SOUTH WEST OF ENGLAND & SOUTH WALES
OFFICES INDUSTRIAL RETAIL LEISURE INVESTMENT RESIDENTIAL DEVELOPMENT LAND 5 YEARS OF ANALYSIS
DEMAND SUPPLY HEADLINE RENT PRIME YIELDS
Market Monitor Contents
2 Welcome 11 Exeter 21 Swindon
3 Across the region 13 Gloucester 23 Taunton
5 Bath 15 Newport 25 Truro
7 Bristol 17 Plymouth 27 Yeovil
9 Cardiff 19 Swansea 29 A service overview
1 Alder King Market Monitor 2014 100 Temple Street, Bristol. Welcome to the 2014 edition of Market Monitor. This report provides a review of the commercial property market in the South West of England and Wales over the past 12 months, with data, trends and market analysis on 12 key regional centres.
After a year of steady GDP growth and improved confidence, particularly in the manufacturing, construction and service sectors, prospects for the region’s occupier market are at their most optimistic since the downturn began in 2008. As forecast in last year’s Market Monitor, stronger office and industrial take up combined with a greater shortage of new well-specified space led to a return of speculative development in 2013, the first for over four years. Two high profile office schemes are now underway in Bristol city centre, both of which could push rental levels over the £27.50 per sq ft mark. There are also speculative industrial schemes underway in Bristol, Gloucester, Wellington, Bridgwater and Newquay. The region’s retail sector benefits from continued investment, with new retail schemes either in the pipeline or recently completed in Swindon, Gloucester, Exeter, Plymouth, Newport, Swansea, Taunton and Yeovil. Together with a resurgent residential land market and strengthening investor confidence in the regions, we expect to see improving occupier demand and an increasing level of development and investment activity in 2014. Simon Price, Head of Agency at Alder King
www.alderking.com 2 Across the region
Offices Simon Price T 0117 317 1084 E [email protected]
office headline rent £psf
30 in town out of town 25 27.5(296) 20 21.5 (231) 22 (237) 21 (226) 15 (188) 17.5 (188) 17.5 (188) 17.5 17 (183) 16.5 (178) 16.5 (178) (12) 15 16 (172) 15.5 (167) 15 (161) (156) 14.5
10 (140) 14 (140) 13 12 (129) 12 (129) (118) 11 11.5 (124) (116) 10.75
5 (91) 8.5
0
Bath Truro Bristol Cardiff Exeter Yeovil Newport Swansea Swindon Taunton Gloucester Plymouth occupational summary • 2013 saw increased office take up in Bristol, • The positive impact of these PDR proposals Exeter, Gloucester, Swindon and Yeovil. is likely to be two-fold: reducing the supply of • As predicted last year, 2013 also saw the return poorer quality, second hand space and pushing of speculative office development in central more occupiers into the market. Bristol with both Skanska and Salmon Harvester • The overall reduction in supply is already commencing major new developments. resulting in reduced incentive levels in some • The introduction of Permitted Development locations and the prospects for rental growth are Rights has already resulted in a significant level improving. of proposals for conversion of secondary office buildings to residential use.
Industrial Andrew Ridler T 0117 317 1071 E [email protected]
industrial headline rent £psf
10 rent
8 7.5(81) 7.5(81) 7 (75) 6 7 (75) 7 (75) 6.75(73) 6.5 (70) 6 (65)
4 (54) 5 (64) 5.95 4.2(45) (43) 4 2
0
Bath Truro Bristol Cardiff Exeter Yeovil Newport Swansea Swindon Taunton Gloucester Plymouth
occupational summary • Take up in 2013 decreased on the previous year • With an improving number of medium sized in all but Cardiff, Gloucester, Taunton, Yeovil and requirements, occupiers are increasingly only Truro, with a lack of good quality supply being a able to satisfy their needs via the design and constraint to activity in the other centres. build route. • Supply continued to fall across the region, with • With the lack of supply and rising levels of take the exception of Gloucester where there was an up, particularly in the demand triangle of Bristol, increase as a result of SuperGroup’s relocation. Gloucester, Swindon and Taunton, we anticipate • Supply in Bristol is now at its lowest level for 10 further speculative activity. years. • The overall reduction in supply is already • Demand is increasingly focused on better resulting in reduced incentive levels in some specified space, with new build activity currently locations and the prospects for rental growth are underway in Bristol, Gloucester, Wellington, improving. Bridgwater and Newquay.
sq ft (sq m)
3 Alder King Market Monitor 2014 Retail Market Summary Residential Charles Russell-Smith T 0117 317 1043 E [email protected] Development zone A headline rent £psf out of town rent £psf 300 50 Land 250 40 200 30 Chris Haworth 35 (377) 150 225 (2,422) T 0117 317 1042 200 (2,153) 200 (2,153) 200 (2,153) 30 (377) 30 (377) 30 (323)
110 20 28 (301) 28 (301) 100 90
100 (?) 20.5 25 (269) 25 (269) 150 (1,615) 150 (1,615) E [email protected] 23 (248) (215) 20 55 (592) 55 (592) 10 50 19 (205) (1,184) (968) (1,076) 100 (1,076) 0 0 Development land market summary Bath Truro Bath Truro Bristol Cardiff Exeter Yeovil Bristol Cardiff Exeter Yeovil Newport Swansea Swindon Taunton Newport Swansea Swindon Taunton Gloucester Plymouth Gloucester Plymouth • 2013 was the most active residential
(Cabot Circus) development land market in recent years. House building was at its highest level • Following a period of improving GDP growth and • The food-store sector remains very active both in for a decade, with house prices hitting a an increase in consumer spending, the latter part and out of centre. The big five operators continue record high, fuelling developer demand of 2013 saw a cautious level of confidence return to drive expansion through their convenience for new opportunities. This positive to the retail sector. formats and size requirements for larger format change in sentiment was stimulated by stores have generally reduced. Government initiatives making available • Prime rental levels have generally stabilised up to 95% LTV mortgages. across the region and there are reasonable • In most locations, discounters continue to prospects for growth in some centres during dominate demand for both the food and non- • As anticipated in last year’s Market the course of 2014. Good levels of demand food, with Aldi, Lidl, B&M, Poundland and 99p Monitor, demand for well-located remain for prime locations in larger town and Stores active throughout the region. quality residential development land is outstripping supply with consequent cities. Selective demand has returned to good • The leisure sector continues to thrive both in secondary locations. upward pressure on land values. and out of centre and A3 operators are proving Consented, fully serviced sites in good • Following several years of no development, 2013 a welcome addition to the tenant mix in many locations are now regularly exceeding £1 saw the completion of a new leisure development established shopping centres and retail parks. million per net developable acre. at St Stephen’s Place, Trowbridge. In 2014, 2013 has also witnessed considerable growth in the mixed retail and leisure Regent Circus demand from the budget gym operators. • There is much activity on greenfield development in Swindon will open and proposals land on the periphery of cities, towns for the delivery of the Friars Walk Shopping and villages. Sites ranging from five Centre in Newport in 2015 are progressing. to 200 acres are in short supply and our Residential Development team has been very busy advising landowner and developer clients on Conditional Contracts, Options, Planning Promotion Investment John Benson T 0117 317 1100 E [email protected] Agreements and Joint Ventures. • House builders are re-entering the high density city centre market and we value of investment transactions £ms anticipate more small and medium sized apartment schemes in 2014. We have also 350 received institutional-backed, deliverable
300 proposals on city centre sites for high- 319 density Private Rental Schemes (PRS) 250 which are progressing. 200 • There has been a very positive reaction to
150 the Government’s relaxation of Permitted Development Rights, enabling change 100 of use from offices to residential. In 131.33 49.64 123.98
42.75 Bristol alone, circa 0.5 million sq ft of 50 41.6 21.45 16.63 9.63
67.18 development is in the pipeline. 8.87 0 52.85 • With a huge amount of construction
Bath Truro capacity lost since 2007, coupled with an Bristol Cardiff Exeter Yeovil Newport Swansea Swindon Taunton Gloucester Plymouth upturn in construction activity, material investment market summary and labour costs are beginning to rise. Any differential between construction • Increased confidence in a sustained economic • Investment in the South West and South Wales is costs and house prices will impact directly recovery and renewed activity in the occupier dominated by UK investors but there is overseas on land value. Currently, the equation is in leasing market has led to the regional commercial interest in prime trophy assets. All asset types equilibrium . investment market gaining in strength have benefited with the strongest demand for throughout 2013, most notably in the final regional offices, industrial and alternative sectors • Demand remains strong in the retirement, quarter. including hotels, student accommodation and care and student markets. • Strongest demand has been for prime or health. Early interest in the Private Residential index-linked income streams but, with supply Sector is also gaining momentum. constrained, this has led to improvements for • Relaxation of Permitted Development Rights has secondary assets, as investors become more seen strong demand for secondary offices with willing to accept increased risk in their hunt for potential for alternative residential or student use improved returns. and this trend will continue into 2014. • Barring unforeseen economic shocks, we expect to see these trends continue into 2014, with strong demand across all asset types for prime and secondary properties. Yields will continue to harden as demand deepens and evidence of rental growth is confirmed.
www.alderking.com 4 Bath
Offices Simon Price T 0117 317 1084 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
150 600 20
125 500 21 (226) 21 (226) 15 100 400 20 (215.27) 20 (215.27)
92 18.5 (199.13) (8.5) 350 360 75 82 300 10 (33) (33) 305 68 (8) 65 65 255 (28) (6) 240 50 (6) (6) 200 (24) (22) 5 25 100
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre demand supply headline rent • The upturn in occupier demand witnessed in 2012 • Total availability within Bath reduced further • The best headline rent achieved during 2013 continued into 2013 with another strong year of during 2013 to 240,000 sq ft (22,296 sq m). matched the level set in 2012 at £21.00 psf take up. At the beginning of 2014, a number of • With no new Grade A space currently under (£226 psm). large enquiries are actively seeking space in the construction in the city, the majority of the • Any further rental growth at the top end of the city centre. available space is of a period cellular nature and market is likely to be hampered in the short term • The largest deals of the year included the not capable of meeting occupier demand for by the lack of available Grade A space in the acquisition of 14,000 sq ft (1,300 sq m) by British flexible open plan accommodation. market. Maritime Technology at Plymouth House together • The supply picture is set to tighten further during • The general reduction in availability in the market with the sale of Lawrence House, Lower Bristol 2014 as a number of the available buildings are is already resulting in a reduction in incentive Road comprising 16,577 sq ft (1,540 sq m). currently the subject of proposals for alternative levels being offered to secure occupiers. • Once again most activity in the market came from uses, most commonly for hotel, student and the services and professional services sectors. private residential uses. The TMT sector also continues to grow.
