Office Industrial Retail Leisure Investment Land
Market Monitor South West of England & South Wales 2015 2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.
Contents
2 Welcome 11 Cardiff 21 Swansea
3 Across the region 13 Exeter 23 Swindon
5 Bath 15 Gloucester 25 Taunton
7 Bridgwater 17 Newport 27 Truro
9 Bristol 19 Plymouth 29 A service overview
1 Alder King Market Monitor 2015 Welcome 2014 Highlights Market Monitor 2015 looks at the £1.07 billion occupational and investment markets Total value of South West and Wales investment. in the South West of England and £267.8 million Wales over the past 12 months, with Sale of 50% stake in Cabot Circus, Bristol to Aviva - the region’s largest data, trends and analysis on 12 key investment transaction. regional centres including, for the £28.50 per sq ft first time, Bridgwater, Somerset. New record Bristol office rent. Summary 1.75 million sq ft 2014 commercial property activity in the South West and Wales Lowest Bristol industrial supply for was the strongest since the financial crisis, with strong occupational 11 years. demand driving a buoyant regional investment market and supporting 400,000 sq ft the return of speculative developmentin a number of locations. Q4 Bristol city centre office take-up, the Last year saw a 51% increase in the level of office and industrial take- highest quarterly take-up for 20 years. up - the highest level for seven years. There was a correspondingly sharp drop in supply and, as predicted in last year’s Market Monitor, the 22% up majority of centres recorded rental growth over the course of the year. Cardiff’s five year average office take-up. The region’s new speculative office and industrial developments secured high profile lettings in 2014 with some achieving record rents, confirming 1 million sq ft occupier appetite for Grade A space. There is now a pressing need to Bristol city centre office space identified bring forward more speculative development in key locations over the for residential conversion via PDR. next 12-18 months to replace dwindling stock and meet rising demand. The year’s very strong performance reflects improved occupier confidence. Notwithstanding uncertainties from the forthcoming General Election and the possibility of interest rate rises, optimism remains high that activity levels can be sustained through 2015. The South West continues to play to its strengths of financial, professional and creative services, together with engineering, technology, logistics, defence and energy. Predicting and meeting the property needs of these occupiers over the next 5-10 years is essential for the region’s continued success. The prospect of city and regional devolution, while potentially some way off for the South West, provides a tantalising opportunity for the region to exercise greater control over its economic future, driving investment and creating new jobs. 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 28.5 (307)
20 21.5 (231) 22 (237) 21 (226) 15 (199) 18.5 (188) 17.5 (188) 17.5 17 (183) 16.5 (178) 16 (172) 16 (172) 16 (172) 15.5 (167) 15 (162) 14.75(159) 10 (156) 14.5 12 (129) 12 (129) (118) 11 11.5 (124) (116) 10.75 (86) 8
5 (91) 8.5
0
Bath Truro Bristol Cardiff Exeter Swindon Taunton Newport Plymouth Swansea Bridgwater Gloucester occupational summary • 2014 saw office take-up across the region • Supply overall has reduced across the region increase again with Bristol, Cardiff, Newport, again, due not only to strong occupier take-up, Swindon and Gloucester achieving strong but also the loss of further space for conversion improvements in performance compared with in particular for residential use under Permitted 2013. In particular it was the increase in take-up Development Rights. of modern Grade A space which boosted the • Rental growth is now evident in a number of market in many locations. locations across the region with central Bristol • The overall level of take-up in some locations is seeing new record rental levels achieved during now being constrained by the limited supply of 2014. Further growth is likely in 2015. good quality accommodation with Bath, Exeter • The overall reduction in supply is also resulting in and north Bristol particularly affected. a reduction in the level of tenant incentives being • So far only Bristol and Cardiff have seen major offered in most markets across the region. new speculative development come forward and in Bristol, both city centre schemes have met with early success.
Industrial Andrew Ridler T 0117 317 1071 E [email protected]
industrial headline rent £psf
10
8 (86) 8 (86) 8 7.75(83) 7.5(81) 7 (75) 6 7 (75) 6.75(73) 6 (65)
4 (54) 5 (64) 5.95 4.2(45) (43) 4 2
0
Bath Truro Bristol Cardiff Exeter Swindon Taunton Newport Plymouth Swansea Bridgwater Gloucester
occupational summary • Take-up increased in 2014 on the previous year • Demand is increasingly focused on better in all but Newport with the lack of good quality specified space with new build activity currently supply increasingly a constraint to activity. underway in Bristol, Gloucester, Wellington, • While supply increased in some centres, the Bridgwater and Truro. core locations have seen further decreases in • With an improving number of medium sized availability. requirements, occupiers are increasingly only • The majority of centres will now support able to satisfy their needs via the design and speculative development. build route. • Supply in Bristol is now at its lowest level for • Key areas of growth will be from occupiers in the 11 years. logistics sector and particularly those involved with internet fulfilment.
Key sq ft (sq m)
3 Alder King Market Monitor 2015 Charles Russell-Smith T 0117 317 1043 Retail & Leisure E [email protected] Residential 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) 30 (323)
110 20 28 (301) 100 100 90 25 (269) 25 (269) 25 (269) 150 (1,615) 150 (1,615) E [email protected] (215) 20 55 (592)
40 (430) 10 19 (205) 50 17 (183) (1,184) (968) (1,076) 100 (1,076) 0 0 Development land market summary Bath Truro Bath Truro Bristol Cardiff Exeter Bristol Cardiff Exeter Swindon Taunton Swindon Taunton NewportPlymouthSwansea NewportPlymouthSwansea Bridgwater Gloucester Bridgwater Gloucester • In the first half of 2014 we witnessed
(Cabot Circus) increased market confidence, a rising volume of house sales and increased land • 2014 saw another year of GDP growth and an The growth in online sales is likely to exacerbate buying activity. Most of the activity was increase in both consumer confidence and the situation over coming years. focused on greenfield sites in desirable locations. spending. Whilst the level of sales on the high • As is currently being experienced across the street increased, there was also a corresponding country, new development remains limited. • Where there were competitive bidding increase in online sales. The 296,000 sq ft (27,800 sq m) Friars Walk situations for consented residential sites • Improving sales figures and consumer confidence development in Newport is one of only two in desirable locations, generally analysis continued the stabilisation of rents in prime centres due to open in 2015. showed rising land values. trading locations across the region and, in a • The food store sector is dominated by Lidl and • During the third quarter of 2014, activity limited number of instances, a growth in rent has Aldi, which both have aggressive expansion plans and sales volumes weakened, price been recorded. However, the rents in secondary across the region. Elsewhere, the major food increases plateaued and in some cases locations continue to be under pressure. stores continue to drive their expansion through slightly reduced. In our judgement the • 2014 also saw a reduction in the number of a convenience format, with the Cooperative land market is being affected and this voids across the majority of high streets in looking to be particularly active in 2015. change is being caused by several factors including: the region. However, there was a marked • Strong demand remains from A3 operators, both polarisation towards prime pitches and it remains in and out of centre. The hotel and public house • The tightening of mortgage finance questionable as to whether or not secondary and sectors also remain active. under new ‘affordability testing’ tertiary locations will recover. Alternative uses regulations. may be the best solution for these locations. • The year also saw a limited but welcome expansion by several well-established regional multiples. • A significant increase in the availability of residential development opportunities, as vendors return to the market following a buoyant Q1 and Q2. John Benson T 0117 317 1100 E [email protected] • Some developers, having bought Investment aggressively over the last twelve months, have now established a value of investment transactions £ms deliverable ‘pipeline’ and are becoming much more selective. 600 • A number of developers are currently at ‘capacity’ delivering the sites they 500 have secured and may not have the 557.4 400 time. • Residual site values are driven most 300 strongly by two factors: changes in gross
200 development value and build costs. Whilst 209 we have seen rises in sales values, we 190 76.5 100 71.5 have also seen a significant inflation in 52.3 26.37 31.35 17.02 14.05
13.25 building costs, coupled with developer 97.9 0 concern that the major construction project at Hinkley Point could result in a Bath Truro Bristol Cardiff Exeter Swindon Taunton Newport Plymouth Swansea further ‘pressure’ on the labour market Bridgwater Gloucester across a number of trades. investment market summary • Despite recent ‘softening’ of the • 2014 was a positive and encouraging year for • 2014 finished strongly and we fully expect residential land market in Q3 and Q4, two the UK commercial property market, with IPD this momentum to carry into 2015 with key underlying demand factors remain total returns rising above 20% and capital values strong competition for the limited attractive strong. Firstly the long term under- increasing by 11.6%. opportunities across all sectors. Risk appetite supply of housing in the South West and has already increased and is set to increase • Confidence was evident across all sectors and secondly, the Bank of England’s recent further as concern grows over missing the next the level of investment volumes for January to commitment to keep the base rate at market cycle. November was £47.7 bn compared to £42.0 bn its historic 0.5% low for ‘some time’ will for the same period of 2013. Investor appetite has • The South West and South Wales region and provide stability and comfort to mortgage been strong and competitive bidding situations its principal centres are performing well in a lenders and house buyers alike. have occurred for prime and good secondary UK context, fuelling investment interest and • Demand for land and property suitable for properties. providing attractive comparative investment student, retirement and care home uses returns. This is further supported by clear • The commercial investment market in the remains strong. regions was strong throughout the year with high evidence of a strong return of occupier demand, demand for prime properties and good levels of real rental growth and limited new supply. demand for secondary properties. Investment Structural change in some sectors needs to be activity outside London continues to grow navigated with care and whilst the UK General as strong demand and stiff competition lead Election in May will generate much debate, it investors to search for better value. should not derail the new levels of confidence.
