Leisure InvestmentIndustrial Retail LandOffice
Market Monitor South West of England & South Wales
2015
Contents
2 Welcome
3 Acrosstheregion
5 Bath
7 Bridgwater
9 Bristol
11 Cardiff
13 Exeter
15 Gloucester
17 Newport
19 Plymouth
21 Swansea
23 Swindon
25 Taunton
27 Truro
29 Aserviceoverview
2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.
AlderKingMarketMonitor20151
2014 Highlights£1.07 billionTotalvalueofSouthWestand
Walesinvestment.
£267.8 millionSaleof50%stakeinCabotCircus,
BristoltoAviva-theregion’slargest
investmenttransaction.
£28.50 per sq ftNewrecordBristolofficerent.
1.75 million sq ftLowestBristolindustrialsupplyfor
11years.
400,000 sq ftQ4Bristolcitycentreofficetake-up,the
highestquarterlytake-upfor20years.
22% upCardiff’sfiveyearaverageofficetake-up.
1 million sq ftBristolcitycentreofficespaceidentified
forresidentialconversionviaPDR.
Welcome
Market Monitor 2015 looks at the occupational and investment markets in the South West of England and Wales over the past 12 months, with data, trends and analysis on 12 key regional centres including, for the first time, Bridgwater, Somerset.Summary
2014 commercial property activity in the South West and Wales was the strongest since the financial crisis, with strong occupational demand driving a buoyant regional investment market and supporting the return of speculative development in a number of locations.
Last year saw a 51% increase in the level of office and industrial take-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 majority of centres recorded rental growth over the course of the year.
The region’s new speculative office and industrial developments secured high profile lettings in 2014 with some achieving record rents, confirming occupier appetite for Grade A space. There is now a pressing need to bring forward more speculative development in key locations over the 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
2www.alderking.com
Industrial
Offices
Across the region
(sqm)sqft
occupational summary
• Take-upincreasedin2014onthepreviousyearinallbutNewportwiththelackofgoodqualitysupplyincreasinglyaconstrainttoactivity.
• Whilesupplyincreasedinsomecentres,thecorelocationshaveseenfurtherdecreasesinavailability.
• Themajorityofcentreswillnowsupportspeculativedevelopment.
• SupplyinBristolisnowatitslowestlevelfor11years.
• DemandisincreasinglyfocusedonbetterspecifiedspacewithnewbuildactivitycurrentlyunderwayinBristol,Gloucester,Wellington,BridgwaterandTruro.
• Withanimprovingnumberofmediumsizedrequirements,occupiersareincreasinglyonlyabletosatisfytheirneedsviathedesignandbuildroute.
• Keyareasofgrowthwillbefromoccupiersinthelogisticssectorandparticularlythoseinvolvedwithinternetfulfilment.
officeheadlinerent£psf
industrialheadlinerent£psf
0
10
8
6
4
2
occupational summary
• 2014sawofficetake-upacrosstheregionincreaseagainwithBristol,Cardiff,Newport,SwindonandGloucesterachievingstrongimprovementsinperformancecomparedwith2013.Inparticularitwastheincreaseintake-upofmodernGradeAspacewhichboostedthemarketinmanylocations.
• Theoverallleveloftake-upinsomelocationsisnowbeingconstrainedbythelimitedsupplyofgoodqualityaccommodationwithBath,ExeterandnorthBristolparticularlyaffected.
• SofaronlyBristolandCardiffhaveseenmajornewspeculativedevelopmentcomeforwardandinBristol,bothcitycentreschemeshavemetwithearlysuccess.
• Supplyoverallhasreducedacrosstheregionagain,duenotonlytostrongoccupiertake-up,butalsothelossoffurtherspaceforconversioninparticularforresidentialuseunderPermittedDevelopmentRights.
• RentalgrowthisnowevidentinanumberoflocationsacrosstheregionwithcentralBristolseeingnewrecordrentallevelsachievedduring2014.Furthergrowthislikelyin2015.
• Theoverallreductioninsupplyisalsoresultinginareductionintheleveloftenantincentivesbeingofferedinmostmarketsacrosstheregion.