Industrial Andrew Ridler T 0117 317 1071 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
30 70 10
60 65 25 (6) 25 8 (2.3) 50 20 50 20 20 (5) 6 40 (2) (2) 7.5(81) 15
15 30 7 (75.34) (1) 30 30 4 6.5 (69.96) 10 6 (64.58)
(3) (3) 6.25 (67.28) 20 20 7.5 (2) 2 5 (0.7) 10
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Good freehold owner occupier demand remains • No speculative industrial/distribution • As a consequence of the lack of supply, headline albeit with limited opportunities. development has taken place in Bath. rental levels have increased to £7.50 psf • The lack of good quality modern space is holding • There is a negligible amount of good quality (£80.73 psm). back take up. stock and the shortage of modern space is set to • There is increased interest in the city from continue. trade and roadside uses but again few suitable opportunities.
sq ft (sq m)
5 Alder King Market Monitor 2014 1. Little SouthGate, Bath. Courtesy of SouthGate Limited Partnership. 1 2 2. CGI of Saw Close, Bath. Courtesy of Deeley Freed/Aaron Evans.
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
300 60 30 32
250 50 25 35 (377) 35 (376.72) (334.45) 200 40 20 30 (322.91)
150 30 15 25 (269.09) 250 (2,690.88) 235 (2,529.42) 225 (2,421.90) 225 (2,421.90) 200 (2,153)
100 20 40 (430.54) 40 (430.54) 40 (430.54) 10 14 (151) 35 (376.72) 30 (323) (118) 11 14 (150.69) 13 (139.93) 50 10 5 13 (139.93) 13 (139.93) 9 (96.87) 9 (96.87) 9 (96.87) 10 (107.64) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • During the course of 2013, TK Maxx opened a • On Lower Bristol Road, Lidl has confirmed that • The former Beau Nash pub on Milsom Street is to new store in High Street and Cotswold Outdoor it will shortly submit a new planning application reopen as a Miller & Carter steak house. opened in Abbeygate. on behalf of the former Herman Miller site. • Elsewhere in the city, Prezzo has opened in the • BHS announced that it will close in January 2014. Acornfield has announced that it will commence Vaults and the Stable in George Street. Bill’s has It is understood that Primark will open a new construction of two retail units on the remainder opened in Cheap Street. of the site in early 2014. store in the premises from mid-2014. • Deeley Freed has submitted a planning • Anthropologie is believed to have agreed terms • The Secretary of State has refused Tesco’s application for the development of a casino, 148 to occupy the former Habitat store in New Bond appeal for mixed use development on the former bed hotel and two restaurants at Saw Close. The Street. Bath Press site. development is anticipated to open in 2016. • In the popular suburb of Twerton, Morrisons has • Sainsbury’s has withdrawn its application for a • The Council has announced proposals to opened its first Local store. new food store on the current Homebase site at transform Grand Parade and the Undercroft into Western Riverside. an exclusive dining quarter, including up to three new upmarket restaurants.
Investment John Benson T 0117 317 1100 E [email protected]
value of investment transactions £ms prime yields % investment by sector 1% 175 8
150 9% 7 125 industrial 123.98 6 100 retail high street
75 other 5 90% industrial 50 office 37.57 4 25 retail high street 27.8 25 22.5 retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total value of investment transactions in • Our current view of prime yields is as follows: • The largest transaction in the city was Multi Bath in 2013 was £123.98m, a significant increase - Industrial 7% SouthGate (LP)’s sale of its 50% share in the from the previous year and the highest level in SouthGate retail centre to British Land for £101m. the last six years. A considerable proportion of - Office 7% The centre has 55 retail units, 14 leisure units, a this total was from one transaction - the sale of - Retail high street 5.5% car park and 25,000 sq ft office space. an interest in the SouthGate retail centre. - Retail out of town 6% • There were limited industrial investment transactions in Bath. One notable deal was the sale of the multi-let Wansdyke Business Centre for £1.2m (NIY 10.24%). • Another significant investment deal was the sale of the Travelodge on Rossiter Road for £11.2m (NIY 9%) to La Salle Investment Management.
www.alderking.com 6 Bristol 1
Offices Simon Price T 0117 317 1084 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
1,600 4,000 30
1,400 3,500 25 1,200 3,000
20 27.5(296) 27.5(296) 27.5(296) 27.5(296) 1,000 2,500 2,650 2,550 27 (290.61) 2,350 (246) (237) 2,380 800 860 2,000 15 (218) (221) 21.5 (231) 21.5 (231) (80) 735 1,900 700 21 (226.03) 21 (226.03) 600 658 1,500 (177) 20 (215.27) (65) (68) 10 594 (61) 400 (55) 1,000 5 200 500
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • 2013 saw occupier demand rebound strongly • In the city centre, less than 260,000 sq ft (24,154 • The best headline rents agreed on new Grade A following a poor year in 2012. In particular the sq m) of new Grade A space is now immediately accommodation in both the city centre and north city centre performed well with demand beating available, with less than 30,000 sq ft (2,787 sq m) Bristol markets remained steady at the same the five year average. available in north Bristol. levels achieved in 2012. • Major deals during the year included Bristol City • Two new speculative Grade A developments are • Incentive levels for the best remaining new Grade Council’s acquisition of 130,000 sq ft (12,077 now under construction in the city centre with A space are likely to reduce during 2014 as supply sq m) at 100 Temple Street and Imperial Tobacco’s Skanska on site with 61,000 sq ft (5,667 sq m) at tightens. development of a new 85,000 sq ft (7,897 sq m) 66 Queen Square and Salmon Harvester/NFUM • The prospects for increases in Grade A headline HQ at Winterstoke Road. with 98,500 sq ft (9,151 sq m) at 2 Glass Wharf, rental levels, especially in the city centre, are • Several large pre-let enquiries are now active Temple Quay Central. improving. in the market, particularly from the financial • The changes in Permitted Development Rights services and professional services sectors. are already resulting in proposals to convert a significant amount of poorer second hand office space to residential use.
Industrial Andrew Ridler T 0117 317 1071 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
3,500 7,000 8
3,000 6,000 7
6 7.5(81) 2,500 5,000 5,500
(511) 7.75(83.42) 7.5(80.73) 7.5(80.73) 7.5(80.73) 2,400 2,400 2,325 4,500 4,500 5 2,000 2,200 4,000 2,100 (223) (223) (216) (418) (418) (195) (204) 3,750 4 1,500 3,000 (348) 2,750 3 1,000 2,000 (255) 2
500 1,000 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • There is a real shortage of good quality stock, • Supply is at a 10 year low and largely comprises • There is no new space immediately available, particularly modern space, which impacted on poor quality second hand space. and we anticipate that rentals of circa £7.75 take up in the second half of 2013 and is holding • We believe there is real potential for design and psf (£83.40 psm) could be achieved for back activity. build activity as evidenced by WBC’s acquisition accommodation below 10,000 sq ft (929 sq m). • There has been a return of mid-range of 20,000 sq ft (1,858 sq m) in Warmley. • Rents for modern and mid-range buildings remain requirements in the 25,000 – 75,000 sq ft (2,323 • The city’s first speculative industrial/distribution at £6.50 psf (£70 psm). Good quality second hand – 6,968 sq m) size range with limited availability. development comprising five units totalling buildings are commanding rents of around £4.75 - • Significant deals include Culina’s leasehold 15,000 sq ft (1,394 sq m) is due to start at Caxton £5.50 (£51.11 - £59.18 psm). acquisition of 211,000 sq ft (19,603 sq m) of Business Park, Warmley. • With the reduced levels of good quality available the Crossflow 550 Building and Arla’s • Owner occupiers continue to seek good freehold stock, rental incentives for prime space are 115,000 sq ft (10,684 sq m) at DC 115, both opportunities but have a limited choice. beginning to reduce and lease durations are on Cabot Park, Avonmouth. extending.
sq ft (sq m)
7 Alder King Market Monitor 2014 1. 2 Glass Wharf, Bristol. Courtesy of Salmon Harvester Properties/NFUM. 2. 66 Queen Square, Bristol. Courtesy of Skanska Property Development. 2 3 3. The Mall at Cribbs Causeway, Bristol.
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
350 50 50
300 40 40 250
30 30
200 45 (484.36) 300 (3,229) 30 310 (3,336.69) 310 (3,336.69) 40 (430.54) 40 (430.54) 150 300 (3,229.20) 300 (3,229.20)
20 35 (376.72) 20 30 (323) (323)
100 30 (322.91) 30 (322.91) 30 (322.91) 200 (2,153) 225 (2,421.79) (1,884) 1 74 200 (2,152.70) 200 (2,152.70) 200 (2,152.70) 10 10 25 (269.09) 185 (1,991.25) 190 (2,045.07) 180 (1,883.70) 50 175 (1,883.70) 15 (161) 12 (129) 15 (161.45) 15 (161.45) 15 (161.45) 15 (161.45) 12 (129.16) 0 0 0 13 (139.93) 13 (139.93) 13 (139.93) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Broadmead The Mall Cabot Circus cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Cabot Circus continues to attract new retailers to • Redevelopment of the former Big W & TJ Hughes • Cabot Circus has added to its existing food and the city centre. Vans opened in the summer and store at Abbey Wood Shopping Park is nearing beverage offer through the introduction of TGI Pull & Bear opened a 48,000 sq ft store, its fifth completion. New tenants will include Asda, B&M, Friday’s and Wagamama. in the UK, in December. Frankie & Benny’s, Nando’s and Costa. • Whiteladies Road continues to see good levels of • The Mall at Cribbs Causeway has re-shaped its • At the nearby Shield Retail Centre, Home activity. The former Ranch has been let to Be.In retail offer through a number of relocations. New Bargains has pre-let 14,300 sq ft (1,328 sq m). Group and the popular Cowshed has extended lettings include Superdry, Jack Wills, Lakeland, • The grant of planning consent to Sainsbury’s at into the former Picture House. Bose and Links of London. the Memorial Stadium is now subject to Judicial • Further afield Dominion Corporate Trust, the Review. owners of Yate Shopping Centre, is finalising • Food store activity remains strong. Sainsbury’s proposals for a new leisure development is shortly to commence works on a new store in comprising a six screen cinema and six Portishead. A new Waitrose at Chipping Sodbury restaurants. is now trading.