www.alderking.com 4 Bath 1
Offices Simon Price T 0117 317 1084 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
150 600 40
125 500 30 100 400 92 90 (8.5) (8) 350 360 75 82 300 20 (33) (33) 305 (8) 68 65 (28) 50 (6) (6) 200 240 (22) 21 (226) 21 (226) 21 (226) 10 25 100 145 20 (215.27) (13) 18.5 (199.13)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre demand supply headline rent • Occupier demand continued its strong • Total availability within the city centre reduced • The lack of available new Grade A specification performance of recent years. Further take-up further in 2014. The last two remaining Grade A accommodation has had the effect of holding is now being restricted by the lack of available suites at the SouthGate development let during back rental growth at the top end of the market accommodation in the market. the second half of the year, leaving no available over recent years. • Major deals in 2014 included the acquisition of brand new Grade A supply. • In the short term this will continue to be the 10,000 sq ft (929 sq m) at Cambridge House • Supply has also been impacted by the loss of a case due to the lack of supply, but at 20 Manvers by Maplecroft, 8,523 sq ft (792 sq m) at 29/30 number of existing buildings to alternative uses, Street, a comprehensive refurbishment of the Monmouth Street by Shift Active Media and most commonly hotels, student and private entire property comprising 45,660 sq ft further expansion by British Maritime Technology residential. (4,242 sq m) is being offered at quoting rents at The Square on Lower Bristol Road. • A small number of new developments are now up to £24 psf. • Most activity continues to come from the TMT, being considered. Ediston Real Estate and Europa • The continuing reduction in availability has service and professional services sectors, with a Capital have submitted a planning application resulted in reduced incentive levels being offered number of serviced office operators also actively for a 113,000 sq ft (10,498 sq m) speculative to secure occupiers across all quality ranges. seeking space in the city. development at 1 Pinesgate.
Industrial Andrew Ridler T 0117 317 1071 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
30 100 10
25 25 80 85 8 (2.3) (8) 20 20 20 60 6 (86) 8
(2) (2) 7.5(81) 15
15 50 7 (75.34) (1.4) 40 (5) 4
10 6 (64.58) 6.25 (67.28) 30 30 7.5 20 (3) (3) 2 5 (0.7) 20 (2) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Good freehold owner occupier demand remains, • Supply is still limited to second-hand stock but • Headline rental levels have increased to £8 psf albeit with limited opportunities. increased dramatically with the availability of the (£86.09 psm). • The lack of good quality modern space is holding Herman Miller building which comprises circa back take-up. 65,000 sq ft (6,038 sq m) and will appeal to a number of existing Bath-based occupiers. • There is increased interest in the city from trade and roadside uses, as evidenced by Screwfix’s • No speculative industrial/distribution acquisition of 6,000 sq ft (557 sq m) at Pines development has taken place in Bath. Way. • Notwithstanding the increase in supply, there is still a negligible amount of good quality stock and the shortage of modern space is set to continue.
Key sq ft (sq m)
5 Alder King Market Monitor 2015 1. SouthGate Centre. Courtesy of SouthGate Limited Partnership. 2. ScrewFix, Pines Way Industrial Estate, Bath. Courtesy of ScrewFix. 2 23 3. The Vaults, Bath. Courtesy of Queensberry Real Estate.
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 60
250 50 50
200 40 40
150 30 30 32 250 (2,690.88) 225 (2,421.90) 225 (2,421.90) 200 (2,153) 200 (2,153)
100 20 40 (430.54) 40 (430.54) 20 35 (376.72) 35 (376.72) 35 (376.72) 35 (376.72) 30 (323) 30 (323) (334.45) 30 (322.91) 50 10 10 9 (96.87) 9 (96.87) 9 (96.87) 14 (151) 14 (151) (118) 11 (118) 11 14 (150.69) 0 0 0 13 (139.93) 13 (139.93) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Bath continues to attract major new retailers to • The future of the former Bath Press site remains • 2014 saw the opening of many new brands its central core. In 2014 Anthropologie opened in uncertain. Tesco is currently reassessing its including Cowshed in the Paragon, Turtle Bay in New Bond Street and Primark in Stall Street. options for redevelopment of the site. New Bridge Street, Grillstock at the Vaults and • Convenience stores continue to thrive. Morrisons • The long awaited Lidl store on Lower Bristol Road Cau in Milsom Place. has opened its third store in Widcombe Hill and is currently under construction and due to open • Two new restaurant opportunities are being Tesco, its eighth store in Southgate Street. early in 2015. marketed on Grand Parade by Bath City Council. • Deeley Freed’s plans at Saw Close are progressing. Occupiers include a casino operated by Group Partouche and Z Hotels.
John Benson T 0117 317 1100 E [email protected] Investment Oli Stretton T 0117 317 1121 E [email protected]
value of investment transactions £ms prime yields % investment by sector
175 8
150 7 125 industrial 123.98 28% 6 100 retail high street 72% 75 5 industrial 50 office 37.57 4 25 retail high street 25 22.5 13.25 retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2012 2014 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: • Looking at the high street retail sector which Bath for 2014 is £13.25m. This is significantly - Industrial 6% dominated the 2014 investment value total, 23- lower than the 2013 figure at £123.98m. However, 26 Union Street sold to CBRE Global Investors the 2013 level was the highest level in the last - Office 6% from Salix Trust for £8.9m, 5.20% NIY. The unit, six years and a considerable proportion of this - Retail high street 4.5% located in a prime retail location on Union Street, (£101m) was from one transaction, a 50% share - Retail out of town 5.25% is let to Banana Republic on a 10 year lease from in the SouthGate retail centre. The average total 2010 with a 5 year break option. 11 Argyle Street, transaction value from 2010 to 2014 is £44.5m. let to Phase Eight until 2023, sold to a property company for £650,000, 6.10% NIY. • In the industrial sector, Europa Capital Partners and St Congar Land purchased the Bitton Paper Mill site in a JV for £3.7m. The site totals 17 acres and is not occupied.
www.alderking.com 6 Bridgwater 1
Offices Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
80 60 20
55 50 (5) 60 65 15 (6) 40
40 30 10 14.75(159)
20
20 5 (86) 8 reported previously Not reported previously Not reported previously Not reported previously Not 10 reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 town centre out of town demand supply headline rent • While improved demand and transaction levels • The construction of a new Innovation Centre at • Rents remained at similar levels throughout 2014, at the end of 2013 rolled over into Q1 of 2014, Woodlands Business Park will increase supply although smaller suites attracted a premium. enquiries for the remainder of the year were significantly in May/June 2015 and is likely to • It is likely that rents will improve in 2015, typically for smaller space save a few larger and capture demand from Hinkley Point C supply especially for good quality accommodation yet to be satisfied requirements. chain companies, should the main construction located close to the M5. • Requirements tend to focus on proximity to project commence in the year. the M5 at junctions 23 or 24 and good quality • There is little availability of accommodation accommodation with a mixture of open plan and above 5,000 sq ft (464.5 sq m) within the town, compartmental accommodation. due to the nature of the market historically. • 2014 saw the opening of Avon & Somerset Police’s new operational centre and police station on Express Park.
Industrial Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
300 500 12
250 10 400 239 225 365 200 (21) (22) 8 300 (34) 150 6
200 7.5(81) 100 4
reported previously Not reported previously Not reported previously Not reported previously Not 100 reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not 50 2
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • There has been sustained growth in levels of • New build has increasingly been a solution to • Rents were relatively stable throughout 2014 and demand throughout the year. the under-supply of existing premises within the indeed there were early signs of rental growth in • Hinkley Point C is yet to have a dramatic effect town. Q4 2014. on levels of take-up, although enquiry levels • The paucity in supply is particularly evident for • With further new build likely in 2015, there is the started to rise in the final quarter of 2014. premises of 20,000 to 50,000 sq ft (1,858 to strong prospect of headline levels increasing. • Demand is polarised with good demand for sub 4,645 sq m), although arguably under-supply • Rents for secondary accommodation will also 5,000 sq ft (464.5 sq m) and also for over is evident across all sizes, especially for good improve in 2015 if the imbalance between 20,000 sq ft (1,858 sq m). quality space. This position will remain and demand and supply is exacerbated by demand undoubtedly worsen if and when levels of demand from Hinkley Point C supply chain companies. • Significant lettings include GeoPost’s acquisition from Hinkley Point C materialise in 2015. of 36,500 sq ft (3,391 sq m) at Woodlands Business Park.
Key sq ft (sq m)
7 Alder King Market Monitor 2015 1. GeoPost, Woodlands Business Park, Bridgwater. 2. Bridgwater Hospital, Bridgwater. 2 3 3. CGI of the Low Carbon Energy Innovation & Collaboration Centre, Woodlands Business Park.
Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
60 30 20
50 25 15 40 20 15 (161) 30 15 10 40 (430) 12 (129) 20 10 17 (183)
5 (86) 8 10 reported previously Not reported previously Not reported previously Not reported previously Not 5 reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not reported previously Not
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • After a successful first half of the year, demand • There is active demand from a number of • Due primarily to the prospect of Hinkley Point C, dipped in the 3rd and 4th quarters and the discount chains together with some convenience there is increasing interest in the town from hotel vacancy rate rose to almost 15% by the end of format supermarkets. operators. Construction of an 80 bedroom 4 star 2014. • There was little activity during 2014 after several hotel on Eastover, which received a £4.5m cash • The Local Authority has commenced work to new store openings in 2013. boost from the Growing Places Fund, is due to improve the Eastover area as part of its long term commence imminently. vision for the town centre. • A3/A4 demand will increase in the town during • Larger format units have been more popular and 2015/16 as more land is brought online and the the former Argos store in Binford Place has finally town’s population grows. been let following closure back in 2009. • Zone A rents have changed little in the prime and secondary areas.