Simon Price T 0117 317 1084 E [email protected]
Andrew Ridler T 0117 317 1071 E [email protected]
(172
)16
(18
8)
17.5
Swin
don
0
30
25
20
15
10
5
intown outoftown
Glouc
este
r
(124
)11
.5 (19
9)
18.5
Bath
(226
)21
Bristo
l
(30
7)
28.5
(231
)21
.5
Newpo
rt
(172
)16
(129
)12
Cardi
ff
(237
)22
(129
)12
Swan
sea
(15
6)
14.5
(116
)10
.75
Taun
ton
(18
3)
17(1
78)
16.5
Bridgw
ater
Trur
o
(118
)11
(9
1)8
.5
Exete
r
(16
7)
15.5
(18
8)
17.5
Plymou
th
(16
2)
15
Swin
don
(73
)6
.75
Glouc
este
r
(65
)6
Exete
r
(86
)8
Bath
(86
)8
Bristo
l
(83
)7.
75
Newpo
rt
(43
)4
Cardi
ff
(54
)5
Swan
sea
(45
)4
.2
Taun
ton
(75
)7
Bridgw
ater
(81)
7.5
Trur
o
(75
)7
Plymou
th
(64
)5
.95
Key
(172
)16
(15
9)
14.7
5(8
6)
8
AlderKingMarketMonitor20153
Retail & Leisure Residential Development Land
zoneAheadlinerent£psf
0
100
50
300
250
200
150
outoftownrent£psf
0
20
10
50
40
30
Swin
don
(30
1)2
8
Bath
(377
)30
Bristo
l(3
77)
30Car
diff
(323
)30
Swan
sea
(377
)35
Taun
ton
(20
5)
19
Bridgw
ater
(18
3)
17
Newpo
rt
(26
9)
25
Exete
r
Glouc
este
r
(26
9)
25
Plymou
thTr
uro
(215
)20
• 2014sawanotheryearofGDPgrowthandanincreaseinbothconsumerconfidenceandspending.Whilstthelevelofsalesonthehighstreetincreased,therewasalsoacorrespondingincreaseinonlinesales.
• Improvingsalesfiguresandconsumerconfidencecontinuedthestabilisationofrentsinprimetradinglocationsacrosstheregionand,inalimitednumberofinstances,agrowthinrenthasbeenrecorded.However,therentsinsecondarylocationscontinuetobeunderpressure.
• 2014alsosawareductioninthenumberofvoidsacrossthemajorityofhighstreetsintheregion.However,therewasamarkedpolarisationtowardsprimepitchesanditremainsquestionableastowhetherornotsecondaryandtertiarylocationswillrecover.Alternativeusesmaybethebestsolutionfortheselocations.
Thegrowthinonlinesalesislikelytoexacerbatethesituationovercomingyears.
• Asiscurrentlybeingexperiencedacrossthecountry,newdevelopmentremainslimited.The296,000sqft(27,800sqm)FriarsWalkdevelopmentinNewportisoneofonlytwocentresduetoopenin2015.
• ThefoodstoresectorisdominatedbyLidlandAldi,whichbothhaveaggressiveexpansionplansacrosstheregion.Elsewhere,themajorfoodstorescontinuetodrivetheirexpansionthroughaconvenienceformat,withtheCooperativelookingtobeparticularlyactivein2015.
• StrongdemandremainsfromA3operators,bothinandoutofcentre.Thehotelandpublichousesectorsalsoremainactive.
• Theyearalsosawalimitedbutwelcomeexpansionbyseveralwell-establishedregionalmultiples.
Development land market summary
• Inthefirsthalfof2014wewitnessedincreasedmarketconfidence,arisingvolumeofhousesalesandincreasedlandbuyingactivity.Mostoftheactivitywasfocusedongreenfieldsitesindesirablelocations.
• Wheretherewerecompetitivebiddingsituationsforconsentedresidentialsitesindesirablelocations,generallyanalysisshowedrisinglandvalues.
• Duringthethirdquarterof2014,activityandsalesvolumesweakened,priceincreasesplateauedandinsomecasesslightlyreduced.Inourjudgementthelandmarketisbeingaffectedandthischangeisbeingcausedbyseveralfactorsincluding:
• Thetighteningofmortgagefinanceundernew‘affordabilitytesting’regulations.