Investment John Benson T 0117 317 1100 E [email protected]
value of investment transactions £ms prime yields % investment by sector
700 8 3%
600 4% 7 500 industrial 28% office 492 6 400 retail high street 300
349 5 other 319 industrial 65% 200
262 office 4 100 retail high street
155.19 retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total value of investment transactions in • Our current view of prime yields is as follows: • One of the largest industrial transactions in Bristol in 2013 was £319m. This is significantly - Industrial 6.75% Bristol was the sale of a distribution warehouse higher than the 2012 total of £155m. on Western Approach let to DSG Retail Ltd until - Office 6.75% 2031. M&G Property acquired the property for - Retail high street 6.75% £23m (NIY 7.13%). - Retail out of town 6% • There was a high level of office investment activity in both out of town and city centre locations. The sale of Portwall Place was the largest office transaction of the year. Terms of the deal were confidential although we understand the property achieved close to its asking price of £53m (NIY 6.9%). • A significant retail and mixed use investment transaction was the sale of 15-33 Union Street for £8.6m (NIY 9%).
www.alderking.com 8 Cardiff 1
Offices Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
700 1,600 25
600 639 1,400 (59) 20 1,200 500 1,214 1,200 1,200 (113) 1,000 (111) (111) 1,100 22 (237) 437 (102) 1,000 15
400 22 (236.81) 21 (226.03) 21 (226.03)
379 (41) 380 800 (93) 20 (215.27) 300 (35) (35) 300 600 10
(28) 15 (161.45)
200 12 (129) 14 (150.69)
400 13 (139.93) 13 (139.93) 5 100 200
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • 2013 saw a 30+% reduction in occupier demand • Supply decreased slightly and comprises mainly • Headline rent was maintained in the city centre compared to the five year average of secondary stock. It is arguable whether any Grade with lettings at 3 Assembly Square to Welsh Life 443,000 sq ft (41,156 sq m). Current active A stock remains within the city centre. Sciences Hub, Welsh Ministers and ITV. Future demand exceeds 350,000 sq ft (32,516 sq m) • Potential new Grade A will occur at Capital development schemes will test headline rents. • Over 80% of deals were less than 5,000 sq ft Quarter, Callaghan Square and Central Station • Lettings at Cardiff Gate to Foster Care Associates (464.5 sq m). 50% were out-of-town. with many of the opportunities in public sector and J D Hull maintained out of town headline • Notable deals included South Wales University ownership. rents. taking 21,958 sq ft (2,039 sq m) at Atlantic House • It is predicted that over 300,000 sq ft • Reduced demand has not affected incentives but and Hugh James Solicitors taking 19,383 sq ft (27,871 sq m) of new development will be we expect them to tighten in 2014. (1,800 sq m) at Hodge House. completed by mid-2015.
Industrial Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
700 2,000 2,043 7 1,986 (190) 1,894 631 (184) 600 (176) 6 (59) 572 1,500 5.5 5.5 500 516 518 (53) 5 515 1,467 (59.20) (59.20) 5 5 5 (48) (48) (48) (136) 1,368 (53.82) (53.82) (54) 400 (127) 4 1,000 300 3
200 2 500 100 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • After a slow start to the first half of 2013, • Supply remained relatively static where second • £5 psf (£53.82 sq m) has prevailed since 2011 occupier demand strengthened to record a slight hand buildings coming to market have offset and is not expected to increase over the next 12 increase compared to the five year average. demand. months. • Over 90% of deals were less than 10,000 sq ft • Stock providing less than 10,000 sq ft (929 • A shortage of good quality stock and a slight (929 sq m). sq m) accounts for approximately 76% of total increase in demand should reflect in headline • Notable deals included the letting of 38,000 sq ft availability. rents increasing for quality stock. (3,530.3 sq m) at Trident Parc to GSS and • 177,000 sq ft (16,444 sq m) has become available • Other influences, such as the delay in the rating 27,000 sq ft (2,508 sq m) at Parc Ty Glas to at Wentloog Avenue, formerly occupied by G24i. revaluation, will undoubtedly not help more Rampworld Cardiff. fragile secondary locations.
sq ft (sq m)
9 Alder King Market Monitor 2014 1. Alder King offices at 18 Park Place, Cardiff. 2. 380 Newport Road, Cardiff. 2 3 3. The Levels Industrial Park, Cardiff.
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
600 40 60
35 500 50 30 400 40 25 35 (376.72)
300 20 30 (323) 30 30 (322.91) 30 (322.91) 30 (322.91) 40 (431) 15 200 280 20 250 230 225 225 10 (140) 13 11 (118.40) 30 (322.91) 30 (322.91) 30 (322.91) 30 (322.91) 100 10 (118) 11 5 (3,013.78) (2,475) 15 (161.45) (2,422) (2,422) 13 (139.93) 13 (139.93) 13 (139.93) 13 (139.93) 12 (107.64) 12 (107.64) 0 (2,690.88) 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • St David’s Shopping Centre continues to • Cardiff Gate and Leckwith Retail Parks are fully • Mitchells & Butlers will be taking the ground floor dominate city centre trading especially with occupied at top achievable rents. of the former Habitat building located in The fashion retailers. Despite the closure of Gilly • Newport Road contains the largest mass of Hayes, reinforcing the leisure offer adjoining St Hicks, most of the 1.4m sq ft (130,064.2 sq m) retail stores in the city but has become more David’s Centre. Centre is now occupied. secondary even with a new Morrisons superstore. • Budget gyms continue to thrive as evidenced • Queen Street remains popular as a retail Notable transactions in 2013 included B&M by the letting of the former Porcelanosa unit on and leisure location, as evidenced by the Bargains taking the former Kwik Save and Home Newport Road to The Gym Group. recent relocation of Specsavers and the new Bargains occupying the last units at Avenue development of Primark at the former BHS Retail Park. premises.
John Benson T 0117 317 1100 E [email protected] Investment Owen Young T 029 2038 1996 E [email protected]
value of investment transactions £ms prime yields % investment by sector
210 8 1% 204.36 180 7 1 74.4 150 15%
6 industrial 120 129.6 131.33 47% office 90 5 36% retail high street industrial 78.43 60 other office 4 30 retail high street retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total volume of investment transactions in • Our current view of prime yields is as follows: • The largest retail investment transaction in Cardiff increased by 67% on the 2012 figures, - Industrial 7.25% Cardiff was a block on Queen Street which was rising from £78.43m to £131.33m. bought by NFU Mutual for £45.5m (NIY 4.7%). - Office 7% Tenants include Zara, Topshop and River Island. - Retail high street 5.5% • Another significant transaction was the sale - Retail out of town 6% of Helmont House for £23.15m (NIY 8%). The property comprises a 60,000 sq ft multi-let office and a 200 bed Premier Inn hotel. • A leisure complex on Mary Ann Street with tenants including Cineworld and Gala Casino sold for £18.96m (NIY 6.9%).
www.alderking.com 10 Exeter 1
Noel Stevens T 01392 353093 E [email protected] Offices Ralph Collison T 01392 353091 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
200 450 18
175 185 400 410 16 (17) 350 (38) 14 150
350 (188) 17.5 150
140 (33) 16.5 (178) (14) 135 300 310 12 125 (13) (12) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 250 (28.8) 10 100 100 200 215 8 75 (9) 200 150 (19) (20) 6 50 100 4
25 50 2
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • There was steady take up both in and out of town. • There have been no new build starts for three • The letting of Eagle House to Blur Group off an • There are the first signs of occupiers seeking years. asking price of £17.50 psf is a landmark deal bespoke quality space. • We expect supply levels to have peaked. The demonstrating potential for viable new build. • Many occupiers have re-negotiated their existing increases from 2013 are made up of smaller stock • Rentals for second hand space are starting to rise lease terms. rather than large buildings becoming vacant. and incentives reduced. • Several office buildings are being converted to residential under Permitted Development Rights.
Noel Stevens T 01392 353093 E [email protected] Industrial Ralph Collison T 01392 353091 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
800 500 8
700 7 400 600 6 600 390 (36)
(56) 7 (75.34) 500 300 5 305 300 300 6.75(72.65)
400 (28) (28) (28) 4 6 (64.58) 6 (64.58) 250 6.25 (67.27) 200 (23) 300 310 310 3 (29) (29) 200 2 190 200 100 100 (18) (19) 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • In absolute terms demand halved compared to • Supply remains broadly in line with previous • Headline rents will move up to £7.00 psf 2012. However the 2012 figure was inflated due to years. (£75.34 psm) for new build stock in the early a 500,000 sq ft (46,452 sq m) requirement from a • There is a good supply of serviced land ready for part of 2014. This is driven by demand for new supermarket. In real terms demand is up on 2012. development in prime locations around Exeter. stock and the increasing costs of delivering quality buildings. • The Ambulance Special Operations Centre agreed • Infrastructure works such as the Clyst Honiton terms on a 22,000 sq ft (2,044 sq m) building at Bypass which opened in October 2013 is helping • We expect to see a reduction in incentives on SkyPark. to improve transport links across the region. existing buildings in 2014 as the market improves and the development pipeline lags behind. • At Matford Green, VW agreed terms (subject • We predict speculative development will return to to planning) to lease a new 35,000 sq ft the market in 2014. (3,252 sq m) dealership. • GeoPost is finalising terms on a 60,000 sq ft (5,574 sq m) leasehold facility.
sq ft (sq m)
11 Alder King Market Monitor 2014 1. Ambulance Special Operations Centre, SkyPark, Exeter. Courtesy of St Modwen. 2. CGI of Volkswagen Showroom, Matford Green, Exeter. Courtesy of Eagle One. 2 3 3. Exeter College Technology Centre, Exeter. Courtesy of Stride Treglown.
