The Business Exchange Swindon & Wiltshire December/January edition 2014 | Page 20

COMMERCIAL PROPERTY

ROBUST OUTLOOK FOR SWINDON’S
COMMERCIAL PROPERTY MARKET
Despite concerns over the Eurozone, recent official figures on the
UK economy remain upbeat. Businesses remain firmly in expansion
mode and the Swindon commercial property market certainly
echoes this sentiment. The market is continuing to show signs
of improvement across the different sectors and tenant demand
remains strong across both the office and industrial markets.
Swindon’s town centre office market has
lead and re-investing in their buildings
performed well over the last 12 months with
with works underway at Minton Place and
significant office lettings to AMEY Rail, First
The Platform (formerly known as the UK
Great Western and Pre Pay Technologies
Life Centre).
across three town centre office buildings The town centre office market is also
SN1, Holbrook House and Station Square.
proving popular with investors. SN1 (which
Total town centre take up as of Quarter
was sold prior to auction) is believed to have
3 2014 stood at 60,325ft² which is the
traded in excess of its guide price of £3.5
highest volume of town centre space
million and there are also firm expressions
transacted since 2008. With a number
of interest in Station Square. The guide price
of unsatisfied requirements still in the
for Station Square is £8,300,000 which
marketplace and some of the poorer quality
reflects a net initial yield of 8%.
buildings likely to be converted to alternative
The out of town office market continues
uses, we are faced with a potential squeeze
to dominate take up figures with
on the availability of good quality town
approximately 118,000ft² disposed of as of
centre office accommodation. There are
Q3 2014. The most notable deals in 2014
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already examples of landlords taking the
have been the letting of Interface House in

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Corporate Property Acquisition
Property Strategy
Project Coordination
Portfolio & Asset Management

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Chartered Surveyors I 0844 3356144 I www.edwardpreece.co.uk
20

THE BUSINESS EXCHANGE 2014

Royal Wootton Bassett to Swindon Silicon
Systems and the letting of 29,000ft² to
Nationwide Building Society at the Trilogy
Building on Kembrey Park. With in excess of
100,000ft² of out of town accommodation
believed to be in solicitors’ hands we
anticipate a positive start to 2015.
Despite improved levels of activity there is
currently no speculative office development
on the horizon and a distinct lack of readily
available good quality office stock. With
office availability in decline and take up
on the rise, we may well see a continuing
upward pressure on rents and a further
reduction in the level of incentives made
available to tenants for better quality stock.
The industrial market continues to suffer
from an undersupply of good quality larger
stock which remains a concern amongst
local agents. Take up as of Quarter 3 2014
stood at 261,000ft² against total take up
figures of 986,000ft² and 1,184,000ft² in
2013/2012 respectively. The key differential
here is the lack of larger transactions with
the bulk of activity being generated at
the smaller end of the market. Indeed
there has only been one transaction above
50,000 sq ft during the first 9 months of
2014 although there are a number of larger
transactions believed to be in solicitors’
hands which could see a late surge in
activity.
Supply has remained relatively static with
an estimated 1.5 million sq ft available,
although 60% of this space can be
attributed to older, poorer quality facilities
which would benefit from comprehensive
refurbishment /redevelopment. There
is evidence to suggest that landlords
appreciate that there is a demand for better
quality stock in the town as evidenced by iO
Group’s speculative refurbishment of Avro
Gate (South Marston) and Threadneedle’s
refurbishment of 67k Athena Avenue.
Despite a difficult first half to the year
confidence remains high in the Industrial
market which has, after all, been one of
the best performing sectors throughout the
recession. Glenmore’s decision to build out
Phase One of the new Glenmore Business
Park scheme at Westmead Industrial
Estate is the first speculative development
in the town since 2007. This scheme will
comprise 20 small units and one in excess

of 30,000ft² which will appeal to those
applicants looking for better quality stock.
The largest disposal in the town as of
Quarter 3 was the 53,000ft² letting of the
former Biomet facility at Dorcan which
was let to G J Handy. Swindon based JB
Global also underpinned its commitment
to the town by renewing its lease on the
210,000ft² building at Cheney Manor.
Following impressive take up figures in
2012 and 2013 supply and demand issues
associated with good quality industrial/
warehouse accommodation are likely to
place an upward pressure on rents especially
at the smaller end of the market. We are
also likely to witness reduced levels of
incentives made available to occupiers as
competition for good quality stock builds.
To conclude, confidence remains high in
both the office and industrial sectors and
the decrease in the level of good quality
stock across both sectors will continue to
place pressure on headline rents. The level
of incentives traditionally made available
to occupiers could reduce further although
the market does appear to be finding
equilibrium.

Daniel Smethurst, pictured above,
is a qualified Chartered Surveyor who
started Smethurst Property Consultants
earlier this year. Danie