of the 2011 Energy Bill. Michael Pillow of Savills said: “If the legislation goes through, leasing of a sub Grade E standard property will become unlawful from April 2018”. The advice is to go beyond basic levels of refurbishment to make properties easier to let because companies are increasingly attracted to greener buildings.

The chances are that this will lead to higher rents as well as making it easier to let. Even so, Savills’ warning is a real scare at a time when letting markets are in deep trouble.

Cubex buys in Glastonbury

Cubex has bought the 30 acre Morlands Enterprise Park, Glastonbury from the South West RDA funded by Palmer Capital and the Beckley Island Regeneration Trust (BIRT). Situated on the edge of Glastonbury and close to Street, the former tannery site has a number of blue chip clients such as Screwfix, Avalon Plastics and Thompson Group.

Cubex has also bought the residual land for further development. Peter Walford of Cubex commented: “We already have a number of enquiries from people interested in taking space and expect to announce new deals in the near future. The purchase has been funded through our principal funding partner, Palmer apital, and follows on from the successful model established at our Bath Business Park.”

Backing Bristol

There are signs that Bristol is heading for an improved office market that will put it back in the spotlight as one of the top regional cities.

The growing shortage of Grade A space indicates that speculative schemes could be once again on the agenda and that rents will respond. At the moment, said Simon Price of Alder King, “the city centre is polarised around a considerable amount of empty second hand space that is unlikely to be let in the near future.”

The likelihood is that space will be refurbished for a variety of uses and in some cases demolished for new schemes. “We now have five or six active enquiries for sizeable amounts of space of between 2,323 and 6,503 sq.metres (25,000 and 70,000 sq.ft.) and believe the growth prospects are good for the next 12-18 months,” Price said. He has two clients examining plans for new development, a sensible policy given that supply of Grade A is only sufficient for just over a year. As far as rents are concerned, the top rate is £296 a sq.metre (£27.50 a sq.ft.) which will now apply to new schemes. The expectation must be for incentives to narrow.

Although take up declined by 47% to 8,0822 sq.metres (87,000 sq.ft.) in the second quarter, there was, said DTZ, “greater interest in highly specified Grade B which offers more options and flexibility for mid sized professional firms.” The consensus is that take up will be around the same level as 2010 although this could be beaten if Axa take the sizeable amount of space they have indicated they need in the future. Indeed the financial sector was more active with some firms seeking space that they can grow into. The investment market reflects the improving situation “with a tentative equilibrium at the prime end and a contrast with the secondary properties which will be re priced.”

Space shrinks

Bristol’s industrial and distribution market performed strongly in 2010 with 193 transactions totalling 213,670 sq.metres, the highest total since a peak in 2007. The driving forces were improved manufacturing and distribution space for retailers.

Chris Miles of King Sturge, Chairman of the Western branch of the Industrial Agents’ Society, said: “The industrial and distribution market in Bristol remains relatively buoyant. It is very encouraging to note that the UK manufacturing sector finished strongly and indeed the last quarter of 2010 saw it record its best trading conditions for 16 years.” DTZ’s Simon Lloyd said: “The South West continues to have the lowest availability of stock in the UK with a limited amount available to occupiers.

The market was, however, buoyed by a number of larger transactions in retailers Morrisons and the Co-op but these were land acquisitions.” Avonmouth is the key location for distribution which is why the Co-op wanted a distribution facility here. This is now being funded by AXA Real Estate Investment Managers. The 40,412 sq.metres scheme is being developed by Stoford and Gallan Group. Stoford’s Dan Gallagher said: “In the current economic climate, forward funding is one of only a few forms of development capital available and we are pleased to work with AXA and continue our long term relationship with the Co-op Group.”

Big sheds dominate

Major distribution facilities are at the heart of a vibrant industrial sector which has emerged strongly from the recession. That is because geographical necessity plays a significant role. That applies to Swindon where the Japanese car firm Honda performs so well and could play a bigger role in the immediate aftermath of the earthquake in the home country.

Its key location brought DIY firm B&Q into a massive 74,007 sq.metres (796,649 sq.ft.) shed on Gazeley’s G Park, South Marston, which was completed two months early. That is a change from the phased occupation that was originally planned. The site has the capacity for two more large sheds, although smaller than B&Q’s, at 40,876 sq.metres (440,000 sq.ft.) and a quarter of that size.

Gazeley’s Charles Blake commented: “Deliverability is the key. The buildings have planning permission and the roads are going in because of B&Q.” In this case the DIY firm bought the freehold. Another substantial development is by UBS Triton Property Fund which has demolished the former Woolworth shed and, working with Graftongate, is seeking planning permission for a 41,805 sq.metres (450,000 sq.ft.) facility although it might opt for a solar photovoltaic park. Also at South Marston, RO Developments (ROD) has sold a 384 sq.metres (4,136 sq.ft.) unit at South Gate for £340,000. Richard Bourne of ROD said: “RO24 Swindon continues to prove popular with local businesses and private investors. We only have 5 units remaining and we expect these to go soon.”