Retail & Leisure Lee Southan T 01392 353090 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
250 30 50
25 200 40 28 (301) 20 150 30 40 (431) 25 (269.09) 25 (269.09) 25 (269.09)
200 (2,153) 15 220 (2,367.97) 40 (430.54) 23 (247.56)
100 200 (2,152.70) 200 (2,152.70) 200 (2,152.70) 20 10 27.5(296) 27.5(296) 50 10 5 17 (183) (86) 8 17 (182.99) 17 (182.99) 12 (118.40) 11 (118.40) 11 (118.40) 8 (86.11) 8 (86.11) 8 (86.11) 0 0 0 8 (86.11) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 High St. cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Exeter’s retail sector remains strong, with limited • In October 2013 Ikea announced plans to open • The food and beverage scene in Exeter continues voids filling quickly. a £60m store on the outskirts of the city. It has to trade well. New entrants in 2013 included • Demand again bucked the regional trend in the submitted planning permission and is looking to Cote Brasserie, Bill’s, Lloyd’s Kitchen, Brody’s city centre with new occupiers including The open in 2015. Breakfast Bistro and Urban Burger. White Company, Saltrock, Coral and Two-Seasons • The completion of the 23,000 sq ft (2,137 sq m) • Demand from gym operators continued as well as a high number of new independent Alphington Retail Park proved popular, with three throughout 2013; finding suitable stock to operators. out of four units completed or under offer to accommodate them proved problematic. • Rents remained stable with incentive packages national covenants. • Plans to redevelop the city centre bus station reducing as supply diminishes. • Secondary retail offerings proved strong with into a leisure and retail scheme are moving ever voids in the St Thomas Neighbourhood Centre closer to being finalised. transacting above the asking rents. • Discount retailer 99p Stores continued its expansion, completing on the D&B site at Exe Bridge Retail Park.
John Benson T 0117 317 1100 E [email protected] Investment Scott Rossiter T 01392 353089 E [email protected]
value of investment transactions £ms prime yields % investment by sector
175 8 2%
150 158.74 7 9% 125 26% 6 industrial 100 40% office 75 82.03 5 retail high street industrial 22% 50 63.36 retail out of town 52.85 office 40.42 4 25 retail high street other retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total volume of investment activity in • Our current view of prime yields is as follows: • The largest office transaction was the sale of 2013 was £52.85m. This is a fall from the level - Industrial 7% Peninsula House for £17m (NIY 6.75%). The office recorded in 2012, although this was impacted by a is let to South West Water for 17 years. - Office 7.5% single large retail warehouse transaction. • A significant retail transaction was the sale of the - Retail high street 6% House of Fraser store in the city centre for £7.15m - Retail out of town 6% (NIY 6.5%). The property is let to House of Fraser until 2038 and was purchased by Cordea Savills. • The Alphington Road Retail Park was sold for £13.8m (NIY 7.5%). The three purpose built retail warehouse units are let to B&Q, Iceland and Aldi with an AWULT of 9.75 years.
www.alderking.com 12 Gloucester 1
Offices Adrian Rowley T 01452 627133 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
225 400 18
200 16 200 350 175 14 (19) 300 (188) 17.5 150 12
250 17.5 (188.36) 17.5 (188.36) 17.5 (188.36) 17.5 (188.36) 125 250 10 130 200 (23) (12) 120 100 (11) 200 8 100 95 150 170 (19) 11.5 (124)
75 (9) (9) (16) 150 6 11.5 (123.78) 11.5 (123.78) 11.5 (123.78) 11.5 (123.78) 100 (14) 120 50 4 (11) 25 50 2
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • Overall take up was up on the previous • Generally the availability of stock remains low, • Headline rents remained constant at £17.50 psf year’s figure. particularly for Grade A office space. (£188.36 psm). • Significant transactions in 2013 included the • Partly as a result of the above, it is anticipated • The shortage of stock continues to apply a sale of the 25,000 sq ft (2,323 sq m) Building 4 that there will be renewed activity in design and downward pressure on incentives. Carter Court at Waterwells Business Park and the build opportunities. letting of the 7,000 sq ft (650 sq m) Building 1250 Lansdowne Court on Gloucester Business Park. • As in recent years, the majority of activity occurred out of town. However activity in the city centre has now increased.
Industrial Adrian Rowley T 01452 627133 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
700 1,200 7
600 6 600 1,000 (56) 500 5 800 6 (65)
400 4 6 (64.58) 6 (64.58) 6 (64.58) 6 (64.58) 400 600 625 (37) 300 (30) 3 300 300 (28) 275 (28) 400 450 200 (26) 400 (42) 2 (37) 350 200 (33) 275 100 (26) 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Overall take up is higher than the previous year’s • Generally the availability of stock remains low in • Headline rents remained constant at £6.00 psf figure. most sectors of the industrial market. (£64.59 psm). • Of key importance is the new build development • The total supply increased on last year’s figure • There is continued pressure on incentives as at Quedgeley West where some 75,000 sq ft primarily due to the new availability of two large market conditions harden. (6,968 sq m) in two buildings is being built for warehouse buildings which are being vacated by Lister Petter and Gardner Bros. SuperGroup. • It is anticipated that there will be further design • Glenmore committed to the region’s first and build activity continuing through 2014 in speculative industrial development for five response to the shortage of Grade A space. years with the construction of Phoenix House at Waterwells Business Park. This 21,900 sq ft (2,035 sq m) development is due for completion in January 2014.
sq ft (sq m)
13 Alder King Market Monitor 2014 1. 4 Carter Court, Waterwells Business Park, Gloucester. 2. Morrisons supermarket, Triangle Park, Gloucester. Courtesy of Gloucester Citizen. 2 3 3. CGI of Lister Petter’s new unit at Quedgeley West. Courtesy of St Modwen.
Retail & Leisure John Hawkins T 01452 627135 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
175 25 35
150 30 20 25 (269) 125 25 25 (269.09) 25 (269.09) 25 (269.09) (344) 32 15 32 (344.45) 32 (344.45)
100 22 (236.80) 20
75 15 135 (1,453.07) 135 (1,453.07) 10 120 (1,291.62) 120 (1,291.62)
50 100 (1,076) 100 (1,076) 10
100 (1,076.40) 100 (1,076.40) 100 (1,076.40) 100 (1,076.40) 5 15 (161.45) 15 (161.45)
25 5 12 (129) 9 (97) 12 (129.16) 12 (129.16) 12 (129.16) 11 (118.40) 8 (86.11) 9 (96.88) 9 (96.88) 0 0 0 10 (107.64) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Eastgate St. Kings Walk cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • The opening of the new M&S on Eastgate Street • Significant progress has been made at Triangle • At Gloucester Quays, the new Cineworld 10 screen has increased footfall to the city centre. Park where the new Morrisons store and petrol cinema has opened. • The imminent arrival of TK Maxx to the covered station is now open and trading. Pre-let terms • The new cinema has provided the catalyst for the Eastgate Shopping Mall will further rejuvenate have also been agreed with Costa Coffee. arrival of new restaurants including Chimichanga, the city centre. • At Whittle Square, Barnardos is fitting out a new Zizzi’s and Ed’s Easy Diner. • The City Council has signed an exclusivity 2,000 sq ft (186 sq m) store leaving just two • JD Wetherspoon is also opening in the Docks agreement with Stanhope on proposals for the vacant units. having acquired the former Coots café off Kings Quarter redevelopment and adjacent bus • At St.Oswalds Park, Wren Kitchens has leased half Llanthony Way. station. of the former Comet store, and planning consent • Within the health and fitness sector, demand has been granted for a new McDonalds restaurant remains strong from budget gym operators who and drive-through. continue to search for the right opportunities.
John Benson T 0117 317 1100 E [email protected] Investment Adrian Rowley T 01452 627133 E [email protected]
value of investment transactions £ms prime yields % investment by sector
105 8 1%
90 91.9 7 12% 17% 75 industrial 6 60 62.98 office 57.2 20% 45 retail high street 5 50% industrial 40.29 41.6 retail out of town 30 office 4 other 15 retail high street retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The volume of investment sales in Cheltenham • Our current view of prime yields is as follows: • One of the largest industrial transactions in and Gloucester increased slightly to £41.6m. - Industrial 7% the region in 2013 was the sale of Bamfurlong Industrial Estate in Cheltenham. The property - Office 7.5% sold for £3.37m (NIY 6.5%). The yield reflected - Retail high street 7% the ground lease nature of the income. - Retail out of town 6.25% • Twyer House, Gloucester was bought for £9.65m (NIY 7%) by Greenridge Corporation. The 1960s office building is let to HM Land Registry until 2067. • The most significant retail warehouse transaction was the sale of The Range unit, Tewkesbury Road, Cheltenham for £6.03m (NIY 8%). The property is let to CDS superstores International Ltd until June 2020.
www.alderking.com 14 Newport
Offices Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
250 500 20
446 460 200 400 (41) (43) 386 15 172 340 (36) 345
150 (16) 300 (32) (32) 16 (172)
10 16 (172.22) 16 (172.22) 16 (172.22) 15 (161.45) 15 (161.45) 15 (161.45)
100 200 12 (129) 99 13 (139.93) 13 (139.93) (9) 80 78 5 50 (7) (7) 100 43 (4) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • 2013 take up was half that of 2012 and 20% down • The amount of vacant space reduced as a result • Headline rent was maintained in the city centre on the five year average. of lack of development and continued take up of with the letting to the Passport Office at Nexus • The trend is turning more towards the city secondary stock. House. The transaction represented the largest centre and away from fringe locations such as • Similar to Cardiff, there is a real shortage of letting for the year at 23,868 sq ft (2,217 sq m). Celtic Springs. Admiral’s new building is nearing Grade A stock in the city centre. • Out of town rents have suffered with ample completion and should stimulate some much • The number of residential conversions is quality space available in several locations. needed activity in the area. expected to increase reducing availability still • One of the largest transactions was the sale of further in 2014. Shire Hall, a residential conversion comprising 17,894 sq ft (1,662.4 sq m).