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
5% 40 8
office 30 31.35 7 retail out of town
20 6 industrial 95% office
10 reported previously Not reported previously Not reported previously Not reported previously Not 5 retail high street retail out of town 0 4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • The value of investment transactions in 2014 • Our current view of prime yields is as follows: • The largest deal in the out of town retail sector was £31.35m, with the majority being in the - Industrial 6.75% was LIM’s purchase of Bridgwater Retail Park in retail warehouse sector. May 2014 from Cornerstone Real Estate. - Office 7% The 112,600 sq ft (10,461 sq m) park is multi-let - Retail high street 6.5% to Next, Wickes, Argos, Pets at Home and Lidl. - Retail out of town 6% It sold for £26.13m, 5.90% NIY. • Metric Income Plus purchased The Range, Bristol Road for £3.67m, 6.8% NIY. The 33,715 sq ft (3,132 sq m) new unit is let to The Range for 20 years from February 2013. • In the office sector, Kingcastle Limited purchased Royal Clarence House, High Street, a multi-let office totalling 14,350 sq ft (1,333 sq m) for £1.55m, £108 capital value psf.
www.alderking.com 8 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 1,250 3,000 28.5 (307) (116) 20 27.5(296) 27.5(296) 27.5(296) 27.5(296) 1,000 2,500 2,650 2,550 2,350 (246) (237) 2,380 800 860 2,000 15 (218) (221) 21.5 (231) 21.5 (231) 21.5 (231) (80) 735 700 21 (226.03) 21 (226.03) 600 658 1,500 1,650 (65) (68) 10 (61) (153) 400 1,000 5 200 500
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Occupier demand gathered momentum during • In the city centre, less than 200,000 sq ft • The letting in October 2014 during construction the year with the end of year total the highest (18,580 sq m) of new Grade A space is at 2 Glass Wharf to PwC set a new record rent level since 2007. Both city centre and out of town immediately available, with less than 10,000 sq ft in Bristol for Grade A accommodation. This was markets performed significantly ahead of the five (929 sq m) available in North Bristol. followed by the pre-let in December 2014 to year average. • Two new speculative Grade A developments - KPMG. • Notable deals in 2014 included the acquisition Salmon Harvester/NFUM’s 2 Glass Wharf and • The increased level of take-up of Grade B space of 28,276 sq ft (2,627 sq m) by PwC at 2 Glass Skanska’s 66 Queen Square - will complete in has resulted in rental growth in a number of size Wharf, KPMG’s acquisition of 52,000 sq ft January and June 2015 and have already ranges during the year, as a result of reducing (4,831 sq m) at 66 Queen Square and in North secured lettings. supply. Bristol, TSB’s acquisition of 63,858 sq ft • There has been a sharp reduction in the • The level of proposed conversion, as a result of (5,933 sq m) at Key Point, Almondsbury. availability of Grade B space. Approximately Permitted Development Rights, has significantly • The most active sectors continue to be financial 1m sq ft (92,902 sq m) of city centre space has reduced supply at the budget end of the market, and professional services and the energy and been identified for conversion to residential via where rental growth is also now evident. TMT sectors. Permitted Development Rights.
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 7.5(81)
6 7.75(83) 2,500 5,000 7.5(80.73) 7.5(80.73) 7.5(80.73) 2,400 2,400 2,325 2,400 4,500 4,500 5 2,000 2,200 4,000 (223) (223) (216) (223) (418) (418) (204) 3,750 4 1,500 3,000 (348) 2,750 3 1,000 2,000 (255) 2 1,750 500 1,000 (163) 1
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • There has been a return of mid-range • There is a negligible amount of good quality stock • There is no new space immediately available requirements in the 15,000 – 75,000 sq ft and shortages of modern space are impacting on and we anticipate that rentals of circa £7.75 - £8 (1,394 – 6,968 sq m) size range with limited take-up. psf (£83.40 - £86 psm) could be achieved for availability triggering design build activity. • The city’s first speculative industrial/distribution accommodation below 10,000 sq ft (929 sq m). • Significant deals include The Range’s leasehold development comprising five units totalling • Rents for modern and mid-range buildings remain acquisition of the 385,000 sq ft (35,768 sq m) 15,000 sq ft (1,394 sq m) is close to completion at at £6.50 psf (£70 psm). Good quality second- former Morrisons RDC at Cribbs Causeway and Caxton Business Park with four buildings pre-sold. hand buildings are commanding rents of around Farm Foods’ new build acquisition of 175,000 sq ft • The city could support further speculative £4.75 - £5.75 psf (£51.11 - £61.88 psm). (16,258 sq m) at Central Park, Avonmouth. development, particularly providing buildings in • With the reduced levels of good quality available • There is increased demand from owner occupiers the 1,000 - 3,000 sq ft (93 - 279 sq m) and stock, rental incentives for prime space have for freehold space with limited opportunities. 25 - 100,000 sq ft (2,322 – 9,290 sq m) size reduced with lease durations extending. ranges.
Key sq ft (sq m)
9 Alder King Market Monitor 2015 1. 66 Queen Square, Bristol. Courtesy of Skanska UK. 2. 2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM. 2 3 2. Caxton Business Park, Warmley. Courtesy of Axten and Blue Marble Properties.
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) 300 (3,229) 30 30 310 (3,336.69) 40 (430.54) 150 300 (3,229.20) 300 (3,229.20)
20 35 (376.72) 20 30 (323) 30 (323) (323) (323)
100 30 (322.91) 30 (322.91) 30 (322.91) 200 (2,153) (1,884) 1 74 170(1,830) 200 (2,152.70) 200 (2,152.70) 200 (2,152.70) 200 (2,152.70) 10 10 185 (1,991.25) 180 (1,883.70) 50 175 (1,883.70) 15 (161) 15 (161) 12 (129) 12 (129) 15 (161.45) 15 (161.45) 15 (161.45) 12 (129.16) 0 0 0 13 (139.93) 13 (139.93) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Broadmead The Mall Cabot Circus cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Throughout the year, voids have continued to • Sainsbury’s has opened a new food store in • New restaurant openings include Wagamamas reduce in both the city centre and The Mall at Portishead. and Five Guys in Cabot Circus, Cau and Byron on Cribbs Causeway. • Waitrose now trade the former Co-op site in Queens Road and Rosemarinos in the city centre. • New openings include Pull and Bear and Lloyds Broadmead Lane, Keynsham. • The redevelopment of Ashton Gate has started Bank at Cabot Circus, Sainsbury’s Local, Bakers • Discounter activity remains strong. Aldi with the demolition of the Wedlock Stand. Due Dolphin, Ecco and Poundland in Broadmead and has opened in Longwell Green and Lidl has for completion in 2017, the stadium will provide Joules, Superdry, Jack Wills, Lakeland and Bose announced proposals for a new store in Horfield. 27,000 seats, conference facilities and an hotel. at The Mall. • Bristol City Council is progressing plans for a • THAT Group and Acorn are progressing plans for new 12,000 seat Arena close to Temple Meads a new mixed use development in Clifton Village to station. SMG and Live Nation have been named as include shops, restaurants and apartments. preferred operators. The Arena is due to open in 2017.
John Benson T 0117 317 1100 E [email protected] Investment Oli Stretton T 0117 317 1121 E [email protected]
value of investment transactions £ms prime yields % investment by sector
700 8
600 7 8% 500 industrial
557.4 office 492 6 24% 400 54% retail out of town 300
349 5 other 319 industrial 14% 200 office 4 100 retail high street
155.19 retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 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: • 54% of the total value of investment transactions Bristol in 2014 was £557.4m. This is an increase of - Industrial 5.75% in Bristol is made up by the sale of a 50% stake circa 75% on the 2013 total of £319m. in Cabot Circus. This stake in the 1.3m sq ft The Bristol five year investment value average - Office 5.75% (120,774 sq m) central Bristol shopping centre is £374m. - Retail high street 4.5% sold for £267.8m, 6.30% NIY to Aviva. - Retail out of town 5% • The largest office deal was The Paragon, Victoria Street purchased by Lothbury for £29.5m, 5.93% NIY. This 75,000 sq ft (6,968 sq m) office is multi-let to tenants including EY and Mercer. • The most significant deal in the retail warehouse sector was the purchase of Centaurus Retail Park by NFU Mutual. This 81,000 sq ft (7,525 sq m) multi-let retail warehouse park sold for £47.1m, 5.53% NIY.
www.alderking.com 10 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 1,200 500 531 1,200 1,200
(49) 1,000 (111) (111) 1,100 22 (237) 22 (237) 437 (102) 1,000 1,000 15
400 22 (236.81) 21 (226.03)
(41) 380 800 (93) (93) 20 (215.27) 300 (35) 300 600 10 (28)
200 12 (129) 12 (129) 14 (150.69)
400 13 (139.93) 13 (139.93) 5 100 200
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Take-up has remained healthy and constant • Supply has remained constant, again comprising • Headline rent is maintained in the city centre throughout each quarter and has resulted in a mainly secondary stock. Grade A stock is but is expected to grow to facilitate new Grade 24% increase on the five year average of 427,000 extremely low, with less than 30,000 sq ft A office development, particularly at Rightacres sq ft (39,669 sq m). (2,788 sq m) available in the city centre. Central Square where Blake Morgan has pre-let • Out of town and business park demand improved • The take-up of space by student office 28,077 sq ft (2,608 sq m). in 2014. conversions is likely to counteract the Admiral • Over 200,000 sq ft (18,581 sq m) of lettings in • Deals below 5,000 sq ft (465 sq m) accounted for Insurance relocation, from various city centre out of town locations (excluding Cardiff Bay) have 30% of take-up, a marked comparison to 80% in locations, into its new 220,000 sq ft resulted in out of town headline rents remaining 2013. (20,439 sq m) building. constant. • Notable deals included International • Over 300,000 sq ft (27,871 sq m) is forecast for • Incentives continue to tighten but we expect Baccalaureate Organisation taking 48,500 sq ft construction over the next 15 months within substantial rent free periods will be offered on (4,506 sq m) and SSE taking 46,851 (4,353 sq m) Cardiff’s ‘Financial Services’ City Enterprise Zone new Grade A developments to encourage rental at Cardiff Gate Business Park. where JR Smart’s 80,000 sq ft (7,432 sq m) growth. Capital Quarter 2 is currently under construction.