• Asignificantincreaseintheavailabilityofresidentialdevelopmentopportunities,asvendorsreturntothemarketfollowingabuoyantQ1andQ2.
• Somedevelopers,havingboughtaggressivelyoverthelasttwelvemonths,havenowestablishedadeliverable‘pipeline’andarebecomingmuchmoreselective.
• Anumberofdevelopersarecurrentlyat‘capacity’deliveringthesitestheyhavesecuredandmaynothavethetime.
• Residualsitevaluesaredrivenmoststronglybytwofactors:changesingrossdevelopmentvalueandbuildcosts.Whilstwehaveseenrisesinsalesvalues,wehavealsoseenasignificantinflationinbuildingcosts,coupledwithdeveloperconcernthatthemajorconstructionprojectatHinkleyPointcouldresultinafurther‘pressure’onthelabourmarketacrossanumberoftrades.
• Despiterecent‘softening’oftheresidentiallandmarketinQ3andQ4,twokeyunderlyingdemandfactorsremainstrong.Firstlythelongtermunder-supplyofhousingintheSouthWestandsecondly,theBankofEngland’srecentcommitmenttokeepthebaserateatitshistoric0.5%lowfor‘sometime’willprovidestabilityandcomforttomortgagelendersandhousebuyersalike.
• Demandforlandandpropertysuitableforstudent,retirementandcarehomeusesremainsstrong.
Charles Russell-Smith T 0117 317 1043 E [email protected]
Chris HaworthT 0117 317 1042E [email protected]
Investment
investment market summary
• 2014wasapositiveandencouragingyearfortheUKcommercialpropertymarket,withIPDtotalreturnsrisingabove20%andcapitalvaluesincreasingby11.6%.
• ConfidencewasevidentacrossallsectorsandthelevelofinvestmentvolumesforJanuarytoNovemberwas£47.7bncomparedto£42.0bnforthesameperiodof2013.Investorappetitehasbeenstrongandcompetitivebiddingsituationshaveoccurredforprimeandgoodsecondaryproperties.
• Thecommercialinvestmentmarketintheregionswasstrongthroughouttheyearwithhighdemandforprimepropertiesandgoodlevelsofdemandforsecondaryproperties.InvestmentactivityoutsideLondoncontinuestogrowasstrongdemandandstiffcompetitionleadinvestorstosearchforbettervalue.
• 2014finishedstronglyandwefullyexpectthismomentumtocarryinto2015withstrongcompetitionforthelimitedattractiveopportunitiesacrossallsectors.Riskappetitehasalreadyincreasedandissettoincreasefurtherasconcerngrowsovermissingthenextmarketcycle.
• TheSouthWestandSouthWalesregionanditsprincipalcentresareperformingwellinaUKcontext,fuellinginvestmentinterestandprovidingattractivecomparativeinvestmentreturns.Thisisfurthersupportedbyclearevidenceofastrongreturnofoccupierdemand,realrentalgrowthandlimitednewsupply.StructuralchangeinsomesectorsneedstobenavigatedwithcareandwhilsttheUKGeneralElectioninMaywillgeneratemuchdebate,itshouldnotderailthenewlevelsofconfidence.
valueofinvestmenttransactions£ms
John Benson T 0117 317 1100 E [email protected]
Bath
Bristo
l
Cardi
ff
Exete
r
Glouc
este
r
Newpo
rt
Plymou
th
Swan
sea
Swin
don
Taun
ton
Trur
o
0
600
400
500
300
200
100
97.
9
Bridgw
ater
31.3
5
26.3
7
17.0
2
13.2
5
209
190
76.5
55
7.4
71.5
52
.3
14.0
5
(1,6
15)
150
Swin
don
(1,0
76)
100
Glouc
este
r
(2,15
3)
200
Bath
(2,15
3)
200
Bristo
l
(Cab
ot C
ircus
)
(59
2)
55
Newpo
rt
(2,4
22)
225
Cardi
ff
(1,0
76)
100
Swan
sea
(430
)4
0
Bridgw
ater
(2,15
3)
200
Exete
r
(1,6
15)
150
Plymou
th
(1,18
4)
110
Trur
o
Taun
ton
(96
8)
90 (3
23)
30
(26
9)
25
4www.alderking.com
Bath
Industrial
Offices Simon Price T 0117 317 1084 E [email protected]
Andrew Ridler T 0117 317 1071 E [email protected]
1
demand
• Occupierdemandcontinueditsstrongperformanceofrecentyears.Furthertake-upisnowbeingrestrictedbythelackofavailableaccommodationinthemarket.
