Warrington Office Market Overview
Total Page:16
File Type:pdf, Size:1020Kb
WARRINGTON OFFICE MARKET OVERVIEW The Warrington office market is broken into two distinct constituent parts, the business parks around the periphery of the town, including Daresbury Park, Gemini and Birchwood Park and the town centre. The town centre itself has a “two tier” market comprising the modern developments at Warrington Centre Park, on the edge of the town centre, alongside the traditional town centre market, which is largely made up of refurbished multi-let buildings constructed in excess of 25 years ago and converted period dwellings, for example those around Palmyra Square, Buttermarket Street, Museum Street and Wilson Patten Street. There is currently almost 9,290 sqm (100,000 sqft) of office accommodation being marketed for sale or to let within the traditional town centre, all below 929 sqm (10,000 sqft), the majority below465 sqm (5,000 sqft) and all classified as Grade B- / Grade C in terms of specification. Occupiers seeking Grade A/B+ accommodation require a specification including such items as full access raised floors and comfort cooling/air conditioning and will generally require larger floorplates than those provided within the current supply of offices within the town centre. A total of 2,637 sqm (28,386 sqft) was transacted within the town centre (excluding Centre Park) during 2014 in 19 separate deals with one building, Bank Quay House, in the town centre letting a total of 926.8 sqm (9,976 sqft) during 2014 in a total of 8 transactions. This town centre market is focussed almost exclusively on the smaller end of the scale both in terms of the demand for space and the provision thereof. Larger requirements which may consider a town centre location are forced to look elsewhere. Warrington Town Centre has been somewhat left behind in an office context hence occupiers are drawn to the out of town locations due to the accessibility and strategic geographical locations. The need for a town centre presence for specific public sector departments is being addressed by the joint venture between Warrington Borough Council and MUSE on Bridge Street and Illiad are progressing plans for development of The Stadium Quarter on the edge of the town centre but otherwise the existing stock of accommodation will continue to cater for those occupiers who wish to retain a town centre presence either through necessity or desire. Office demand has historically been derived from both indigenous churn from the town’s healthy business community, but probably most notably inward investment, where occupiers have been drawn to the town’s strategic location, accessibility and strong labour pool. Birchwood Park has historically been the major beneficiary of this attraction, being well positioned for the region’s motorway network with immediate access to both the M6 and M62 motorways, mid-way between the North West’s two major conurbations Liverpool and Manchester with their respective airports each a short drive away and benefitting from its’ own railway station. Additionally the cluster of nuclear related and energy focussed organisations at Birchwood Park has seen the location establish and consolidate its’ reputation as a “Centre of Excellence” for these industries with a national resonance for companies in these sectors and those organisations seeking to establish a foothold, enhance their reputation or to grow their presence within these industries. Town centre properties are rarely considered by these organisations for whom the ability to cluster around similar complementary businesses enables them to share expertise, cross sell business opportunities, recruit the best staff and be close to the bodies issuing tenders to whom they can easily pitch for new work and establish strong working relationships. In addition extensive on site car parking (both for employees and visitors) and the “campus” feel of Birchwood Park with its’ landscaped site and associated amenity offer is a strong attraction which is absent from the town centre; the ability to offer staff gym membership in the on-site fitness centre and subsidised food in the numerous cafes and restaurant helps the recruitment process as does the on-site crèche, cycle hub, subsidised shuttle bus to and from Birchwood Railways Station and Birchwood Shopping Centre and managed programme of occupier events throughout the year. Furthermore the investment in conference facilities, bookable meeting rooms and a serviced/managed office offer which provides flexible space from a one person office upwards on “all inclusive” terms together with the provision of large scale modern BREEAM Very Good Grade A office buildings and a Design and Build offer which can provide a new build solution of any size has helped attract footloose