Industrial Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
1,000 2,000 7 1,986 (184) 1,894 (176) 6 800 1,500 5.5 763 5 1,467 (59.20) (71) 5 5 5 5 600 631 (136) 1,368 (53.82) (53.82) (54) (54) (59) (127) 4 1,000 516 518 572 1,094 (53) (102) 3 400 (48) (48)
2 500 200 1
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Demand increased slightly from last year and • Supply has reached its lowest level in six years in • Headline rents have remained unchanged at includes Pinewood Studio’s move to the 177,000 line with increased demand. £5 psf (£53.82 psm). sq ft (16,444 sq m) building formerly occupied by • Many transactions have been freehold • Incentives are still very much in place for G24i. contributing to levels of supply in this sector secondary stock while prime space incentives are • The year showed no slowdown in the market decreasing for the sixth successive year. hardening and lease durations lengthening. for deals below 10,000 sq ft (929 sq m) with • Supply levels are expected to decline further transactions of this size accounting for 80% of all as a result of continued limited speculative demand. development and the reducing levels of quality • Capital Business Park as well as the southern stock coming to the market. part of Cardiff, will be enhanced with the construction of the Eastern Bay Link Road commencing in 2015.
Key sq ft (sq m)
11 Alder King Market Monitor 2015 1. Central Square, Cardiff Masterplan. Courtesy of Rightacres Property Co Ltd. 2. Caradog House, Cardiff. 2 3 3. Castle Arcade, 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
300 40 50
35 250 40 30 250 200 230 225 225 225 25 30 40 (431) 40 (431)
150 20 30 (323) 30 (323) 30 (322.91) 30 (322.91) 30 (322.91) (2,475) (2,422) (2,422) (2,422) (2,690.88) 15 20 100 30 (322.91) 30 (322.91) 30 (322.91)
10 11 (118.40) 10 50
5 (140) 13 (140) 13 (118) 11 (118) 11 13 (139.93) 13 (139.93) 13 (139.93) 0 0 0 12 (107.64) 12 (107.64) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Headline rents have reduced slightly but should • Activity remains quiet and is still dominated by • There has been a high level of activity in the remain stable with continued lettings in St David’s demand for convenience stores. restaurant and A3 sector with multiple lettings to II to Blott, Tiger Stores, Mac, Other UK and Castle • There are plans for the former Comet on Newport good covenants across the city, most notably in Fine Art. Road to become a discount food store. The Hayes area. New occupiers include Wahaca, • Queen Street remains popular with a new Primark Burger & Lobster which are both adjacent to the store at the former BHS and a new Matalan in the new Miller & Carter restaurant. Rick Stein also has former Primark. a requirement in Cardiff. • Moorfield Group (Moorfield) and Plus Shops Retail have agreed to take a 25 year lease from Premiere Cinemas to re-open the five-screen cinema at Cardiff’s Capitol Shopping Centre. The £1m refurbishment is well underway.
John Benson T 0117 317 1100 E [email protected] Investment James Nicholas T 029 2038 1994 E [email protected]
value of investment transactions £ms prime yields % investment by sector
210 8 2% 204.36 209 180 7 150 18% industrial 6 34% 120 129.6 131.33 office 90 5 37% retail high street industrial 78.43 60 retail out of town office 9% 4 30 retail high street other retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 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 multi-let Capital Shopping Park was purchased Cardiff increased by 59% on the 2013 figures, - Industrial 6.5% by ReAssure Ltd for £59.6m, 5.20% NIY. rising from £131.33m to £209m. - Office 6.25% • In the high street retail sector, 10 The Hayes was purchased by Henderson UK PUT for £14.8m, - Retail high street 4.75% 5.75%. The unit is let to TX Maxx for a further - Retail out of town 5% 7 years. • The largest transaction in the office sector was the sale of Cricklewood House for £40.5m, 5.36% NIY. This circa 100,000 sq ft (929 sq m) office building is let to the National Assembly of Wales. • The Castle Quarter Portfolio, a collection of listed Victorian retail arcades with associated office, residential and leisure uses totalling 125,000 sq ft, was purchased by Mansford Real Estate for £21.375m, 7.65% NIY.
www.alderking.com 12 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
175 400 410 16 350 (38) 14 150
350 (188) 17.5 (188) 17.5 150 150 140 135 300 (33) 325 12 16.5 (178) 125 (14) (14) 310 (13) (30) 15.5 (167) (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) 250 (28.8) 10 100 100 200 215 8 75 (9) 150 (20) 6 50 100 4
25 50 2
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • There is strong demand for smaller suites in the • There is continued pressure on secondary stock • The letting to Blur Group at £17.50 psf (£188 psm) city centre with clients breaking up floor plates for redevelopment for alternative uses such as in 2013 has yet to be beaten. to satisfy demand, Atrium and The Senate being student housing or residential. • New build offices are now being priced at £18 psf prime examples. • There has been no new build during the (£194 psm) leasehold and £235 psf (£2,530 psm) • There is a trend towards owner occupiers seeking downturn, severely limiting Grade A availability. freehold. We expect these prices to rise to keep 5,000 sq ft (465 sq m) stand-alone freeholds. • We predict a continued lack of supply of modern pace with construction cost inflation. • Demand is not being met by standing stock and premises for the next three years whilst the • Values for secondary stock are also rising due to high profile occupiers are struggling to find development pipeline catches up. the lack of supply and comparative cost of new suitable space. build.
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 (86) 8 600 6 600 390 (36)
(56) 7 (75.34) 500 300 5 305 300 300
400 (28) (28) (28) 4 6 (64.58) 6 (64.58) 250 6.25 (67.27) 330 200 (23) 300 310 310 3 (31) (29) (29) 200 2 200 100 100 (19) 1
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • The industrial sector is the strongest in Exeter • Supply has seen a considerable decrease to its • £8 psf (£86 psm) has been achieved for new with good demand particularly from internet 2009 level. Limited development since 2007 build premises in Exeter but £7.50 psf is likely fulfilment companies. means occupiers are forced to take to remain as the headline rent for institutional • Occupiers are focussing on transport links and older buildings. specification premises. broadband capacity when selecting premises. • Construction of 40,000 sq ft (3,716 sq m) of new • Land values continue to rise with £460,000 per • We continue to see strong demand for car space will begin at Hill Barton in 2015 where acre being paid in Sowton and land at Matford showrooms at Matford Green Business Park with pre–lets are agreed. Green being offered at £600,000 plus per acre. Toyota/Lexus buying two acres to relocate from • The availability of existing buildings above their existing premises. 10,000 sq ft (929 sq m) is extremely limited with demand unsatisfied.
Key sq ft (sq m)
13 Alder King Market Monitor 2015 1. Sandy Park, Exeter 2. CGI of Alphington Retail Park, Exeter 2 3 3. The Senate, Exeter
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 30 (323) 28 (301) 20 150 30 40 (431) 40 (431) 25 (269.09) 25 (269.09)
200 (2,153) 200 (2,153) 15 40 (430.54) 23 (247.56)
100 200 (2,152.70) 200 (2,152.70) 200 (2,152.70) 20 10 27.5(296) 50 10 5 17 (183) 17 (183) (108) 10 (86) 8 17 (182.99) 17 (182.99) 12 (118.40) 11 (118.40) 8 (86.11) 8 (86.11) 0 0 0 8 (86.11) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 High St. cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Demand from celebrity chefs continues to boost • The final letting to Dreams completes the line • Work has started at the Intercounty site with Exeter’s profile. Jamie Oliver has confirmed it will up at Alphington Retail Park which strengthens Frankie & Benny’s, Chiquito and KFC confirmed at open a Jamie’s Italian in Princesshay. the appeal of Alphington as an out of town retail headline rents of £38 psf (£409 psm). • The Princesshay development remains strong destination. • The St Austell Brewery’s redevelopment of former with limited availability. The planned mixed use • Secondary retail locations have performed very bonded warehousing has further enhanced development of the neighbouring bus station site well in some cases. The St Thomas Centre saw Exeter’s Quayside. will boost footfall to the city centre. a record rent agreed of £55.00 psf (£592 psm) • The continued expansion and addition of although this isn’t representative of the wider conference facilities at Exeter Chiefs’ home market. There has been unprecedented demand ground at Sandy Park are welcome improvements. from bookmakers and takeaways in locations with good parking. • The IKEA effect has yet to be felt as construction has not yet begun but a large increase in visitor numbers is expected.
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
250 8 3%
5% 200 7 4% 190
150 6 office 88% retail high street 100 5 retail out of town industrial 82.03 other office 50 63.36 52.85 4 40.42 retail high street retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • The total volume of investment activity in 2014 • Our current view of prime yields is as follows: • The largest transaction of the year was was £190m, compared to just over £50m in 2014. - Industrial 6.25% Henderson’s purchase of a 50% stake of the Princesshay Shopping Centre for £127.9m. • The average value over the past five years is - Office 6.25% £85.7m. • In the retail warehouse sector, Aberdeen Asset - Retail high street 4.5% • 33% of the total is made up by one transaction, Management purchased a circa 30,000 sq ft the 50% sale of the Princesshay Shopping Centre - Retail out of town 5.25% (2,787 sq m) asset on Sowton Retail Park, let for £127.9m, 5.6% NIY. to Dunelm and Furniture Village for an average unexpired term of 11.25 years. The purchase price was £6.88m, 6.25% NIY • In the office sector, Clarendon House, Western Way was purchased for £3.7m, 7.60% NIY. The office is let to the Ministry of Public Buildings with 19 years unexpired.
www.alderking.com 14 Gloucester 1
Offices Adrian Rowley T 01452 627133 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
225 400 30
200 350 200 25 175 (19) 300 150 20 150 250 125 (14) 250 120 200 (23) 15 100 (11) 200 100 95 150 (19) 75 (9) (9) 150 150 10 (199) 18.5
100 (14) 120 (14) 17.5 (188.36) 17.5 (188.36) 17.5 (188.36) 17.5 (188.36) 50 (11) 5 25 50 11.5 (123.78) 11.5 (123.78) 11.5 (123.78) 11.5 (123.78) 11.5 (123.78) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Take-up during the year totalled 150,000 sq ft • Supply remains at exceptionally low levels. • The headline rent for out of town space has (13,935 sq m), up 25% on the previous year’s • This shortage of supply is present in both prime increased to £18.50 psf (£199.14 psm). demand. and secondary sectors. • The headline rent for town centre space has • The largest and most significant transaction • There is now a distinct absence of space over remained constant at £11.50 psf (£123.79 psm). comprised the pre-let of 1420 Gloucester Business 5,000 sq ft (464 sq m) and of larger single floor Park to Horizon Nuclear Power Services which plate options. will provide 52,000 sq ft (4,831 sq m) with the capability to expand to 67,000 sq ft (6,225 sq m). • Demand remains focused on well-located Grade A space.