Industrial Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
900 1,750 7
800 1,500 6 700 1,250 5 600 652 (61) 1,192 4.5 4.5 500 1,000 1,080 1,104 4 (111) (48.44) (48.44) 4 4 4 (100) (103) 400 (43.05) (43.05) (43) 417 407 404 750 789 3 385 720 300 (39) (38) (38) (73) (36) 500 (67) 2 200 250 1 100
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • 2013 saw a reduction in occupier demand • Supply fell by 35% when compared to the five • Rents remained static in 2013. compared to the five year average of year average and is directly attributed to take up • As supply decreases, we expect upwards 575,000 sq ft (53,419 sq m). and a lack of new development. pressure on rental levels on better quality stock. • Over 90% of deals were less than 10,000 sq ft • 76% of stock comprises units of less than (929 sq m) with a growing number of freehold 10,000 sq ft. Units of this size are proving sales and requirements. attractive to owner occupiers. • Notable deals included the sale of the former • There is a limited supply of modern quality units SPTS site at Imperial Park comprising 89,500 where the tenant demand remains. sq ft (8,315 sq ft) to G24i. Reevesland Industrial Estate continued to be active with the letting of 52,000 sq ft (4,831 sq m) to Bisley.
sq ft (sq m)
15 Alder King Market Monitor 2014 1. Admiral House, Newport. 1 2 2. Wessex Garages, Newport Retail Park.
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
150 35 25
125 30 20 25 100 15 20 18 (194) 20 (215.27)
75 130 (1,399.26) 25 (269) 27 (290.61) 125 (1,345.44) 125 (1,345.44) 15 18 (193.75) 18 (193.75) 10 17.5 (188.36)
50 23 (247.56) 10 22 (236.80) 20 (215.28) 12 (129) 80 (861.08)
5 12 (129.16) 12 (129.16) 12 (129.16)
25 11 (118.40) (86) 8
55 (592) 5 10 (107.64) 8 (86.11) 8 (86.11) 8 (86.11)
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • With nearly a quarter of the city’s retailing units • Spytty Retail Park continues to strengthen • Spytty Retail Park recently announced new vacant, the city has welcomed the news that with lettings for a new Wessex Hyundai Car lettings to Harvester and Pizza Express funding is in place to commence construction dealership and interest in the remaining vacant which further enhances the out-of-town offer of the revamped Friars Walk scheme which will units on the scheme which includes the proposed competing with the city centre. be anchored by Debenhams and Cineworld. The redevelopment of the former Megabowl. • In the city centre, notable transactions included scheme is due to open in autumn 2015. • Notable deals in 2013 included What! Stores new signings at Friars Walk to Nando’s, Cosmo, • Next and Top Shop have also decided to move purchasing the former Focus DIY store in Frankie & Benny’s, Prezzo and Chiquitos. back into the city into the same scheme. Rogerstone and Halfords taking just over 20,000 • The Celtic Manor Resort will be hosting the 2014 sq ft (1,858.1 sq m) on 28east Retail Park. NATO Summit and has already announced plans for a new international convention centre.
John Benson T 0117 317 1100 E [email protected] Investment Owen Young T 029 2038 1996 E [email protected]
value of investment transactions £ms prime yields % investment by sector
35 9
30 8 18% 25 25.6 office 7 20 6% retail high street 76% 15 other 16.65 6 industrial 12.93 10 office 8.30 8.9 5 5 retail high street retail out of town 0 4 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total value of investment transactions in • Our current view of prime yields is as follows: • There were several significant office investment Newport and the surrounding area was £8.9m - Industrial 8% transactions over the year. Clarence House, a in 2013. The total transaction figures show a 7% multi-let 11 storey office tower, sold at auction for increase on the 2012 figures. - Office 8.5% £3.95m (NIY 18.4%). - Retail high street 7.75% • Columbus House on Langstone Business Park - Retail out of town 7% sold for £2.4m (NIY 13.5%). This modern office building was let to The Secretary of State for Transport and Local Government and Regions with 4.5 years unexpired.
www.alderking.com 16 Plymouth 1
Offices Noel Stevens T 01392 353093 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
250 500 20
200 400 15 360 330 150 300 325 (33) (31) 310 145 (30) 15 (162) 15 (162) 15.5 (167) 16 (172.22) 16 (172.22) (13) 275 (29) 10 16 (172.22)
(26) 15.5 (166.83) 15.5 (166.83) 15.5 (166.83) 15.5 (166.83) 100 105 200 95 95 (10) 90 (8) (9) (9) 5 50 100
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • There were few substantial requirements in 2013. • There continues to be a lack of Grade A space. • Second hand stock dominates the market and • The service and public sectors predict little new • Supply overall far outstrips demand. rental levels have remained consistent with 2012. demand. • There are no major schemes planned due to the • There are the first signs of a reduction in • Conversion of space to residential under weak market and lack of rental growth. incentives. Permitted Development Rights could spark renewed demand.
Industrial Noel Stevens T 01392 353093 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
500 3,000 7 500 (46) 2,500 6 400 5 2,000
300 (64) 5.95 4 290 (27) 1,500 5.95(64.04) 5.95(64.04) 5.95(64.04) 5.95(64.04) 250 1,400 3 200 (23) (130) 200 1,000 160 (19) 800 1,000 2 (93) 715 720 100 (15) (74) (66) (67) 500 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Take up returned to more normal levels in 2013 • The supply picture remains similar to that of 2012 • Headline rents remained static at £5.95 psf following the 385,000 sq ft (35,768 sq m) sale but, importantly, is down on the peak figure of (£64.04 psm). and demolition of the Toshiba premises in 2012. 2010. • Incentives will continue to be strong for tenants The underlying trend shows positive signs for the • Supply is heavily weighted towards the smaller with good covenants seeking 3+ year leases. market. end of the market. Only 10% of available buildings • Plymouth Enterprise Park has seen good demand are in excess of 10,000 sq ft (929 sq m) in size. since its inception with lettings to Vi Spring, West • As in 2013, the largest single facility on the Country Storage Solutions, Plymouth Karting and market is the former St Ives Print Factory at Fulcrum Power Generation. Langage. • DX Mail agreed terms to lease a 22,000 sq ft (2,044 sq m) building at Langage Science Park for mail distribution.
sq ft (sq m)
17 Alder King Market Monitor 2014 1. Drake Circus, Plymouth. 2. Sutton Harbour, Plymouth. 2 3 3. Tamar Bridge, Plymouth.
Retail & Leisure Lee Southan T 01392 353090 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
250 30 20
200 25 15 20 18 (193.74) 150 18 (193.74) 15 (161) 15 10 (?) 20.5 15 (161.45) 15 (161.46) 15 (161.46) (140) 13
100 22.5 (242.18) 22.5 (242.18) 22.5 (242.18) 22.5 (242.18) 180 (1,937.43) 175(1,883.61) 175(1,883.61) 13 (139.93) 13 (139.93) 13 (139.93)
150 (1,615) 10 12.5 (134.54) (86) 8 150 (1,614.60) 5
50 10 (107.64) 5 8 (86.10) 8 (86.10)
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Retail trends in Plymouth continued much as • Construction of the new £800,000 retail • Higher Home Park, Akkeron Group’s £50m retail they did in 2012. Take up outside Drake Circus is scheme at Woolwell was completed, with pre-lets and leisure scheme surrounding Plymouth Argyle slow, with supply still outstripping demand and agreed to Companion Care veterinary practice, Football Club, has been granted planning consent. many retail units remain vacant for long periods Barnardo’s and a Domino’s Pizza outlet. The 492,216 sq ft (45,729 sq m) development of time. • HomeSupply Retail took 5,000 sq ft (464 will include a hotel, cinema, ice rink and • Discount retailing provided the most activity, with sq m) of ground floor retail space at Gdynia Way complimentary retail and food offerings. Poundland opening its second store in the city and Evans Cycles took 7,500 sq ft (697 sq m) at • Gary Rhodes opened his restaurant Rhodes at and 99p Stores looking for its second. Charity Charles Cross. The Dome on Plymouth’s quayside. It has proved occupiers and independent discount clothing • Secondary retailing in Mutley Plain proved a popular venue providing restaurant and bar retailers also proved acquisitive in 2013. popular with many major brands already facilities. represented and new supermarket entrants taking premises over the last 12 months.
John Benson T 0117 317 1100 E [email protected] Investment Scott Rossiter T 01392 353089 E [email protected]
value of investment transactions £ms prime yields % investment by sector
350 9 3%
300 8 9% 278.2 250 industrial
7 29% office 200 retail high street 150 49% 6 retail out of town industrial 10% 100 other office 86.43 5 50 retail high street 26.33 13.62 9.63 retail out of town 0 4 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 value of investment transactions prime yields investment by sector • There was a considerable fall in the volume of • Our current view of prime yields is as follows: • There were a number of small office investment investment activity in Plymouth in 2013. The total - Industrial 7.25% transactions in Plymouth in 2013. Hyde Park volume of investment transactions was £9.6m House, a multi-let mixed use retail and office compared to £26.3m in 2012. - Office 8% block on Mutley Plain, was sold for £660,000 - Retail high street 7.25% (NIY 16.5%). - Retail out of town 6.5% • There were two large retail warehouse transactions in Plymouth. At Laira Bridge Retail Park, two units let to Carpetright and Go Outdoors sold for £6.6m (NIY 7.88%). Sugar Mill Retail Park, multi-let and anchored by The Range, sold for £4.7m (NIY 9.19%).
www.alderking.com 18 Swansea 1
Offices Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
250 600 20 566 500 540 200 521 (53) (50) 490 (48) 473 15 (46) 400 (44) 150 163 (15) 300 10 (156) 14.5
100 13.75(148) 108 108 14.5 (156.07) 14.5 (156.07) 14.5 (156.07) (10) (10) 200 (116) 10.75 68 5 11.5 (123.78) 11.5 (123.78) 50 10.75(115.71) 10.75(115.71) 54 (6) 100 (5)
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • Take up reduced to 60% of the five year average • Availability decreased slightly due to a lack of • There was no growth in headline rents during with less than 35 occupier transactions. Only one new development and the demolition of Oldway 2013. occupation exceeded 5,000 sq ft (464.6 sq m). House in the city centre. • With little modern accommodation available in • 95% comprised out of town or city centre fringe • Similar to Cardiff and Newport, there is a SA1 and the city centre, headline figures should transactions, many in and around Swansea shortage of Grade A stock with little now be maintained into 2014. Enterprise Park. available on the SA1 waterfront. • Out of town rents and incentives should continue • Notable deals in 2013 included Fieldbay Ltd • Over 80,000 sq ft (7,432 sq m) still remains at at the same level through 2014. acquiring 5,300 sq ft (492.4 sq m) at Chestnut Crucible Park, Swansea Vale, since first becoming House and the British Red Cross Society acquiring available in 2008. Kidwelly House, both on the Enterprise Park.