Meanwhile, there has been an improvement in the office market in Swindon, said Kenington’s Jeremy Sutton, with an increase in enquiries in the first quarter and more buildings going under offer. “There are opportunities in lease renewals and companies are now looking to move to better space. This is mainly smaller occupiers although there are some more substantial enquiries in the market.” He expects the totally rebuilt Station Square office property, which at 4,645 sq.metres(50,000 sq.ft.) is one of the largest in town, to do well.

Creating jobs

While sentiment in manufacturing is stronger than for over a decade, there is some hesitation among economists about its effect on employment. In the case of Bristol, Oxford Economics expects employment to be negative for 2010 and 2011, mainly because of the loss of public sector jobs.

The argument is that the service sector is not picking up fast enough to help with employing people who have been made redundant by the government. Oxford Economics looks for a solution in expanded consumer spending and investment.

This might be too gloomy a picture for a region like the South West where a combination of high technology companies, top educational establishments and good environment bring their own impact on the economy.

Mood Improves

Oddly enough, given its many advantages, the south west economy and commercial property market has been one of the hardest hit regions of the UK in the recession. There had been such a dynamic in the past decade, notably in Bristol, that it looked set to weather the economic problems more easily than most parts of the UK. That view was reinforced by it having a thriving defence and high technology industrial sector, as well as its role in the UK’s distribution network. After a difficult period, the mood has lightened with September seeing a significant improvement in the office sector, notably in the out of town market which has been in the doldrums for some time. The indicators are for the improvement to continue and before long we will be facing a shortage of Grade A stock and large industrial buildings. The economy has been improving in the past five months, said the South West RDA after a recent survey by Markit Economics, even though the seasonally adjusted Business Activity Index sank to 52.8% in August from a three month high of 54.5% in July. There was a fractional inflow of business in August but the heartening point is that recent growth has come mainly from manufacturing.

This expansion has brought a rise in employment in manufacturing, which should be translated, in due course, into demand for commercial property. Shane Vallance of the South West RDA commented: “We’ve suspected for some time that the economy might struggle to maintain the pace of its recovery, and the latest data appears to confirm this. Indeed new orders and employment have weakened considerably, particularly in the service sector” (which means lower demand for offices). According to the Trades Union Congress 100,000 jobs have been lost since the peak of employment in the third quarter of 2007. The worst affected are construction (down 24 %) and transport & storage (down by 13%). The numbers employed in agriculture have, however, risen by 52%. These analyses provide the raw material for the stagnation of the property market in the past, although the recent rise in confidence could, hopefully, overcome this.


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Prime Yields to Fall

A further reason for a more positive view is a recent report which suggests that prime property yields in the UK could fall to around 4.85% in 2014, implying a 40% rise in prime commercial property values by the end of 2015. That is the view of a report by Chesterton Humberts and the Centre for Economics & Business Research (cebr) which noted the likelihood of low lending interest rates and the underlying strength of the financial services sector. Chesterton Humberts’ Paul Abrey said: “Our research suggests that the long term prognosis is good due to economic factors that are likely to remain in place for some time.” The cebr argues that that “the gap between government bond and property yields will narrow, indicating that investors perceive property to be a safer bet than in the recent past with the prospect of increasing values as the yields on government stock remain low.”


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Orega opens in Bristol

Orega, the flexible office provider, is to open its first office in the south west by taking 2,508 sq.m. in Deeley Freed Estates’ Ten Victoria Street, Bristol. The property has been redeveloped and extended recently following the relocation of the law firm Beachcroft to another Deeley Freed building in Portwall Place. Orega’s Paul Finch commented: “Bristol has a stable regional office market which provides us with the same rationale for new business centres as Birmingham and Manchester where we opened last year.” As a locally born businessman, he extols the merits of Bristol for business with a tighter market and greater levels of occupancy and fewer voids. Andrew Maltby of Deeley Freed said: “Orega’s distinctive brand perfectly complements the high quality framework of our building, while its range of services and meeting rooms will provide enhanced facilities for the remaining conventional office accommodation available on the top two floors (of a five storey property).” Acting on behalf of Deeley Freed were DTZ, Colliers International and King Sturge.


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Industrial Shines

The brightest sector in the south west over the past few months has been industrial property. Sustained demand led to the decline in the amount of Grade A properties of more than 4, 465 sq.metres (50,000 sq.ft.) together with a fall in the rate of return on Grade B and C stock. In fact the overall take up, said DTZ, fell by 15% and Grade A accounts for 48% of the total. In its view, the market will “prove to be a battleground for landlords with many looking to customise stock to attract smaller local occupiers.” DTZ’s Simon Lloyd said: “While the majority of the take up has been in Swindon in the last quarter, there are a number of occupiers looking for large buildings in the region which should be reflected in the figures for the third quarter.”