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 1,000 6
500 5 800 6 (65) 6 (65)
400 4 6 (64.58) 6 (64.58) 6 (64.58) 400 400 600 625 (37) (37) 300 (30) 3 300 300 275 400 450 200 (28) (28) 2 (26) (42) 350 (33) 275 100 200 250 1 (26) (23) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Take-up during 2014 totalled 400,000 sq ft • Supply has dropped to 250,000 sq ft • The headline rent has remained constant at £6 (37,160 sq m). (23,225 sq m). psf (£64.59 psm). • The figure represents a substantial increase over • This is the lowest level experienced over the • There continues to be an upward pressure recent years and equals the five year high. last five years and comprises predominantly on rents due to the shortage of stock and • Significant transactions include the pre-sale of a secondary stock. the predicted increase in design and build 35,000 sq ft (3,252 sq m) manufacturing building • Two new speculative Grade A buildings have been development activity. at Quedgeley West to Vision Profiles and a total completed comprising a building of 28,000 sq ft of 164,000 sq ft (15,236 sq m) in two lettings at (2,601 sq m) at Quedgeley West and a building Barnwood Point. of 22,000 sq ft (2,044 sq m) at Waterwells Business Park.
Key sq ft (sq m)
15 Alder King Market Monitor 2015 1. Porsche dealership, Tewkesbury. 2. Tewkesbury Trade Park. 2 3 3. Gloucester Quays. Courtesy of Peel.
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) 25 (269) 125 25 25 (269.09) 25 (269.09) (344) 32 (344) 32 15 32 (344.45) 32 (344.45)
100 22 (236.80) 20
75 15 10 120 (1,291.62) 120 (1,291.62)
50 100 (1,076) 100 (1,076) 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)
25 5 12 (129) 12 (129) 9 (97) 9 (97) 12 (129.16) 12 (129.16) 12 (129.16) 9 (96.88) 9 (96.88) 0 0 0 10 (107.64) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Eastgate St. Kings Walk cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • The opening of TK Maxx within the covered • The new Morrisons store and petrol filling station • The Gloucester Quays has experienced a Eastgate Street remains imminent and will has fuelled further demand within the out of town significant uplift in demand and customer footfall, provide a welcome boost to the city centre. market and a Costa Coffee drive-thru will be the mainly as a result of the opening of the Cineworld • The Stanhope redevelopment of Kings Square first to take occupation alongside Morrisons. 10 screen cinema which has given the Docks and the bus station continues to take shape, and • A new McDonalds restaurant and drive-thru the ability the draw in many more customers at will have a significant impact in rejuvenating the has recently opened at St Oswalds Park. Wren evenings and weekends. city centre economy. Kitchens was the latest retailer to enter the Park, • The new cinema has provided the catalyst for the • Demand generally across the four key gate taking half of the former Comet unit. arrival of new restaurants including Chimichanga, streets of the city centre - Eastgate, Westgate, • At Whittle Square, Gloucester Business Park there Zizzi’s and Ed’s Easy Diner, which have further Northgate and Southgate - is improving with the is just one remaining unit of 1,000 sq ft (93 sq m), enhanced the night-time economy of the city number of empty units declining. following the arrival of Andrews Estate Agents centre. and Barnardos who took occupation of a double • Within the health and fitness sector, the budget unit. gym operators remain active and are keen to acquire a limited supply of suitable properties.
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 97.9 90 7 14% 15% 75 industrial 7% 6 60 62.98 office 23% 57.2 45 retail high street 5 industrial 41% 40.29 41.6 retail out of town 30 office 4 other 15 retail high street retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • The volume of investment sales in Gloucester • Our current view of prime yields is as follows: • The largest investment transaction was Cordea and Cheltenham increased significantly to £97.9m - Industrial 6.25% Savills’ purchase of Church Street, Bishops in 2014. Cleeve, Cheltenham for £24m, 4.25% NIY. - Office 6.5% • The majority of transactions were carried out in The property is let to Tesco. the retail sector. - Retail high street 6.5% • In the office sector, Aviva purchased The - Retail out of town 5.75% Quadrangle for £8.13m, 7.64% NIY. The Quadrangle is a mixed use property with retail and restaurants on the ground floor and offices on 1st to 4th floors. • There were a few deals in the retail warehouse sector including Eastern Avenue, Gloucester which sold to NewRiver Retail for £4.25m, 8.30% NIY. Tenants are Magnet and PC World with an unexpired lease term of circa 8 years.
www.alderking.com 16 Newport 1
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 (36) 345 360
150 (16) 300 (32) (33) 16 (172) 16 (172)
10 16 (172.22) 16 (172.22) 15 (161.45) 15 (161.45)
100 115 200 12 (129) 12 (129) (11) 13 (139.93) 13 (139.93) 80 78 5 50 (7) (7) 100 43 (4) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Take-up for 2014 was 47% greater than 2013 and • Supply has remained constant due to a lack of • Headline rents remain constant due to a lack of 17% above the five year average. new development and the better quality newly Grade A stock and limited new development. • There has been a noticeable shift in demand available stock being taken up relatively quickly. • Incentives are hardening and will continue to towards business park locations. • Crown Buildings, Clarence House, Mill Street and do so throughout 2015, especially on the better • 46% of transactions were less than 5,000 sq ft Chartist Tower account for 48% of available quality stock. (465 sq m). stock. • Notable transactions include Welsh Water taking • There is a real shortage of Grade A stock. 35,000 sq ft at (3,252 sq m) at 28 West, Celtic Springs and Aquis Insurance Management taking 14,000 sq ft 1,301 sq m) at Integra House. Both were freehold purchases.
Industrial Owen Young T 029 2038 1996 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
700 1,750 7
600 652 1,500 6 (61) 500 1,250 5
1,192 4.5 400 1,000 1,080 1,104 4 407 404 (111) 1,008 (48.44) 4 4 4 4 (100) (103) (38) (38) 385 (94) (43.05) (43.05) (43) (43) 300 (36) 750 3 720 200 220 500 (67) 2 (18) 100 250 1
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Take-up decreased significantly from 2013, • Total supply increased on last year’s figures with • Headline rents remained constant at £4 psf reaching its lowest level in six years, with a availability at Imperial Park and 163,970 sq ft (£43.60 psm). number of occupiers unable to satisfy their (15,231 sq m) at Queensway Meadows. • We expect upwards pressure on rental levels for requirements. • Owner occupiers continue to search for good better quality stock. • 84% of deals were less than 10,000 sq ft quality freehold opportunities as the amount of (929 sq m) as the influence of SME’s continues good quality stock remains suppressed. Units to grow. with yards are in scarce supply and command • Conversely, there has been a 50% increase in the premiums. number of active requirements for units in the • 66% of stock comprises units of less than +100,000 sq ft (9,290 sq m) range. 10,000 sq ft (929 sq m), 10% down on 2013 • Notable deals include the letting of 86,000 sq ft figures as tenant demand increases for units of (7,990 sq m) at Leeway Industrial Estate to Fox this size. Heavy Haulage Limited.
Key sq ft (sq m)
17 Alder King Market Monitor 2015 1. ASDA Superstore, Caldicot. 2. Artist’s impression of Friars Walk, Newport. Courtesy of Queensberry Real Estate. 2 3 3. Unit 103, Wales One, Magor. Courtesy of Charnwood.
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 75 18 (194) 18 (194) 25 (269) 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 20 (215.28) 12 (129) 12 (129) 80 (861.08)
5 12 (129.16) 12 (129.16)
25 11 (118.40) (86) 8 (86) 8
55 (592) 55 (592) 5 8 (86.11) 8 (86.11) 8 (86.11)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Queensberry Real Estate continues to attract new • Spytty Retail Park continues to strengthen with a • In the city centre, Friars Walk has recently tenants at the 390,000 sq ft (36,232 sq m) Friars new Caffé Nero and Harvester. announced a new Las Iguanas and Le Bistrot Walk scheme. Latest signings include H&M who • Sports Direct has been refused permission to Pierre which will complement Cineworld Cinemas, have taken 20,000 sq ft (1,858 sq m) as well as transform the vacant Megabowl on the retail park Nandos, Cosmo, Frankie & Benny’s, Prezzo and two restaurant chains. The scheme is now 60% into one of its largest stores in the UK. It had Chiquitos. A new gym will be opening in Kingsway. let. been hoping to relocate from its existing site and • In September, the NATO summit was successfully • Queensberry together with Bywater Properties buy the freehold with a view to occupying the hosted by the Celtic Manor Resort where have also purchased the adjacent 250,000 building in its entirety or sub-letting part of the 7,500 delegates attended together with 5,000 sq ft (23,226 sq m) Kingsway shopping centre site to a separate retailer. journalists. The resort has also announced plans from UBS Triton Fund where anchors include for a new £60 million international conference Wilkinsons, B&M and Peacocks. A new Sainsbury’s centre with capacity for 4,000 delegates. is expected to be announced.