• Majordealsin2014includedtheacquisitionof10,000sqft(929sqm)atCambridgeHousebyMaplecroft,8,523sqft(792sqm)at29/30MonmouthStreetbyShiftActiveMediaandfurtherexpansionbyBritishMaritimeTechnologyatTheSquareonLowerBristolRoad.
• MostactivitycontinuestocomefromtheTMT,serviceandprofessionalservicessectors,withanumberofservicedofficeoperatorsalsoactivelyseekingspaceinthecity.
supply
• Totalavailabilitywithinthecitycentrereducedfurtherin2014.ThelasttworemainingGradeAsuitesattheSouthGatedevelopmentletduringthesecondhalfoftheyear,leavingnoavailablebrandnewGradeAsupply.
• Supplyhasalsobeenimpactedbythelossofanumberofexistingbuildingstoalternativeuses,mostcommonlyhotels,studentandprivateresidential.
• Asmallnumberofnewdevelopmentsarenowbeingconsidered.EdistonRealEstateandEuropaCapitalhavesubmittedaplanningapplicationfora113,000sqft(10,498sqm)speculativedevelopmentat1Pinesgate.
headline rent
• ThelackofavailablenewGradeAspecificationaccommodationhashadtheeffectofholdingbackrentalgrowthatthetopendofthemarketoverrecentyears.
• Intheshorttermthiswillcontinuetobethecaseduetothelackofsupply,butat20ManversStreet,acomprehensiverefurbishmentoftheentirepropertycomprising45,660sqft(4,242sqm)isbeingofferedatquotingrentsupto£24psf.
• Thecontinuingreductioninavailabilityhasresultedinreducedincentivelevelsbeingofferedtosecureoccupiersacrossallqualityranges.
demand
• Goodfreeholdowneroccupierdemandremains,albeitwithlimitedopportunities.
• Thelackofgoodqualitymodernspaceisholdingbacktake-up.
• Thereisincreasedinterestinthecityfromtradeandroadsideuses,asevidencedbyScrewfix’sacquisitionof6,000sqft(557sqm)atPinesWay.
supply
• Supplyisstilllimitedtosecond-handstockbutincreaseddramaticallywiththeavailabilityoftheHermanMillerbuildingwhichcomprisescirca65,000sqft(6,038sqm)andwillappealtoanumberofexistingBath-basedoccupiers.
• Nospeculativeindustrial/distributiondevelopmenthastakenplaceinBath.
• Notwithstandingtheincreaseinsupply,thereisstillanegligibleamountofgoodqualitystockandtheshortageofmodernspaceissettocontinue.
headline rent
• Headlinerentallevelshaveincreasedto£8psf(£86.09psm).
(sqm)sqftKey
Alder King Market Monitor 20155
demand000ssqft
50
0
100
125
150
2010 2011 2012 2013 2014
75
25
65(6)
92(8.5)
82(8)
90(8)
68(6)
supply000ssqft
200
0
400
500
600
2010
2011 2012 2013 2014
2011 2012 2013 2014
300
100
350(33)
360(33) 305
(28)240(22)
145(13)
headlinerent£psf
30
0
40
2010 2011 2012 2013 2014
2011 2012 2013 2014
20
10
(215
.27
)20
(19
9.13
)18
.5
(226
)21
(226
)21
(226
)21
demand000ssqft
10
0
20
25
30
15
5
headlinerent£psf
4
0
8
10
6
2
2010
(64
.58
)6
(67.
