    |
|||
        |
|||
Business Parks
Boost
Demand from government related contracts, finance and hi-tech industries
is fuelling the growth of the south west’s business parks, according
to GVA Grinley’s bi-annual Business Parks Review: Autumn 2007. Prime
office rents for out-of-town space in the South West increased by 5.7%
over the last twelve months – the highest rental increase of all
UK regions and twice the national average.
Ben O’Connor, regional head of office agency and development at GVA
Grimley incorporating Osmond Tricks in Bristol says; “Rental growth
continues to boost developer confidence and over the first half of 2007
the amount of space under construction out-of-town has risen considerably.
Growth in the other UK regions has not been as strong – Scotland
for example has recorded zero rental growth over the same period, and
the North West just 0.9%.
Larger organisations are favouring the M4/M5 interchange, although an
increasing number of requirements are also considering Swindon and Gloucester
for price comparison purposes. South of Bristol, small to medium sized
organisations are seeing the benefits of being located in less congested
locations such as Portishead, Clevedon and Weston-super-Mare.
To meet this demand, the amount of space under construction has risen
to 34,500 sq m at the end of June 2007, compared to 17,500 sq m 12 months
earlier. Schemes under construction included 15,000 sq m at Aztec West
in Bristol, 4,300 sq m in the final phase at Bristol Business Park, and
4,000 sq m at Gloucester Business Park.
The south west still continues to record the lowest vacancy rate of all
UK regions, even through the amount of space available increased to 42,000
sq m, pushing the vacancy rate up from 6.5% to 7.8%, yet still well below
the 11.2% recorded three years ago. Nationally availability has risen
by 3% over the last six months to 13.1%, the highest level since we began
monitoring the market in 1995. The North/South variation is still significant
with vacancy rates varying from 19% in the northeast, 15.2% in Scotland,
and 11.8% in the southeast.
Prime office rents for out-of-town space in the region increased by 5.7%
during the last 12 months. Rents ended the first half of 2007 at £242
psm in Bristol,, £199 psm in Swindon, £170 psm in Cardiff
and £153 psm in Plymouth.”
Office Market Positive
Lambert Smith Hampton has published its annual M4 Corridor Office Market
Report, providing an authoritative snapshot of office markets in 13 key
centres along the motorway route, from Hammersmith in West London to Swansea
in south Wales. As part of the research, trends and predictions are reported
for Bristol and Swindon.
Dr Arezou Said, LSH’s head of research, said: “Based on data
from across our unrivalled national network, our analysis shows that activity
levels are up across all of the M4 office markets, some of which are enjoying
record rents and we predict further rental growth over the next year as
the market continues to improve.”
Key findings for the Bristol and Swindon markets include:
The Swindon market remains characterised by smaller transactions with the majority of lettings under 5,000 sq ft. A total of 214,000 sq ft was transacted last year and indications are that take-up this year will be similar.
Much of the activity in recent years in Swindon has been focused on out of town business parks, but new initiatives are underway to rejuvenate the town centre and provide occupiers with a great choice of accommodation. One example is Amec and Morley’s joint venture to redevelop the town’s Exchange area, offering 600,000 sq ft.
Peter Musgrove, director at LSH’s Bristol office, commented: “The report paints Bristol’s office market forecast in a particularly positive light, with take-up in the first half of 2007 higher than the whole of 2006. Developer interest has also returned and a number of new schemes are springing up; Hartwell House and Portwall Place, comprising 55,000 sq ft and 170,000 sq ft respectively, will come to the market this year and 150,000 sq ft of this has already been pre-let.”
Care Home Consolidation
Richard Lunn, director and head of care at Christie & Co writes:
“This year has continued to see vibrant activity in the care home sector, which should continue throughout 2007. While the volume of transactions has remained at a similar level to last year, the average sale price for individual care homes has risen to £1.63m compared with £1.5m in 2006.
Vendors have been enjoying a fabulous marketplace and it will continue to thrive. In the past 12 months, for instance we have seen an increase in demand for new-build sites and land for development.
This trend has been triggered by several factors. First, the lack of availability of quality existing care homes, particularly in the southeast of England, coupled with improved profitability has pushed up going-concern values.
In addition, stricter development regulations imposed by the CSCI have also increased operator interest in new-build. Standards for new-build homes are ahead of many existing care homes, meaning we are seeing the development of a two-tier market.
And while in the past it has been difficult for care home operators to compete for new sites with residential developers, this is changing. Planners increasingly understand the benefit of care home developments – particularly that they are employment generative and produce less traffic compared with residential housing.”