Industrial Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
1,200 3,500 7
1,000 3,000 6 2,938 2,500 (273) 2,755 2,755 5 800 (256) (258) 795 2,315 4.20 4.35 4.20 4.20 4.20 (74) 2,000 (215) 4 600 (45.21) (46.82) (45.21) (45.21) (45) 1,724 1,500 3 (160) 400 459 472 461 (43) (44) (43) 1,000 2
200 500 1 180 (17) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • 2013 saw a substantial decrease in take-up • Supply fell in 2013, accounted for by the • Over the past three years rental levels have against a backdrop of positive agent sentiment. demolition of obsolete buildings and geographical remained unchanged. • The absence of any particular ‘big shed’ re-categorisation of property along parts of • The high proportion of existing secondary stock transactions within the county boundary has Fabian Way. and the limited amount of new stock being been offset with some larger transactions along • Stock providing less than 10,000 sq ft (929 sq m) brought to the market have hindered any rental Fabian Way and into Neath and Port Talbot. These accounts for approximately 73% of all available growth. neighbouring deals have accounted for over stock. 600,000 sq ft (55,741.8 sq m).
sq ft (sq m)
19 Alder King Market Monitor 2014 1. Ethos House, Swansea. 2. Harbourside, Port Talbot. 2 3 3. CGI of Swansea University’s Bay Campus. Courtesy of St Modwen.
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
300 70 25
250 60 20 50 200 15 40 (215) 20
150 20 (215.27) 30 10 17 (182.99) 17 (182.99)
100 15 (161.45) 12 (129) 20 35 (377) 40 (430.54) 9 (97) 12 (129.17) 12 (129.17) 35 (376.74) 35 (376.74) 35 (376.72) 5 11 (118.40) 11 (118.40) 50 10 12.5 (134.54) 9 (96.88) 10 (107.64) 10 (107.64) 110 (1,184) 110 (1,184) 135 (1,453.07) 100 (1,076) 115 (1,237.80) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3 zone A headline rent out of town rent leisure headline rent • Uncertainty surrounds the future regeneration • There was no growth in out-of-town rents in 2013. • A3 rents have once again improved with the of the town centre with the withdrawal of • Notable deals include Oak Furniture Land taking letting of the former La Tasca premises on Hammerson, the Council’s latest development the former Eddershaws property on Phoenix Way Salubrious Place to SmokeHaus. partner. Together with other regional economic and One Stop setting up stores on both Neath • Swansea University’s £450m second campus factors, this has naturally had a negative impact Road and Pentregethin Road. off Fabian Way should provide a shot in the arm on demand. • Secondary and tertiary properties continue to to the city centre with the first £150m phase • On the positive side, Hammerson is planning trade at realistic prices, many through auction expected to be completed by the summer of to revamp its 240,000 sq ft (22,296 sq m) Parc houses. 2015. Tawe scheme with a new anchor tenant.
John Benson T 0117 317 1100 E [email protected] Investment Owen Young T 029 2038 1996 E [email protected]
value of investment transactions £ms prime yields % investment by sector
140 8 3% 3%
120 7 113.9 100 19% 6 industrial 80 office 60 5 retail high street industrial 75% 40 47.7 other 49.64 office 4 20 retail high street 8.65 17.9 retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total volume of investment transactions • Our current view of prime yields is as follows: • One of the most significant investment in Swansea was £49.64m. This is a significant - Industrial 7.75% transactions in Swansea was M&G’s commitment increase on the 2012 figures and is largely to provide £32m of development finance for attributable to one single transaction. - Office 7.75% student accommodation at Swansea University. - Retail high street 7.25% M&G acquired a long leasehold interest which - Retail out of town 6.5% will provide a 45 year rental income linked to inflation. • A large retail investment sale was a parade on Princess Way which is multi-let with an AWULT of six years and sold for £5.3m (NIY 12.6%). • In nearby Bridgend, the 300 acre Bridgend Industrial Estate sold for £20m (NIY 9%).
www.alderking.com 20 Swindon 1
Offices James Gregory T 01793 428106 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
400 1,600 20
350 1,400
300 1,200 1,270 1,306 1,320 15 (118) (121) (123)
250 1,000 1,150 (188) 17.5 1,020 18.5 (199.12) 18.5 (199.12)
(107) 15 (161) 200 800 (95) 10 16 (172.22) 16 (172.22) 205 199 (19) 15.75(169.53) 15.75(169.53) 15.75(169.53) 15.75(169.53) 150 170 (18) 600 (16) 131 100 400 5 (12) 85 50 200 (8) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 town centre out of town demand supply headline rent • There was an overall improvement in take up, • The overall supply remained relatively stable as • The headline rent for out of town offices with significant lettings at Washington House, large second hand offices at UK Life Centre and increased, reflecting the lack of good quality Lydiard Fields to Openwork, Wakefield House, Delta Office Park have come to the market. stock. Aspect Park to Nationwide and Station Square in • There was a gradual reduction in good quality • Town centre rents continued to struggle but the town centre to PrePay Technologies. accommodation with no brand new office space there were some significant lettings in 2013. • The majority of activity took place out of town currently available out of town. • Rent free periods continue to be granted in with less than 25% of all transactions being in the • There was no speculative development. favour of the tenant. town centre or Old Town. • Occupiers are increasingly seeking better • The number of transactions was similar to quality stock. 2012 but the average size of transaction was significantly larger. • Most transactions were of a leasehold nature rather than freehold.
Industrial James Gregory T 01793 428106 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
1,800 1,823 3,500 7 1,600 (169) 3,000 6 1,400
2,500 2,625 5 6.75(73) 2,512 1,200 (244) (233) 2,302 6.75(72.65) 6.75(72.65) 6.75(72.65) 6.75(72.65) 1,184 2,000 4 1,000 1,043 (127) (214) (97) 986 1,900 1,800 800 (92) 1,500 (176) (167) 3 600 616 1,000 2 400 (57) 500 1 200
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Take up has reached the long term average • There is now a real shortage of large buildings • Rents for second hand accommodation have level with significant transactions at the Oxford available for immediate occupation with the risen in some cases where competitive situations Building, Europa to KBR and Groundwell need to bring forward deliverable development have arisen. Distribution Centre, Groundwell to Network Rail. becoming urgent. • Occupiers understand the need to pay for early • The key driver to securing occupiers continues • There are very few good quality opportunities for break clauses. to be ensuring properties are in good condition the mid-range occupier. • Rental incentives have stabilised and in some and capable of immediate occupation to satisfy • The supply of all sizes has steadily been eroded. cases moved in favour of landlords. contract-led requirements. • 2013 saw a marked increase in freehold requirements and there are still a number of unsatisfied ones.
sq ft (sq m)
21 Alder King Market Monitor 2014 1. Washington House, Lydiard Fields, Swindon. 2. Oxford Building, Swindon. 2 3 3. Interface Business Park, Royal Wootton Bassett.
Retail & Leisure Alison Williams T 01793 428102 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
250 35 20
30 200 15 25 18 (194) 18 (193.74) 18 (193.74) 18 (193.74) 18 (193.74)
150 28 (301) 20
28 (301.38) 28 (301.38) 28 (301.38) 28 (301.38) 10 15 100 (118) 11 175(1,883.61) 150 (1,615) 170 (1,829.80) 170 (1,829.80) 11 (118.40) 11 (118.40) 11 (118.40) 11 (118.40) 10 9 (97) 5 150 (1,614.58)
50 9 (96.87) 9 (96.87) 9 (96.87) 9 (96.87) 80 (743) 80 (743) 5
0 100 (1,076.35) 100 (1,076.35) 100 (1,076.35) 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Regent St. Brunel Centre cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • The Regent Circus scheme is well advanced and • Fast food/convenience operators continue • McArthurGlen/Henderson Global Investors are will open in October 2014. Occupiers already to look at main arterial routes, with another creating an additional 50,000 sq ft (4,645 sq m) include Morrisons, Cineworld, Nando’s, Ask, McDonalds now proposed on Great Western Way. of accommodation in 30 new shops to add to the Prezzo, Coal Grill and Jimmy’s Restaurants. • A new Morrisons supermarket and three other existing 90 retail and food outlets. The development is eagerly awaited and retailers will open early in 2014 opposite Edison • The Oasis Leisure Centre is being refurbished by generating further new enquiries in and around Park at Dorcan. Moirai and plans continue for the development Regent Street. • M&S Simply Food will open a 10,000 sq ft of a large music arena, indoor ski slope and hotel • There has been a renewed promotion of the (929 sq m) outlet at Mannington roundabout in complex. Brunel Centre. January and Waitrose will complete its 40,000 sq ft (3,716 sq m) store at Wichelstowe in May.
