Business blog: Property market showing signs of recovery
September 26, 2012
Stephen head is partner and head of business space at property consultants Hicks Baker
The upturn in the local property market at the end of last year was not sustained in the first months of 2012 but is now showing signs of recovery.
Research by Hicks Baker for the latest Reading Development and Investment Review* has shown that take-up for the first six months of this year was only 56,535 sq ft in six transactions with only one letting in excess of 10,000 sq ft, Cybersource’s acquisition of 20,700 sq ft at the Verizon building (now being marketed as ‘Space’) at Junction 11.
However, Reading office take-up for the year to date has now risen to 142,495 sq ft, thereby showing some signs of improvement following the disappointing start to the year.
Hicks Baker has been involved in a number of the town’s more significant deals, including 7,619 sq ft let at Apex Plaza to Capital Professional Services, 8,219 sq ft acquired at Arlington Business Park on behalf of SPP Pumps and 7,736 sq ft acquired for Care UK at Hawker House.
However some major transactions are in the pipeline which could boost the year-end total further.
Reading Borough Council decided in May to relocate the civic offices to Aberdeen Asset Management’s Bridge Street Plaza (89,000 sq ft) and Chinese telecoms giant Huawei is widely reported to be under offer at 300 South Oak Way which, at 139,239 sq ft, is the largest of the former Cisco buildings at Green Park now being offered by the new owners, Oxford Properties.
So while the total amount of space taken-up might be little changed on 2011 by the end of the year, we predict that the number of transactions will be down significantly.
The lack of good quality accommodation in Reading town centre kept upward pressure on rents during 2012. Reading, therefore, has not seen the reductions in rents experienced in neighbouring towns such as Maidenhead and Bracknell. The market here has responded to the tougher conditions with extended rent-free periods and other inducements.
Quality town centre space now available is largely confined to three buildings totalling around 150,000 sq ft and the majority of that (89,118 sq ft), is in The Blade.
*The Reading Development and Investment Review will be available later this year.