28)
6.2
5
(75
.34
)7
(81)
7.5
(86
)8
supply000ssqft
20
0
60
80
100
40
2010
50(5)
30(3)
30(3) 20
(2)
85(8)
citycentre
20(2)
20(2)
25(2.3)
7.5(0.7)
15(1.4)
2010 2011 2012 2013 2014
1. SouthGate Centre. Courtesy of SouthGate Limited Partnership.
2. ScrewFix, Pines Way Industrial Estate, Bath. Courtesy of ScrewFix.
3. The Vaults, Bath. Courtesy of Queensberry Real Estate.
Investment
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]
John Benson T 0117 317 1100 E [email protected] Stretton T 0117 317 1121 E [email protected]
2 2
zone A headline rent
• Bathcontinuestoattractmajornewretailerstoitscentralcore.In2014AnthropologieopenedinNewBondStreetandPrimarkinStallStreet.
• Conveniencestorescontinuetothrive.MorrisonshasopeneditsthirdstoreinWidcombeHillandTesco,itseighthstoreinSouthgateStreet.
out of town rent
• ThefutureoftheformerBathPresssiteremainsuncertain.Tescoiscurrentlyreassessingitsoptionsforredevelopmentofthesite.
• ThelongawaitedLidlstoreonLowerBristolRoadiscurrentlyunderconstructionandduetoopenearlyin2015.
leisure headline rent
• 2014sawtheopeningofmanynewbrandsincludingCowshedintheParagon,TurtleBayinNewBridgeStreet,GrillstockattheVaultsandCauinMilsomPlace.
• TwonewrestaurantopportunitiesarebeingmarketedonGrandParadebyBathCityCouncil.
• DeeleyFreed’splansatSawCloseareprogressing.OccupiersincludeacasinooperatedbyGroupPartoucheandZHotels.
value of investment transactions
• ThetotalvalueofinvestmenttransactionsinBathfor2014is£13.25m.Thisissignificantlylowerthanthe2013figureat£123.98m.However,the2013levelwasthehighestlevelinthelastsixyearsandaconsiderableproportionofthis(£101m)wasfromonetransaction,a50%shareintheSouthGateretailcentre.Theaveragetotaltransactionvaluefrom2010to2014is£44.5m.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6%
- Office 6%
- Retailhighstreet 4.5%
- Retailoutoftown 5.25%
investment by sector
• Lookingatthehighstreetretailsectorwhichdominatedthe2014investmentvaluetotal,23-26UnionStreetsoldtoCBREGlobalInvestorsfromSalixTrustfor£8.9m,5.20%NIY.Theunit,locatedinaprimeretaillocationonUnionStreet,islettoBananaRepublicona10yearleasefrom2010witha5yearbreakoption.11ArgyleStreet,lettoPhaseEightuntil2023,soldtoapropertycompanyfor£650,000,6.10%NIY.
• Intheindustrialsector,EuropaCapitalPartnersandStCongarLandpurchasedtheBittonPaperMillsiteinaJVfor£3.7m.Thesitetotals17acresandisnotoccupied.
3
6www.alderking.com
28%
50
100
125
150
175
75
25
zoneAheadlinerent£psf
150
0
250
300
2011 2012 2013 20142010
200
100
50
(2,6
90
.88
)25
0
(2,4
21.9
0)
225
(2,4
21.9
0)
225
(2,15
3)
200
(2,15
3)
200
outoftownrent£psf
20
0
40
60
2010 2011 2012 2013 2014
30
10
50
(430
.54
)4
0
(430
.54
)4
0
(376
.72
)35
(323
)30
(323
)30
leisureheadlinerent£psf
0
10
20
30
60
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
50
40
(139
.93
)13
(139
.93
)13
(96
.87
)9
(96
.87
)9
(96
.87
)9
(322
.91)
30
(15
0.6
9)
14
(15
1)14
(15
1)14
(118
)11
(118
)11(3
34
.45
)32
(376
.72
)35
(376
.72
)35
(376
.72
)35
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
25 22.5
37.57
123.98
13.25
5
3
7
8
6
4
investmentbysector
2010 2011 2012 2012 2014
primeyields%
industrial
office
retailhighstreet
retailoutoftown
industrial
retailhighstreet72%
Bridgwater 1
Industrial
Offices
(sqm)sqft
Andrew Maynard T 01823 444879 E [email protected]
Andrew Maynard T 01823 444879 E [email protected]
demand
• Whileimproveddemandandtransactionlevelsattheendof2013rolledoverintoQ1of2014,enquiriesfortheremainderoftheyearweretypicallyforsmallerspacesaveafewlargerandyettobesatisfiedrequirements.