The largest deal was a letting of 19,509 sq.metres (210,000 sq.ft.) at the Spectrum building, Swindon to TS Tech, an automotive company. Jeremy Hughes of BNP said: “The industrial market has been interesting with a number of large deals, such as the Cooperative leasing a 37,160 sq.metres (400,000 sq.ft.) shed at Cabot Park.” This was made possible by the surrender of land by Honda. Another major deal recently completed is the letting of a 7,989 sq.metres (86,000 sq.ft.) property at Portbury by LVT of London. Hughes said: “It will not be long before we will have a shortage of large buildings.” In Bath, one former industrial building, a printing works, is to be redeveloped by Tesco and St James to include a large supermarket, 2,787 sq.metres (30,000 sq.ft.) of creative work space, 3,716 sq.metres (40,000 sq.ft.) of offices, a museum and community space in a design by Make. The scheme will cost £50 million.


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Life Returns to Business Park

After some years of slow activity, the out of town business parks in the south west have sparked into life this year. Increased activity by occupiers has, however, failed to dent the amount of vacant space which is increasing. Ben O’Connor of GVA Grimley said: “Take up has bucked the national trend and in the first half a total of 27,870 sq.metres (300,000 sq.ft.) was let, up a third on the previous half year total and, even better, by 60% on January-June 2009” The top deal was to Motorola who leased 5,388 sq.metres (58,000 sq.ft.) at Kembrey Park, Swindon. In addition there were “significant transactions” at SPark, the Bristol and Bath Science Park at Emersons Green, Bristol which is to have the National Composites Centre in a hybrid research and development building which will include offices. “Development activity in the south west has appeared to run contra to the national trend,” added O’Connor. “The amount of floor space under construction in the middle of the year doubled
from the start of 2010.” Even so that was only 46% of the five year average.

The challenge for the future is to reduce the 130,060 sq.metres (1.4 million sq.ft.) of empty office space, which is at a 14 year high. The optimistic view is echoed by Simon Price of Alder King who said: ”We have experienced an upturn in activity since the beginning of September with an increase in the number of companies looking at space. Indeed it has been our busiest month for a year and the rise was particularly marked in the out of town market where there have been a number of lettings, such as 3,716 sq.metres (40,000 sq.ft.) to Mitie at Emersons Green and 5,574 sq.metres (60,000 sq.ft.) at Bristol Business Park.” Price added that there are also two sizeable deals in the pipeline for Aztec West to add to a year “which has gradually got better. We are hopeful that the trend will continue and be amplified by the fact that there is a lack of new development.” The signs are good because Price has recently undertaken appraisals of new schemes.


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

CABE Hits Swindon

The government architectural watchdog, CABE, has given
Swindon a hard time over two of its development projects.
It has called for a design rethink on the £100 million housing led development of the Swindon College site because of its concerns about the plans from Ashfield Land and Parkridge.
CABE said: “This is a unique opportunity to create a new piece of town and improve the connection between the old
town and the new and help raise the profile of Swindon.”
It also criticised plans by Swindon Gateway Partnership for a large housing and community scheme and an extension to the Great Western Hospital site near Coate Water Country Park. One part of the town’s regeneration that is going ahead is the green walls feature as part of the Public Realm Works for a new look Canal Walk. They will cover the south side of the bridge that connects the Brunel Plaza with the Brunel Arcade and the north side of the bridge. Green walls are living, planted structures that continuously change and evolve as the plants grow and mature within them.


The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Work in a mansion

An unusual business centre at Clevedon Hall, a Victorian mansion in north Somerset has started operations. The policy at the Enterprise Development Centre (EDC) is to support business growth by providing enhanced managed serviced offices with low overheads and flexibility. EDC’s Peter McCarthy commented: “Our philosophy is to support small and medium sized businesses (SMEs) to achieve sustained profitable growth.” The flexible contracts can include a range of shared services, such as scaleable software applications as well as mentoring by seasoned
entrepreneurs. The first business at the EDC was Goodridge Environmental, a specialist turbine and general power provider specialising in remote areas. Goodridge’s Chris Williams said: “The EDC is perfect for an aspiring young business like ours. It’s a supportive entrepreneurial environment as well as being in stunning surroundings.”
He added that “discussions with the EDC management team has already helped to save our business nearly £3,000 by following their advice on using hosted shared platform software.”



The South West Commercial Property Register The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.

Gazeley still building big

One major new industrial scheme on the horizon for Swindon is a 74,009 sq.metres (796,649 sq.ft.) distribution centre for B&Q at G. Park being developed by Gazeley. It is adjacent to the A149 and will service stores in southern England and will have a completed value of £70 million. Gazeley’s Nigel Godfrey said: “We will complete the facility next summer, As well as reducing the environmental impact of the development, Gazeley has sought to ensure that the building will deliver significant annual operating costs saving to B&Q through reduced energy consumption.”










The South West Commercial Property Register

The South West Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in the South WestServiced Offices in the South West and industrial commercial property in the South West. You can also find the latest commercial property news for the South West region.