John Benson T 0117 317 1100 E [email protected] Investment James Nicholas T 029 2038 1994 E [email protected]
value of investment transactions £ms prime yields % investment by sector
70 9
60 8 50 52.3 office 7 40 38% retail out of town 62% 30 6 industrial 20 office 16.65 5 10 12.93 retail high street 8.30 8.9 retail out of town 0 4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • The value of investment transactions in 2014 • Our current view of prime yields is as follows: • 62% of the investment activity took place in the rose significantly to £52.3m from £8.9m in 2013. - Industrial 7% retail warehouse sector with UBS purchasing the £32.3m was from one retail warehouse deal and 136,000 sq ft (12,635 sq m) Cwmbran Retail Park the remaining £20m from WP Carey’s purchase - Office 7% from British Land for £32.3m, 6.4% NIY. of Admiral House, Newport Queensway, Admiral’s - Retail high street 6.25% • The other notable deal was the acquisition by newly-developed city centre office building. - Retail out of town 6.25% New York-listed REIT WP Carey of Admiral’s new city centre office building from Scarborough Group for £20m, 6.4% NIY. The 80,800 sq ft (7,507 sq m) building was completed in May 2014 on a 20 year lease with a tenant break option at 16 years. Scarborough Group is now considering the second phase of redevelopment of the Cambrian Centre and aims to apply for planning permission later this year.
www.alderking.com 18 Plymouth
Offices Noel Stevens T 01392 353093 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
250 500 20
200 400 400 15 360 (37) 325 330 150 300 (33) 16 (172) (31) 310 145 (30) 15 (162) 15 (162) 15 (162) 15.5 (167) (13) (29) 10 16 (172.22) 16 (172.22) 100 200 15.5 (166.83) 15.5 (166.83) 15.5 (166.83) 95 95 100 90 (9) (8) (9) (9) 5 50 100
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Demand remains weak. However lettings at • Grade A space is available on a design and build • Headline rents are being driven by the lettings at Sutton Harbour to accountants Francis Clark and basis but good quality existing stock is few and Sutton Harbour at £16 psf (£172 psm). Rain Consulting show there is demand at the top far between. • The majority of space is available in the £10 - end of the market, albeit in limited numbers. • Although supply has increased overall, the £12.50 psf (£108 - £135 psm) range. • The majority of occupiers are still seeking cost availability of good quality second-hand stock is effective space below 5,000 sq ft (464 sq m). limited. There are only a handful of 10,000 sq ft • Confidence is returning and we expect an (929 sq m) plus options available. increase in requirements to be seen in 2015. • The Ship at Derriford is the largest available • Further investment to create a sustainable rail space offering 51,065 sq ft (4,774 sq m) of offices. network across the South West peninsula is vital It can be converted to provide a total of 115,000 to supporting business activity. sq ft (10,684 sq m). • A £1.98m Council loan to help unlock further funding for the expansion of Plymouth Science Park was approved in late 2014.
Industrial Noel Stevens T 01392 353093 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
500 1,500 7 500 1,400 (46) 1,250 (130) 6 400 5 1,000 1,000 300 (64) 5.95 (64) 5.95 4 290 (93) (27) 750 5.95(64.04) 5.95(64.04) 5.95(64.04) 250 230 3 200 715 720 (23) (21) 200 500 (66) (67) (19) 550 2 (51) 100 250 1
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Demand for cost-effective space continues with • The drop in supply is attributed to a lack of new • There was no movement in headline rents in 2014. Macfarlane Packaging acquiring 12,600 sq ft (1,171 build in the market and demolition of dilapidated • However small units and trade counters are sq m) at Drake Mill Business Park. buildings. seeking rents in excess of £6 psf (£65 psm). • The largest recent transaction was the freehold • Supply will increase over the coming years as acquisition of 24,378 sq ft (2,265 sq m) at 62 space at South Yard becomes available. Given Valley Road, Plympton by Wakeman & Sons Ltd. the proximity to wharfage, this will meet the requirements from the marine sectors. • We are seeing the impact of a lack of development reflected in the quality of the remaining stock. • The break-up of large buildings helps meet demand for smaller premises.
Key sq ft (sq m)
19 Alder King Market Monitor 2015 1. Plymouth Science Park. Courtesy of Plymouth Science Park. 2. Artist’s impression of South Yard, 1 2 Plymouth. Courtesy of LHC.
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 25 (269) 13 15 (161) 15 (161) 15 10 (?) 20.5 15 (161.46) 15 (161.46) (140) 13 (140) 13
100 22.5 (242.18) 22.5 (242.18) 22.5 (242.18) 175(1,883.61) 175(1,883.61) (139.93) 13 (139.93) 13 (139.93)
150 (1,615) 150 (1,615) 10 (86) 8 (86) 8 150 (1,614.60) 5
50 10 (107.64) 5 8 (86.10) 8 (86.10)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Demand remains focused around Drake Circus • Rents have increased with headline figures • Plymouth remains popular with new restaurants with new openings from Jack Wills in a pop-up agreed at Marsh Mills and Broadway Shopping including The Stable, The Samphire Bush and Le store and the new retail offering from Theo Centre, Plymstock. Bistrot Pierre all opening last year. Paphitis’s brand Boux Avenue. • Out of town stock remained fairly static with new • British Land announced it is to develop Drake • A new four acre mixed use development stock coming to the market at a similar pace to Circus Leisure, a circa 100,000 sq ft (9,290 sq Ocean Boulevard is planned for Plymouth. The that being occupied. m) leisure scheme next to Drake Circus Shopping scheme will include 37,000 sq ft (3,437 sq m) of • Mutley Plain saw a number of long standing voids Centre. The £40 million development will include retail complementing a supermarket, student fill up in 2014. a 12 screen cinema operated by Cineworld, 13 accommodation and hotels. restaurant units and 450 car park spaces. • The out of town market saw an increase in • The high street saw new lettings to Saltrock, freehold sales. Both vacant and investment Optical Express and Games Workshop. opportunities saw an upturn in demand.
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
300 8 278.2 industrial 250 22% 7 office 200 56% retail high street 150 17% 6 retail out of town industrial 100 other office 5% 71.5 5 50 retail high street 26.33 13.62 9.63 retail out of town 0 4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • There was a significant increase in investment • Our current view of prime yields is as follows: • Approximately 20% of the deals were in the transactions compared to 2013. The level has - Industrial 6.25% industrial sector with lot sizes ranging from increased from £9.63m to over £70m. This is the £1.7m to over £6m. The largest of these was highest level since 2010. - Office 7% the purchase of Faraday Mill Trade Park by - Retail high street 6.25% Parabola Capital for £6.3m, 11.6% NIY. The circa - Retail out of town 6% 135,000 sq ft (12,542 sq m) trade park is multi-let to various tenants. • Another significant deal was the acquisition by Oval Real Estate of Langage Office Campus for £11.56m, 7.75% NIY. The office is let to EE with a lease expiry in 2028. • Derriford Hospital, a newly completed development, sold to Aviva for £22m, 6.1% NIY at the end of 2014. 83% of the income is from the car park and the remainder from office and retail tenants.
www.alderking.com 20 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 20 566 500 200 521 (53) 490 (48) 473 15 (46) 400 (44) 430 150 163 (40) (15) 300 10 (156) 14.5 (156) 14.5
100 13.75(148) 108 14.5 (156.07) 14.5 (156.07) (10) 200 (116) 10.75 (116) 10.75 68 5 11.5 (123.78) 50 62 10.75(115.71) 10.75(115.71) 54 (6) (6) 100 (5)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Take-up remained at similar levels to 2013 and • Availability decreased slightly due to a lack of • Rents remain in line with 2013 levels. still substantially below the five year average of new development corresponding with take-up. • With little modern accommodation available in 100,000 sq ft per annum (9,290 sq m). • Over 80,000 sq ft (7,432 sq m) of high quality SA1 and the city centre, headline figures should • There were less than 30 transactions throughout buildings still remain at Crucible Park, Swansea be maintained into 2015. 2014, the most notable of which included Vale, since first becoming available in 2008. • Out of town rents and incentives should continue Tui Travel taking 14,500 sq ft (1,347 sq m) at at the same level through 2015. Alexandra House and The National Autistic Society taking 2,559 sq ft (238 sq m) at 6 Phoenix Way.
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
2,500 2,755 2,755 5 800 (256) (258) 795 2,315 4.35 4.2 4.2 4.2 4.2 (74) 2,000 (215) 4 600 634 (46.82) (45.21) (45.21) (45) (45) 1,724 (59) 1,500 1,602 3 (160) (149) 400 472 461 (44) (43) 1,000 2
200 500 1 180 (17) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • 2014 saw a substantial increase in take-up • Supply fell in 2014 due to increased demand • Over the past three years rental levels have including the letting of 182,000 sq ft (16,908 sq which included transactions such as the sale of remained unchanged. m) to Trojan Electronics, turning the former Kings the 222,391 sq ft (20,661 sq m) former Signode • The high proportion of existing secondary stock Dock Building in to its new HQ. Factory on Fabian Way accounting for 13% of the and the limited amount of new stock being • Excluding the Trojan deal, take-up significantly previous year’s available space. brought to the market have hindered rental improved from same period in 2013. • Stock providing less than 10,000 sq ft (929 sq m) growth. • Approximately 60% of take-up is accounted for accounts for approximately 77% of all available by units of 5,000 sq ft (465 sq m) or less. stock.
Key sq ft (sq m)
21 Alder King Market Monitor 2015 1. Salubrious Place, Swansea. Courtesy of Mansford Real Estate. 2. CGI of Parc Tawe, Swansea. Courtesy of Hammerson. 2 2 3. CGI of Oyster Wharf, The Mumbles. Courtesy of Nextcolour Developments Ltd.