tenants who are seeking a strategic location either within the North West region or indeed UK wide. The scale of this offer at the upper end of the market is the key to attracting tenants seeking to make a strategic move whether it constitutes a relocation, consolidation of a number of offices around the region into one central location or to open a new office. These opportunities are simply not currently available within the town centre and without the investment in Birchwood Park as outlined above these occupiers would simply seek accommodation elsewhere, where the size and quality of office accommodation was available alongside the transport infrastructure and amenity offer as outlined above. Even in 2010 when the Warrington office market recorded an all-time low annual take up figure of just 9,031 sqm (97,212 sqft) Birchwood Park was able to demonstrate its’ ability to attract major footloose occupiers with the letting of a suite within the new build Grade A office building 303 Bridgewater Place to Rolls Royce. This was a prime example of the “clustering” trend, with Rolls Royce seeking to enhance its’ growing nuclear sector operation and quite simply wanting the best quality office in the location best suited to helping them recruit the best individuals who would then be able to grow this arm of their business as quickly as possible. In subsequent years Serco and Your Housing have signed up to pre-lets of 2,962 sqm (31,884 sqft) and 3,252 sqm (35,000 sqft) respectively at 305 Bridgewater Place and 601 Birchwood Park in a market where Design and Build pre-lets have been practically unheard of. Additionally major speculative refurbishment and rebranding of the existing office stock, notably 401 Faraday Street (formerly Thomson House) and Chadwick House has seen single floorplate lettings of 1,443 sqm (15,533 sqft) to Nuvia, 1,533 sqm (16,500 sqft) to Hyder, 1,533 sqm (16,500 sqft) to URS and 1,434 sqm (15,436 sqft) to The Ministry of Justice for a new courtroom to house the ongoing Hillsborough enquiry. Birchwood as a whole accounted for 12 of the largest 13 office deals in 2014, equating to 18,329 sqm (197,230 sqft) or 62 percent of all take up. Birchwood Park itself accounted for 5 of the top 12 deals in Birchwood. This continued Birchwood Park’s strong influence at the larger end of the market from 2013 which saw the second highest level of overall take up recorded - just over 30,000 sqm (323,000 sqft) - of which Birchwood accounted for almost 50 percent. These opportunities are not available within Warrington Town Centre and were they not available at Birchwood these occupiers may well have considered relocating to other regional business parks or followed a recent trend of “Urban Tendency” strategic relocations into Manchester city centre – a number of high profile organisations have relocated here in recent years to take advantage of a young, well educated workforce, strong university links to the 30,000 students graduating each year and enhanced transport facilities together with a growing city living population and enhanced leisure/retail offer. Trader Media, who were based at Woodlands Park, Newton le Willows, are a good example of this having relocated into 5,574 sqm (60,000 sqft) at First Street in 2014. Manchester is the fastest growing city in the UK outside London and already accounts for 40 percent of GVA generated in the North West. Competition for footloose occupiers will also be seen in forthcoming years from a number of North West development projects which are currently positioning themselves for speculative office development and/or have recently changed hands with a view to investing in the existing facilities and enhancing their offer to occupiers. These locations will be targeting major regional and national general office requirements along with businesses within their respective specialist areas. The main activity recently can be summarised as follows:- Manchester Airport City (www.airportcity.co.uk) JV between Manchester Airports Group, Beijing Construction and Engineering Group, Carillion PLC, Greater Manchester Pension Fund and Argent as Development Partner. Aiming to deliver 465,000 sqm (5 million sqft) of office, advanced manufacturing and logistics facilities over the next 15 years. Focuss will be on generic office occupiers as well as targeting transport/airline related businesses. Media City, Salford Quays (mediacityuk.co.uk) Developed by Peel and home the BBC, ITV and University of Salford amongst numerous TMT (Telecommunications, Media and Technology) sector companies. Recently announced a 13,500 sqm (145,000 sqft) pre let to BUPA for a new headquarters office demonstrating their ability to attract conventional occupiers as well as media orientated businesses. Legal & general have purchased a stake in the scheme