John Benson T 0117 317 1100 E [email protected] Investment James Gregory T 01793 428106 E [email protected]
value of investment transactions £ms prime yields % investment by sector
70 9 1% 67.2 60 62.5 8 9% 50 industrial 48.5 7 office 40 38.2 35% 55% retail high street 30 6 other industrial 20 office 5 10 retail high street 3.77 retail out of town 0 4 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • There was a significant increase in the value of • Our current view of prime yields is as follows: • One of the largest investment transactions in investment transactions in Swindon over the last - Industrial 7.25% Swindon over the last year is the sale of the year, a substantial rise from the total value of Iceland Distribution Centre for £29.3m (NIY transactions in 2012. – Office 8% 7.15%). The warehouse is let to Iceland Foods Ltd – Retail high street 7.25% until June 2027. – Retail out of town 6.5% • A significant retail sale was the high street retail property trading as Sports Direct and Specsavers on Regent Street for £5m (NIY 11%). • 1 & 2 Walnut Court, Kembrey Park sold for £12m (NIY 9.26%.) The offices are let to Thames Water Utilities Ltd until August 2022.
www.alderking.com 22 Taunton 1
Offices Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
150 200 18
175 16 125 120 168 170 14 150 164 (16) 165 156 17 (183) (11) (16) (15) (15)
110 16.5 (178) 100 (14) 12 17 (182.98) 17 (182.98) 17 (182.98) 17 (182.98) 101 100 (10) 125 (9) (9) 90 10 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 75 (8) 100 8 14 (150.69) 75 50 6 50 4 25 25 2
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 town centre out of town demand supply headline rent • The market remained relatively subdued • Supply has reduced during the year following a • No new builds have been undertaken for a throughout 2013, with modest take up both in and number of lettings of between 5,000 to 10,000 number of years. out of town. sq ft (464 – 929 sq m). • Rental levels for poor quality accommodation • There have been no new builds for a number • There is a reasonable mix of town centre and out fell further during the year, while levels for good of years, despite a lack of available Grade A of town buildings currently available, although the quality accommodation have been more stable. accommodation in the town. majority of the overall supply is within the town • Incentive levels follow a similar pattern with good • Demand for freehold property continued to be centre (55%). quality stock seeing lower incentive levels than in weak with funding constraints and a general lack competing towns and cities. of confidence from occupiers. • There has been much talk of potential requirements from public sector bodies but these have so far failed to materialise into take up.
Industrial Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
500 300 8
279 270 7 250 (26) (25) 400 250 250 6
(23) (23) 7 (75) 200 220 300 (20) 5 306 6.6 (69.96) 6.5 (69.96)
(28) 150 4 6 (64.58) 6 (64.58) 250 200 200 (23) 3 180 100 (19) 160 (17) 2 100 (15) 50 1
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Following delays for much of 2013 the • Supply decreased by around 12% with very little • No new builds have been undertaken for a construction of Hinkley Point C is likely to start in new space coming to the market. number of years. late 2014, sparking optimism in the marketplace. • The lack of good quality premises continues to • Rental levels are generally stable across all types However, it is difficult to gauge the extent of any constrain the market. and sizes of accommodation. increase in demand along the M5 corridor. • While we have seen speculative development • There is some prospect of modest rental growth • There remains latent demand within the town in the neighbouring towns of Wellington and in 2014, although this will be dependant on itself, but this has not resulted in any significant Bridgwater, Taunton remains bereft, in no further new stock coming to the market. changes to take up, due in part to the quality and small part due to a lack of deliverable allocated size of available stock. employment land. • Enquiries are generally for leasehold accommodation with very few freehold transactions occurring during 2013.
sq ft (sq m)
23 Alder King Market Monitor 2014 1. Knightstone Building, Blackbrook Business Park, Taunton. 2. Riverside Chambers, Taunton. 2 3 3. Hunts Court, Taunton.
Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
175 25 25
150 20 20 125
15 15 100 19 (205) 19 (204.51) 19 (204.51) 19 (204.51) 19 (204.51) 75 10 10 15 (161) 15 (161.45) 15 (161.45) 90 (968) 90 (968) 90 (968) 90 (968)
50 12 (129) 110 (1,183.99) 12 (129.16) 5 5 12 (129.16) 12 (129.16) 12 (129.16) (86) 8
25 8 (86.11) 8 (86.11) 10 (107.64) 10 (107.64)
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 East St. Old Market Centre health & fitness A3/A4 cinema zone A headline rent out of town rent leisure headline rent • Rent levels for prime and secondary have • Costa Coffee has opened a new drive-thru unit • Taunton Deane Borough Council purchased the remained consistent throughout the year. on the Hankridge Retail Park. closed Brewhouse Theatre, which will re-open in • The amount of void space in Fore Street and • Several new ‘convenience’ format supermarkets April 2014. North Street has reduced marginally, although opened in 2013, although non-food retail was • There has been little new activity within the past elsewhere voids have increased in 2013. less active. 12 months. • RBS bought the Orchard Shopping Centre and is proposing a 105,000 sq ft extension, subject to the scheme being viable.
John Benson T 0117 317 1100 E [email protected] Investment Andrew Maynard T 01823 444879 E [email protected]
value of investment transactions £ms prime yields % investment by sector
70 8
60 7 50 33% 6 industrial 40 44% retail high street 36.10 30 31.34 5 other industrial 20 23% 21.45 office 4 10 14.03 retail high street 6.03 retail out of town 0 3 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • The total volume of investment transactions • Our current view of prime yields is as follows: • One of the largest high street retail transactions in 2013 fell to £21.45m for 2013. Investment - Industrial 7.25% of 2013 was the sale of 45/46 North Street for activity in the town has been concentrated in the £1.625m (NIY 6.27%). The property is let to industrial and retail sectors, with limited office - Office 7.5% Barclays Bank until 2027 with a tenant break in and retail warehouse transactions. - Retail high street 6.25% 2022. - Retail out of town 6.5% • Another significant investment transaction was the sale of a 64 bed Travelodge hotel for £2.56m (NIY 6.57%). The property is let to Travelodge Hotels Ltd with a term certain of 29 years. • In nearby Bridgwater, a portfolio of seven industrial estates sold for £8.5m (NIY 11.1%).
www.alderking.com 24 Truro 1
Offices Tom Duncan T 01872 227005 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
60 250 16 58 14 50 (5) 50 50 200 200 200 (5) (5) 12 40 (19) (19) 40 170 10 150 (16)
(4) 150 (118) 11 30 (14) 8 11 (118.40) 11 (118.40) 125 12.5 (134.54) 100 (12) 10.5 (113.02) 25 6 (91) 8.5 20 (2) 4 8.5 (91.49) 50 10 2
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 city centre out of town demand supply headline rent • Take up reduced again in 2013 compared to • There is an over-supply of secondary • Rents remain in line with 2012 levels, with a previous years. accommodation above ground floor level without continued preference for modern city centre • The majority of take up occurred in the first half a lift or car parking or outside of the city centre. accommodation. of the year. • Potential redevelopment opportunities as a result • Tenants continue to seek shorter lease terms or • Demand was affected by the lack of availability of of Permitted Development of B1 offices to C3 tenant only options to break and incentives in good quality city centre accommodation with car residential dwellings passed in May 2013 for a the form of rent free periods or stepped rental parking. period of three years. arrangements. • Several large requirements remain unsatisfied • City centre offices are now being developed for which if satisfied should result in increased take other use types. For example the 71,363 sq ft up figures in 2014. (6,630 sq m) Old County Hall is to be redeveloped for use as a hotel.
Industrial Tom Duncan T 01872 227005 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
350 600 10
300 500 8 480 250 400 (45) 400 380 6 200 8 (86.11)
(37) 7 (75) 200 300 (35)
(19) 7 (75.34) 7 (75.34) 7 (75.34) 150 4 200 100 200 90 180 (19) 80 (17) 2 50 (8) 100 60 60 (7) (6) (6) 0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Take up of space increased significantly in 2013 in • Supply significantly reduced from levels • Headline rents in Truro were in line with levels comparison to 2012 figures. witnessed in previous years. witnessed in 2012, although there were a limited • The size of the market is such that a single • There is a shortage of availability of new units number of transactions in the city itself. transaction of a larger unit can have a significant with good A30 access. • Rent levels for 2014 are uncertain, due to the percentage impact on the figures reported. • Supply will be bolstered with the speculative inconsistency of rent achieved in 2013 deals. • Enquiry levels increased with a preference for development of 16,344 sq ft (1,518 sq m) of quality, modern units with good access to the industrial space at Quintdowns Business Park A30. near Newquay.
sq ft (sq m)
25 Alder King Market Monitor 2014 1. Brunel Business Park, St Austell. 2. Old Post Office, Falmouth. 2 3 3. Quintdowns Business Park near Newquay.
Retail & Leisure Tom Duncan T 01872 227005 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
175 25 25
150 20 20 125 25 (269.09) 25 (269.09) 15 15 (215) 20 (215) 20 100 (215) 20 20 (215.27) 20 (215.27) 20 (215.27) 20 (215.27) 145 (1,560.71) 75 10 10 125(1,345.5) 125(1,345.5) 110 (1,184) 110 (1,184) 50 5 5 13 (139.93) 25
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Pydar St. A3/A4 zone A headline rent out of town rent leisure headline rent • Vacancy rates in central Truro increased in 2013 • Truro has seen limited out of town activity, with • There was little leisure activity in 2013 with the although they remain well below the national the exception of Home Bargains taking the exception of Old County Hall which is due to be average. former JJB unit at Threemilestone Retail Park. developed as a flagship 40 bedroom hotel and • The White Company became the latest addition • Headline rents remain in line with 2012. spa. to the city centre. • Food store requirements in Truro remain • Progress on the proposed Stadium for Cornwall • Availability of large prime accommodation is unsatisfied. remains stalled. increasingly limited.
John Benson T 0117 317 1100 E [email protected] Investment Tom Duncan T 01872 227005 E [email protected]
value of investment transactions £ms prime yields % investment by sector
60 9 3%
50 8
40 42.75 7 office 30 retail high street 6 97% 20 industrial office 14.76 5 10 retail high street 8.89 6.94 0 retail out of town 0 4 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • There was a significant increase in the volume of • Our current view of prime yields is as follows: • The most significant investment deal in Truro investment transactions in Truro in 2013 totalling - Industrial 7.75% in 2013 was the sale of Lemon Quay for £40m. £42.75m. A significant proportion was from a Tenants of the multi-let retail parade include single transaction. - Office 8% Marks & Spencer and Debenhams. - Retail high street 6.5% • The largest office investment transaction in Truro - Retail out of town 6.5% was the sale of the detached office building, Elizabeth House, for £1.46m (NIY 7.75%).
www.alderking.com 26 Yeovil
Offices Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
60 150 20 60 (6) 50 125 15 40 100 105 40 (10) 90 (4) 35 85 82 (8)
30 75 10 (140) 14 (3) (8) (8) 15 (161.45) 15 (161.45) 15 (161.45) 15 (161.45)
30 (140) 13 (3) 73 20 50 (7) 17 5 10 (2) 25
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 town centre out of town demand supply headline rent • A number of buildings within the town centre • Supply has reduced due to a combination of • No new builds have been undertaken for a have been purchased for conversion to residential purchases for conversion to residential and number of years. accommodation. reasonable activity in the sub 3,000 sq ft size • Rental levels for good quality stock stabilised • AgustaWestland is refurbishing a building on its range. during the year. main site to provide 50,000 sq ft (4,645 sq m) of • The refurbished accommodation at Maltravers • The market is however still polarised with older office accommodation. House let well and quickly during 2012/13. stock being significantly cheaper. • A number of occupiers have moved from the town • Secondary stock remains challenging, especially centre to the western outskirts of the town. within the town centre.