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 50 25
125 40 20
100 30 15 (215) 20 (215) 20 75 110 (1,184) 110 (1,184) 35 (377) 35 (377) 115 (1,237.80) 17 (182.99) 17 (182.99) 35 (376.74) 35 (376.74) 20 35 (376.72) 10 100 (1,076) 100 (1,076)
50 15 (161.45) 12 (129) 12 (129) 9 (97) 9 (97) 10 5 12 (129.17) 12 (129.17) 25 11 (118.40) 9 (96.88) 10 (107.64) 10 (107.64)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 cinema health & fitness A3 zone A headline rent out of town rent leisure headline rent • The proposed town centre regeneration remains • Hammerson has gained consent for a 240,000 • A3 demand remains strong with a new letting to uncertain whilst a new developer is sought. This sq ft (22,296 sq m) refurbishment of its Parc Las Iguanas reinforcing Wind Street as the prime has no doubt had an effect on demand. Tawe scheme but is currently appealing certain leisure location • Yours Clothing has taken space at 801 Oxford planning conditions in order to facilitate a start • The vast majority of The Boulevard scheme, Street and Sweet Scent and Iceland have both on site in summer 2015. between the River Tawe bridges and Princess taken space in the Quadrant Centre. • Nextcolour Developments Limited has Way, is complete. This will generate better links commenced preliminary works at Oyster Wharf, between the city centre and the waterfront Mumbles’ waterfront development which will and become a far more pedestrian-friendly include restaurants, new retail stores and a environment. spa/gym.
John Benson T 0117 317 1100 E [email protected] Investment James Nicholas T 029 2038 1994 E [email protected]
value of investment transactions £ms prime yields % investment by sector
140 8 2%
120 7 7% 113.9 100
6 industrial 80 retail high street 60 91% 5 other industrial 40 49.64 office 4 20 26.37 retail high street 8.65 17.9 retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 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 transaction during 2014 was in the Swansea for 2014 was £26.37m. This is a reduced - Industrial 7.25% leisure sector. In February 2014, Mansford Real level compared to 2013 but 65% of the 2013 Estate purchased Salubrious Place which offers figure was attributable to one single transaction - Office 7.5% a 116 bed Premier Inn Hotel, a Vue Cinema, - M&G’s 45 year income commitment to provide - Retail high street 6.75% nightclub, casino and an NCP car park, for £32m of development finance for student - Retail out of town 5.75% £24.10m. accommodation at Swansea University. • In the high street retail sector, Greenstone Stirling purchased 58-60 The Kingsway for £1.77m, 8.00% NIY. The property is let to The Co-Op for a further 9.5 years. • Looking at the industrial sector, Unit 1 Pemberton Retail Park, Llanelli sold for £500,000, 7.10% NIY. The unit is let to Screwfix on a 10 year lease from January 2014.
www.alderking.com 22 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 1,306 1,320 15 (121) (123)
250 1,000 1,150 (188) 17.5 (188) 17.5 18.5 (199.12) 1,020 16 (172) (107) 15 (161)
227 (95) 16 (172.22) 16 (172.22) 200 205 800 10 199 (21) (19) 790 15.75(169.53) 15.75(169.53) 15.75(169.53) 150 170 (18) 600 (73) (16) 100 400 5 85 50 200 (8) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 town centre out of town demand supply headline rent • 2014 witnessed the highest level of take-up since • Overall supply reduced as a result of an improved • Town centre rents have shown a small before the recession. level of demand from office occupiers. improvement due to an overall reduction in • Significant out of town demand came from • There has also been a reduction of supply as opportunities for occupiers. Nationwide which took 29,000 sq ft (2,694 sq m) at poorer quality stock is converted for residential • Quoting rents are being reviewed in many cases the Trilogy Building at Kembrey Park and Swindon use. This has in most cases been whole vacant as landlords seek to take advantage of improved Silicon Systems which took 34,000 sq ft (3,159 sq buildings but it has led to some displacement of market confidence. m) at Interface House, Royal Wootton Bassett. office occupiers. • Tenant incentives are reducing as landlords’ • There was a significant improvement in the take- • There is now a very small supply of good quality confidence begins to improve. up of in town office buildings, with many service larger format office accommodation and this has providers for the electrification of the mainline led to some speculative refurbishment taking railway seeking representation close to the place. station. In town transactions represented 30% of • Supply is expected to continue to fall as a result take-up. of improved demand from both office occupiers and residential developers.
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) 6.75(73) 1,200 (244) 1,184 2,302 6.75(72.65) 6.75(72.65) 6.75(72.65) 1,000 1,043 2,000 (214) 4 (127) 1,900 (97) 986 1,800 800 (176) 1,723 (92) 1,500 (167) (160) 3 600 557 1,000 2 400 (52) 500 1 200
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Demand during 2014 was at its lowest level • There has been a limited reduction of supply as • There were cases in 2014 where the quoting rents since before the recession but the number of the former Triumph and TD Packaging buildings, were achieved - a direct result of the low level of transactions continued at a similar level to both at Groundwell Industrial Estate, became good quality stock. previous years. vacant in 2014. • Incentives such as rent free periods, stepped • There was an absence of large transactions in • There is one speculative new build scheme rental arrangements and landlords paying for 2014 which has impacted annual take-up. providing various buildings at the site of the tenant fit-out works are reducing. • The largest letting in 2014 was Signalling former Farepak building at Westmead and • There is a clear correlation that tenants will Solutions Limited’s move to Dorcan Industrial the 100,000 sq ft (9,290 sq m) Metro Building pay for better quality accommodation. New or Estate closely followed by Aldi taking two further at Groundwell Industrial Estate is being refurbished space is finding occupiers more buildings at South Marston Park. comprehensively refurbished. easily. Poor quality space is increasingly difficult • There are several large long term requirements • The most active sector of the market throughout to let. which are anticipated to come to fruition early 2014 was sub 5,000 sq ft (465 sq m) with some in 2015. 57% of transactions taking place in this size bracket. Key sq ft (sq m)
23 Alder King Market Monitor 2015 1. Newsquest Offices, Old Town, Swindon. 2. 67K Athena Avenue, Swindon 2 3 3. CGI of Regent Circus, Swindon. Courtesy of Ashfield Land.
Retail & Leisure James Gregory T 01793 428106 E [email protected]
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
250 35 30
30 25 200 25 20 30 (322.92)
150 28 (301) 28 (301) 20
28 (301.38) 28 (301.38) 28 (301.38) 15 15 100 18 (193.74) 18 (193.74) 18 (193.74) 18 (193.74)
150 (1,615) 150 (1,615) 10 15 (161) 170 (1,829.80) 170 (1,829.80) 10 50 150 (1,614.58) 80 (743) 80 (743) 80 (743) 5 5 9 (97) 11 (118.40) 11 (118.40) 11 (118.40) 11 (118.40) 9 (96.87) 9 (96.87) 9 (96.87) 9 (96.87) 0 100 (1,076.35) 100 (1,076.35) 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Regent St. Brunel Centre cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • The majority of the Regent Circus development • Great Western Way has seen McDonalds open • The extension of the Outlet Centre by McArthur opened in November and December; the a new two storey drive thru facility and Wren Glen/Henderson Investors is now complete. This Cineworld is due to open in February. Not only Kitchens is currently on site carrying out a has allowed several existing occupiers, including has the scheme immediately changed hands with complete rebuild of the former Ferrari car Marks & Spencer and Next, to expand as well as very strong investor appetite, the improvement showroom. attracting new retailers. New operators to the to the immediate vicinity and occupier demand is • Waitrose opened its first Swindon operation at food court including Wagamama have also been clear to see. Wichelstowe and is trading well ahead of target. secured. • H&M is taking a new 25,000 sq ft (2,326 sq m) • Aldi has secured planning permission for its • Following a joint venture agreement, several store in The Parade in the town centre. fourth outlet in Swindon at Shaw in West leisure facilities owned by Swindon Borough • Further public realm projects are planned for Swindon. Council are now to be refurbished and run by the town centre including Havelock Square, Greenwich Leisure Limited. demonstrating the optimism for the main retail area.
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
100 9
80 8 76.5 industrial 67.2 60 7 office 62.5 37% 53% other 40 6 38.2 industrial office 20 5 10% retail high street 3.77 retail out of town 0 4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • There was an increase of circa 14% in the value • Our current view of prime yields is as follows: • One of the largest investment transactions in of investment transactions in Swindon over the - Industrial 6.5% Swindon was the acquisition at South Marston last year, £76.5m being the highest value of Park by London Metric in March for £22.1m, transactions seen since pre-2009. – Office 6.5% 6.45% NIY. Oak Furniture Land is the tenant – Retail high street 6.5% with 8 years unexpired. The distribution centre – Retail out of town 5.75% has un-implemented planning consent for a 150,000 sq ft (13,935 sq m) extension. • Another significant transaction was in the leisure sector. Regent Circus was purchased by UK CPT Ltd for £40.50m, 5.30% NIY. Tenants include Morrisons and Cineworld. • In the office sector, Drakes Meadow let to Thrings LLP until 2021 was purchased for £3.8m, 10% NIY.
www.alderking.com 24 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 16 125 120 120 170 14 150 164 (16) 165 156 160 17 (183) 17 (183) (11) (11) (15) (15) (15)
110 16.5 (178) 16.5 (178) 100 (14) 12 17 (182.98) 17 (182.98) 17 (182.98) 100 (10) 125 (9) 90 10 16.5 (177.60) 16.5 (177.60) 16.5 (177.60) 75 (8) 100 8 75 50 6 50 4 25 25 2
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 town centre out of town demand supply headline rent • Leasehold enquiries were relatively consistent • A number of buildings remained available • No new builds were undertaken in 2014, either in throughout 2014. throughout 2014 in both the town centre and out town or out of town. • Demand for the out of town market is polarised, of town market, although they tend to be of lower • Incentive levels remained broadly similar to 2013 with a majority at sub 3,000 sq ft (279 sq m) and quality. and are still generally lower in the out of town some further demand between 10,000 - 20,000 • The majority of accommodation is still within the market. sq ft (929 – 1,851 sq m). town centre and is of mixed quality. • Town centre rentals continue to be depressed by • Local occupiers are increasingly confident in their • Changes in the public sector accommodation the imbalance in demand and supply. attitude towards relocation in order to improve strategy could see further accommodation enter their accommodation. the market in 2015.
