AROUND THE SOUTH WEST AND SOUTH WALES WWW.PROPNEWS.CO.UK
Greater Bristol Industrial
The occupier market within Bristol is still looking healthy and there are
enough enquiries and requirements buzzing around to keep the industrial
agents focussed on completing deals. Current unsatisfied demand is an
Will Neill
estimated 3.2 million sq ft and whilst the market for big box distribution
Surveyor
facilities has been well addressed, the same cannot be said for new, small
Knight Frank
to medium sized units under 40,000 sq ft. For the limited schemes in the
Bristol
pipeline, quoting rents have been rising in reflection of strong unsatisfied
demand in the market for good quality product as supposed to current yield
I want to try and begin this column by putting an pressure and high build costs.
optimistic but cautious spin on the condition of While there is still generally a good occupier demand across the city, the
the economy and the knock on effect that this is same can't be said for small business. Supply of industrial units under
having on the Bristol industrial market. 5,000 sq ft is high in the Bristol area and demand is low. Small local
I am sure everyone will agree it is hard to remain businesses have battened down their hatches and owners are troubled by
positive when the media are manufacturing pessimism, making decisions which they feel bare too much risk to their businesses and
but let us look at the facts. Inflation is at an 11 year high of 3.8 % and interest workforce. This end of the market is bread and butter for many industrial
rates sit at 5 %, however the underlying economy is still strong. teams and, in my opinion, the media have played a large part in stagnating
Compare this to the last property crash in the early 90's which experienced occupier activity at this level.
double digit interest rates, runaway inflation and high unemployment. It is The current down turn in the market was first felt within the investment
safe to say that things certainly could be worse. Ask any of the 'wise old heads' departments and this is where I hope it will end. As initial yields rise and values
in your office who have witnessed several market cycles, and their advice will fall, cash rich investors are waiting for the right moment to invest again,
be...'Sit tight, keep positive and we will pull through this. When we do we will hopefully providing the necessary spark which will ignite the market once
all begin to enjoy benefits of market growth again'. again.
Greater Bristol Offices Cardiff, The Vale and
The Valleys
Tom Merrifield
Alastair McLeod
Surveyor
Graduate Surveyor
Fletcher Morgan
Atisreal
Cardiff
Bristol
With the summer period now on us, the usual lull
in enquiry levels has been compounded by the
significant drop in enquiries experienced in the
first half of 2008. Where the summer period in
previous years has meant a temporary reduction
in active requirements and numbers of deals being done, with an
anticipated September pick-up, this year the thoughts have been on
With recession a very real prospect and the Prime Minister talking exactly when the rise in enquiries will be, with predictions of the effect
of tightening belts, only the weather is gloomier than the economy. of global credit crunch running into 2009.
However, in terms of Bristol, the office market to date has proved In terms of those market transactions which are taking place, in the
to be robust and there are still many reasons to be positive. industrial and trade counter sectors in Cardiff we have recently completed the
City centre take up figures for the second quarter at 207,400 sq ft letting of some 65,000 sq ft at Trident Trade and Industrial Centre to Encon
compares well to 169,100 sq ft achieved in the first quarter, even before Insulation for trade occupation with further interest in smaller 6,000 - 15,000
Bristol PCT's acquisition of 54,600 sq ft in South Plaza. Other notable sq ft units from the trade counter market, establishing this as a recognised
deals include the 14,418 sq ft taken by Faber Maunsell in Portwall Place trade counter location.
and 12,671 sq ft by SN Systems in Hartwell House. To east Cardiff, Capital Business Park is continuing to grow with Phase
Out of town take up in the second quarter of 56,325 sq ft, with four 6 now well under construction and recent interest being generated in some
deals over 5,000 sq ft, was down on the first quarter figures but only of the remaining vacant units at Phase 5. Industrial Business Units ranging
marginally below that of the same period in 2007. The out of town market from 3,225 sq ft are available at the park.
is certainly experiencing a good level of occupier activity with a number To the west, an area of the city which has benefited from increased
of unsatisfied requirements in the 5 - 10,000 sq ft bracket and limited occupier activity over past 12 months is Llandough Trading Estate which has
supply of good quality space. produced six lettings, most recently to Espex Batteries, with rentals at circa
Development of new space continues in the city centre where some £5.25 psf being achieved.
650,000 sq ft of speculative Grade A office accommodation is planned The Cardiff city centre office market has seen some significant activity
including Finzels Reach, Bank Place and Cabot House, adding to those with Centrica taking circa 70,000 sq ft at Callaghan Square from MEPC /
already started at Temple Quay 2, Temple Back and The Paragon. Out Rightacres, and British Transport Police also opting to locate here acquiring
of town phase 2 at Brook Office Park could be fully committed prior to PC, circa 25,000 sq ft, consolidating the location as one of Cardiff's premier office
underlining the strength of the market and Brabazon Office Park phase districts. The construction of nearby Capital Link by J R Smart (Builders)
2 will be on site this month with one 8,000 sq ft building already Limited is continuing at pace, which will offer 56,000 sq ft of Grade A office
committed to by Sovereign Housing Association. space purposely designed to offer flexibility for single or multi-tenant
Other speculative development is underway at Harlequin Office occupation.
Park, Emersons Green where 53,900 sq ft is being constructed in three Another notable recent city central office transaction was the letting of 5th
Grade A specification buildings, and Trinity Park which will provide a floor at Longcross Court, Newport Road to White Young Green. The
further 33,000 sq ft. It will be interesting to see how these schemes fair transaction comprised some 7,000 sq ft and achieved rental level of
over the coming months. £13.50 psf.
In terms of the overall market it is true that occupiers are being less In the retail sector, we have recently completed letting of 18,500 sq ft at
bullish and a number of agreed deals have been put on hold. We have Avenue Retail Park, Newport Road to Marks and Spencer Simply Food, with
experienced enquiry levels dropping but those that remain active tend store opening due end of July.
to be serious about taking space. Only time will tell but with the Outside of Cardiff, Sainsburys this month acquired a 14.5 acre site at
traditionally quieter summer period almost amongst us we may not know Crindau for development of a new store together with major infrastructure
until September how the market is going to hold up against wider works which will open up the entire Crindau area for a major mixed use
economic factors. development.
Property News August 2008 17
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