Industrial Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
300 300 12 280 250 250 (26) 10 240 239 230 230 220 (22) 200 211 (22) 215 (21) 200 (21) 8 (20) (20) (20) 191 150 150 (18) 6 150 (14) 7.5(80.73) 100 100 4 7 (75.34) 6.5 (70) 6.5 (69.97) 6.5 (69.97) 50 50 2
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
demand supply headline rent • Proposed changes on the AgustaWestland • Supply fell sharply during the year due to the • No new builds have been undertaken for a main site have resulted in several large scale increase in demand and transaction levels number of years. requirements in the town, which are yet to be throughout the year. • Rental levels for good quality stock remained satisfied. • There is very little good quality freehold stable over the course of the year. • Demand strengthened during the year, with an accommodation within the market. This will • Given the imbalance in demand and supply, there increase in demand for freehold accommodation. increase the likelihood of new build over coming is likely to be pressure on rents and prices for • The majority of smaller requirements are from months. good quality buildings within the town, especially local manufacturing companies, reinforcing the • A lack of larger format buildings has been a on the western outskirts. strength of the town’s active manufacturing and feature of the market for the past couple engineering sectors. of years and the paucity of units over 50,000 sq ft (4,645 sq m) remains a constraint within the marketplace.
sq ft (sq m)
27 Alder King Market Monitor 2014 1. Maltravers House, Yeovil. 1 2 2. Quedam Shopping Centre, Yeovil.
Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
150 30 20
125 25 15
100 20 18 (193.74) 16 (172) 17 (182.99)
75 15 23 (248) 10 15 (161.45) 15 (161.45) 23 (247.57) 23 (247.57) 12 (129) 13 (139.93) 20 (215.27) 20 (215.27) 50 10 12 (129.16) 12 (129.16) 12 (129.16) 90 (968.72)
5 (86) 8 8 (86.11) 8 (86.11) 8 (86.11) 10 (107.64) 80 (861.08)
25 70 (753.48) 70 (753.48) 5 55 (592)
0 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Demand remained relatively weak with very little • No new build was undertaken during the year • Construction of a new Premier Inn and Beefeater new activity in 2013.. within the town. Restaurant was delayed but will start imminently. • Tenants are increasingly looking to re-gear • Some changes in occupiers are likely early in • There was little new activity in 2013, following the existing leases to re-calibrate to current Zone A 2014 on the town’s existing retail parks. general trend within the town. levels. • The Quedam Shopping Centre recently sold to financier Benson Elliot for a reported £15.1m, with the new owner confirming plans to extend the shopping centre onto adjacent land. • Zone A rents are under increasing pressure, with parts of Middle Street decreasing to £30 psf (£323 psm).
John Benson T 0117 317 1100 E [email protected] Investment Andrew Maynard T 01823 444879 E [email protected]
value of investment transactions £ms prime yields % investment by sector
50 9
6% 40 42.3 8
30 7 industrial retail high street
20 6 industrial 94% 16.63 office 10 5 9.04 retail high street 7 2.13 retail out of town 0 4 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
value of investment transactions prime yields investment by sector • There has been a significant increase in the • Our current view of prime yields is as follows: • The most significant investment transaction in volume of investment transactions in Yeovil - Industrial 8% Yeovil was the sale of the Quedam Shopping which rose to £16.63m in 2013. A large proportion Centre, comprising 45 retail units in the town of this total was from one transaction. - Office 8.25% centre, for £15.1m. Tenants include BhS, Boots, - Retail high street 7.5% Marks & Spencer and Primark. - Retail out of town 7% • A warehouse on Gazelle Road let to Howden Joinery for 15 years was sold for £930,000 (NIY 7%).
www.alderking.com 28 A service overview Alder King provides a comprehensive, market-leading and award-winning package of services to clients throughout the UK.
Agency & Development Business Rates Our Agency and Development teams have a Alder King’s specialist Business Rates team reputation for excellence, delivering a proactive advises on and manages all aspects of business service to regional and national clients looking to rates throughout the UK. Through the careful acquire and dispose of commercial premises and management of over 7,500 properties, we save residential land on either a leasehold or freehold clients in excess of £7 million each year on their basis. Winning EGi’s Most Active Agent award based occupied portfolios and a further £1.5 million per on the number of transactions concluded in the year on empty property rates. Specialist services South West for 12 consecutive years is testament to include undertaking appeals and negotiations with our success. We advise on many of the most high national bodies, presenting cases at Valuation & profile developments in the South West of England Lands Tribunals, calculating rates liability, including and South Wales across all commercial, office, phasing and advising on rating for empty buildings. industrial, retail, leisure and residential property sectors. We are also widely recognised as a market- Energy leader in the provision of development viability Our energy team provides specialist advice and advice. co-ordinates a multi-disciplinary service across the following areas of practice: Asset Recovery • Specialist property search and acquisition advice Alder King’s dedicated Asset Recovery team offers specialist advice and expertise on all aspects of • Negotiation of option agreements for the sale asset recovery work throughout the UK and Ireland. or acquisition of land to meet energy project We act as Fixed Charge Receivers, advising a requirements broad spectrum of banks, financial institutions and • Advice to landowners with land suitable for insolvency practitioners. energy-related projects • Feasibility studies for energy projects Building Consultancy • Property valuation services for acquisition and Our Building Consultancy team advises clients lending purposes throughout the UK on how best to protect and • Project and facilities management enhance the value of their property assets. Our • Planning consultancy specific to the energy commercial acumen, technical expertise and sector collaborative approach allow us to deliver a range of specialised services including advice on property acquisition and disposal, development monitoring, Expert Witness dilapidations, party walls, new build construction, Alder King has more than 20 partners who regularly property refurbishment, insurance and general provide expert witness advice in formal proceedings. building matters on all forms of construction. Each member of our expert witness team has a minimum of 10 years professional experience in their Our Project Management team oversees the specialist field and all have completed specialised development, alteration or refurbishment of a training. host of commercial properties throughout the UK, including residential and student accommodation, as well as retail, office and industrial space. Specialist Investment services include budget costing, contract advice Alder King’s dedicated investment team provides and administration, appointment of consultants, honest and objective advice, based on years of monitoring and management of all works and experience across property and economic cycles, ensuring quality of work, compliance and cost on all aspects of the sale, purchase and funding control. of property in all sectors and across a wide geographical area. Using our excellent contacts and in-depth market knowledge, we advise public and private sector property owners including institutions, property companies, charities and private investors. Specialist services include investment acquisitions, disposals, asset management and development master- planning, viability and funding.
29 Alder King Market Monitor 2014 Lease Advisory Telecommunications Our Lease Advisory team provides a full range of With a specialist team focusing on this ever- services including negotiating rent reviews and changing and consolidating market, Alder King lease renewals across all sectors of the commercial supports mobile phone operators and property property market. We regularly present cases to clients interested in maximising the potential of the arbitrators and independent experts and often act telecommunications industry. The team provides a as expert witnesses in lease renewal proceedings. range of services, including: Senior members of the team act as arbitrators • Negotiation of new and re-negotiation of existing and independent experts in rent review or PACT legal agreements disputes. • Estate management, including lease renewals, site share applications, rent reviews and multi-site Property & Facilities Management agreements Alder King’s Property and Facilities Management • Representation for landowners/landlords on teams have a wealth of experience optimising telecommunications installations and proposed revenues and maximising the capital values of decommissioned sites commercial property for property investors, owners and tenants throughout the UK. We manage some • Advice on issues including fibre optic cabling and of the most complex and high profile commercial associated matters developments throughout the South West and Wales • Consultation with local planning authorities including shopping centres, business parks and • Site identification and leasehold/freehold complex mixed-use city centre developments. acquisition Our proactive management services include tenant management, rent and service charge reviews Valuation and accounting solutions, a 24/7 FM helpdesk, Our Valuation team provides professional and energy management and building maintenance/ informed valuation advice to clients across the refurbishment management. region on acquisitions and disposals, compulsory purchase and compensation disputes and valuations Planning for balance sheet, charity, loan security and Alder King’s Planning team provides expert taxation purposes. We act for all the major lending planning advice to private and public sector clients, institutions, together with property companies and ranging from individual householders and small corporate, public sector bodies, charities, trusts and businesses through to national and international private individuals and have extensive experience companies. Our experience working with and for of valuing commercial and residential property and planning authorities, as well as developers and development schemes. landowners, enables us to guide our clients through the complexities of the planning process. Our comprehensive planning service includes: For more information on our range of services, please visit www.alderking.com • Appraisals, strategy and policy advice • Representations, land purchases and site searches • Planning and other applications • Appeals and expert witness advice • Management and EIA • Consultation • Negotiation of S106 Obligations, CIL and viability assessments • Due diligence and marketing reports • Development briefs and scheme evolution
www.alderking.com 30 Bristol 0117 317 1000
Asset Recovery Investment & Asset Management Cardiff 029 2022 0000 Building Consultancy Lease Advisory Exeter Business Rates Office Agency 01392 353080
Commercial Development Planning Gloucester 01452 623290 Development Funding Property Management Swindon Energy Retail & Leisure Agency 01793 615477
Expert Witness Residential Development Taunton 01823 444879 Facilities Management Valuation Truro Industrial/Logistics Agency Viability in Planning 01872 222174
Research and press contact Simon Price - [email protected] Sarah King - [email protected] 0117 317 1000
www.alderking.com
January 2014. The figures and forecasts in this report are intended as a general guide and although Alder King has made every effort to ensure accuracy, it cannot accept liability for any errors in fact or opinion. All rights reserved. This report is strictly copyrighted and reproduction in any form is prohibited unless permission is first obtained. The stated figures should not be used for valuation purposes.
Alder King LLP is a Limited Liability Partnership registered in England and Wales no. OC306796 Registered Office: Pembroke House, 15 Pembroke Road, Bristol, BS8 3BA A list of members is available at the registered office.