Industrial Andrew Maynard T 01823 444879 E [email protected]
demand 000s sq ft supply 000s sq ft headline rent £psf
500 300 8 285 270 7 250 (25) (26) 400 250 250 395 6 (23) (23) 7 (75) 7 (75) (37) 200 220 300 (20) 5 6.6 (69.96)
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 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Requirements for the M5 around the Taunton • Supply rose slightly during the year but there is • Rents remained stable with some improvement area improved considerably in 2014. still an undersupply of accommodation within the for secondary property rental levels. • Demand from Hinkley C supply chain companies Taunton market. • It is very likely that rents will increase in 2015 as started to increase in Q4 2014 and is likely to • This under-supply is particularly concerning in demand continues to outstrip supply. continue in 2015 assuming the final investment the 20,000 - 50,000 sq ft (1,858 – 4,645 sq m) • Incentive levels are likely to reduce as decision is made in Q1 2015. size range, especially given the increased demand competition for properties increases. • Demand from local companies and the for units of this size. distribution sector has increased and sentiment is • Speculative development has been seen in much more positive. neighbouring towns but there is still a lack of immediate opportunities in Taunton.
Key sq ft (sq m)
25 Alder King Market Monitor 2015 1. Artist’s impression of Network Rail’s proposed redevelopment of Taunton railway station. 2. Unit 6K6, Blackbrook Business Park, Taunton. 2 3 3. Third Way Bridge, Taunton. Courtesy of Graham Shaw.
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 16 19 (205) 19 (205) 15 15 15 19 (204.51) 19 (204.51) 19 (204.51) (172) 12 12 12 12 75 12 10 10 (161) 10 (161.45) (161.45) 90 (968) 90 (968) 90 (968) 90 (968) 90 (968) (129) 50 (129) (129.16) 5 5 (129.16) (129.16) (86) 8 (86) 8
25 8 (86.11) 8 (86.11) (107.64)
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 East St. Old Market Centre cinema health & fitness A3/A4 zone A headline rent out of town rent leisure headline rent • Occupancy levels remain relatively strong in the • Construction of the northern inner distributor • There has been increasing interest in the town prime and secondary areas of the town. road is progressing and will improve accessibility from A3/A4 operators with a number of deals • Several national retailers and restaurants chains through the town, potentially opening up new likely to fall into place in 2015. Nando’s opened in are in advance discussions to take space in the opportunities as well as improving some existing Fore Street during 2014. town, which bodes well for 2015. schemes. • Further new opportunities within the town will • Taunton Rethink, a study to consider the future • A planning application for the relocation of Lidl only be possible with large mixed use schemes direction of the town centre, was published at the to a new site in Castle Street (opposite Tesco) at Firepool, Coal Orchard and the Orchard beginning of 2014. Good progress has been made is likely to be decided in Q1 2015. Elsewhere the Shopping Centre. with proposals for the Firepool regeneration area supermarkets have been quiet. to the north east of the historic town centre, including retail and leisure activities.
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 8
40 7 15% 36.10 29% 30 6 office retail high street 20 21.45 5 39% retail out of town industrial 17% 17.02 other 14.03 office 10 4 retail high street 6.03 retail out of town 0 3 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 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 warehouse transaction was 2014 fell by circa 21% from £21.45m in 2013 to - Industrial 6.75% the sale of St Johns Retail Park in June 2014 to £17.02m. The average investment value over the Threadneedle for £6.66m, 7.45% NIY. Tenants last five years is £18.93m. - Office 6.75% are Go Outdoors and DFS with circa 16 years • The largest investment deal was in the retail - Retail high street 5.5% unexpired. warehouse sector with St Johns Retail Park - Retail out of town 5.75% • In the high street retail sector, CBRE Global selling for £6.66m. Investors purchased 47-50 Fore Street, let to WH Smith for 10 years, for £2.9m, 6.50% NIY. • In the office sector, the circa 63,000 sq ft Riverside Chambers sold in March for £4.9m, 15.6% NIY.
www.alderking.com 26 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 55 14 50 (5) 50 (5) 200 200 200 (5) 12 40 (19) (19) 187 40 170 (17) 10 150 (16)
(4) (118) 11 (118) 11 30 8 11 (118.40) 125 11 (118.40) 100 (12) 10.5 (113.02) 25 6 (91) 8.5 (91) 8.5 20 (2) 4 8.5 (91.49) 50 10 2
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 city centre out of town demand supply headline rent • Office take-up increased for the first time in five • The supply of office accommodation increased • Ground floor city centre offices with parking can years but is still below 2010 levels. compared to 2013. achieve a premium rental for certain occupier • A single transaction can have a significant impact • Some larger freehold buildings received more groups. on the figures due to the size of the market. interest from applicants looking for a change of • Shorter lease terms with five year or earlier break • The market is further distorted by the acquisition use. clauses are becoming more common. of some buildings for alternative use - where • There continues to be an over-supply of • In conjunction with the above, incentives in the identified these are excluded. secondary accommodation above ground floor form of initial rent free periods or stepped rental • Preference remains for modern city centre with no parking in the city centre. arrangements are still common. accommodation with car parking. • While there is some new development proposed • Demand at Truro Business Park has improved at Truro Business Park, such development is with a number of transactions taking place. generally only viable with the assistance of grant funding. • There are increased freehold occupier enquiries.
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) 437 400 380 (41) 6 200 217 (37) (35) 7 (75) 7 (75) 200 (20) 300
(19) 7 (75.34) 7 (75.34) 7 (75.34) 150 4 200 100 200 90 (19) 2 (8) 80 100 50 60 (7) (6) 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent • Demand increased slightly although the figures • Supply has increased from the previous year. • Rents have remained steady for prime modern reported can be distorted by a small number of • New development is generally only viable with the industrial accommodation. individual transactions. assistance of grant funding. The latest band of • Tenants are generally requesting shorter lease • Demand remains focused on modern ERDF funding has ended, with further availability terms with more frequent Options to Break. accommodation with good access to the A30. not anticipated to come on stream until mid-2015. • Incentives in the form of rent free periods or • Demand is often latent and not apparent until a • There is an over-supply of older accommodation stepped rental arrangements are becoming more specific property comes to the market. and an under-supply of modern space. common, especially in older accommodation, in • Unsatisfied demand exists in locations with a lack • There have been two recent grant funded order to secure lettings. of supply, often as a result of ageing stock and schemes in Cornwall. The development at • Owner occupier or personal pension fund limited development over recent years. Quintrell Downs near Newquay is all taken but demand for freeholds is becoming more popular, • Increased freehold occupier enquiries are being further supply will not be forthcoming without especially for smaller businesses. received. grant funding.
Key sq ft (sq m)
27 Alder King Market Monitor 2015 1. Lysnoweth House, Truro. 2. Brunel Business Park, St Austell. 2 3 3. Old Vicarage Place, St Austell.
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 (215) 20 100 (215) 20 (215) 20 20 (215.27) 20 (215.27) 20 (215.27) 75 10 10 125(1,345.5) 125(1,345.5) 110 (1,184) 110 (1,184) 110 (1,184) 50 5 5 25
0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Pydar St. A3/A4 zone A headline rent out of town rent leisure headline rent • Truro vacancy rates – already below the national • There was limited out of town activity in Truro in • The retirement sector is particularly active average – dropped in the second half of 2014. 2014. with McCarthy & Stone well-progressed with • Primark confirmed it will take 50,000 sq ft • A new Waitrose is now well under construction on its redevelopment on the former Brookdale (4,645 sq m) in Lemon Quay, resulting in other the eastern side of the city. Hotel site, and Churchill underway with the redevelopment of the former Police Station site. relocations and extension of the building. • Helical Retail has submitted plans for • 3 Store has taken the former gaming shop at 6 90,000 sq ft of non-food retail development • Discussion continues regarding the possible Pydar Street. on the Truro City Football Club site. construction of a Stadium for Cornwall at West Langarth. • Further applications, including food store proposals, are being considered in the Threemilestone area.
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
50 8
40 42.75 28% 7 retail high street 30 retail out of town 6 72% 20 industrial office 14.76 14.05 5 10 retail high street 6.94 0 retail out of town 0 4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 value of investment transactions prime yields investment by sector • The value of investment transactions fell • Our current view of prime yields is as follows: • The largest transaction was Threadneedle’s significantly in 2014 from £42.75m to £14.05m. - Industrial 6.5% purchase of Newquay Road Retail Park in July However £40m of the £42.75m total for 2013 was for £10.1m, 6.57% NIY. Tenants at the circa made up by the sale of Lemon Quay, a multi-let - Office 7% 50,000 sq ft (4,645 sq m) retail park include retail parade that sold to Corbo Ltd. - Retail high street 5% Harveys, Dunelm, Dreams and Hobbycraft. • The majority of the 2014 value is in the retail - Retail out of town 6.5% • The other transaction was Colliers Capital’s warehouse sector. purchase of 11-12 Boscawen Street. The tenant is Waterstones and the property was sold for £3.95m, 6.50% NIY.
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 have residential land on either a leasehold or freehold saved clients in excess of £7.5 million each year on basis. Winning EGi’s Most Active Agent award based their occupied portfolios and a further £1.5 million on the number of transactions concluded in the per year on empty property rates. Specialist services South West for 13 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 2015 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 @alderking.com
January 2015. 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.