• RequirementstendtofocusonproximitytotheM5atjunctions23or24andgoodqualityaccommodationwithamixtureofopenplanandcompartmentalaccommodation.
• 2014sawtheopeningofAvon&SomersetPolice’snewoperationalcentreandpolicestationonExpressPark.
supply
• TheconstructionofanewInnovationCentreatWoodlandsBusinessParkwillincreasesupplysignificantlyinMay/June2015andislikelytocapturedemandfromHinkleyPointCsupplychaincompanies,shouldthemainconstructionprojectcommenceintheyear.
• Thereislittleavailabilityofaccommodationabove5,000sqft(464.5sqm)withinthetown,duetothenatureofthemarkethistorically.
headline rent
• Rentsremainedatsimilarlevelsthroughout2014,althoughsmallersuitesattractedapremium.
• Itislikelythatrentswillimprovein2015,especiallyforgoodqualityaccommodationlocatedclosetotheM5.
demand
• Therehasbeensustainedgrowthinlevelsofdemandthroughouttheyear.
• HinkleyPointCisyettohaveadramaticeffectonlevelsoftake-up,althoughenquirylevelsstartedtoriseinthefinalquarterof2014.
• Demandispolarisedwithgooddemandforsub5,000sqft(464.5sqm)andalsoforover20,000sqft(1,858sqm).
• SignificantlettingsincludeGeoPost’sacquisitionof36,500sqft(3,391sqm)atWoodlandsBusinessPark.
supply
• Newbuildhasincreasinglybeenasolutiontotheunder-supplyofexistingpremiseswithinthetown.
• Thepaucityinsupplyisparticularlyevidentforpremisesof20,000to50,000sqft(1,858to4,645sqm),althougharguablyunder-supplyisevidentacrossallsizes,especiallyforgoodqualityspace.ThispositionwillremainandundoubtedlyworsenifandwhenlevelsofdemandfromHinkleyPointCmaterialisein2015.
headline rent
• Rentswererelativelystablethroughout2014andindeedtherewereearlysignsofrentalgrowthinQ42014.
• Withfurthernewbuildlikelyin2015,thereisthestrongprospectofheadlinelevelsincreasing.
• Rentsforsecondaryaccommodationwillalsoimprovein2015iftheimbalancebetweendemandandsupplyisexacerbatedbydemandfromHinkleyPointCsupplychaincompanies.
Key
Alder King Market Monitor 20157
2011 2012 2013 2014 2011 2012 2013 2014
outoftown
headlinerent£psf
0
10
15
20
5
2010
demand000ssqft
20
0
60
80
40
2010
supply000ssqft
20
0
40
50
60
30
10
55(5)
2010
demand000ssqft
100
0
200
250
300
150
50
239(22)
225(21)
2010
supply000ssqft
100
0
300
400
500
200
365(34)
2010
headlinerent£psf
0
8
10
12
2
4
6
2010
2011 2012 2013 2014
2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013
(81)
7.5
2014
65(6)
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towncentre outoftown
(86
)8
(15
9)
14.7
5
1. GeoPost, Woodlands Business Park, Bridgwater.
2. Bridgwater Hospital, Bridgwater.
3. CGI of the Low Carbon Energy Innovation & Collaboration Centre, Woodlands Business Park.2 3
Investment
Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]
John Benson T 0117 317 1100 E [email protected] Maynard T 01823 444879 E [email protected]
zone A headline rent
• Afterasuccessfulfirsthalfoftheyear,demanddippedinthe3rdand4thquartersandthevacancyraterosetoalmost15%bytheendof2014.
• TheLocalAuthorityhascommencedworktoimprovetheEastoverareaaspartofitslongtermvisionforthetowncentre.
• LargerformatunitshavebeenmorepopularandtheformerArgosstoreinBinfordPlacehasfinallybeenletfollowingclosurebackin2009.
• ZoneArentshavechangedlittleintheprimeandsecondaryareas.
out of town rent
• Thereisactivedemandfromanumberofdiscountchainstogetherwithsomeconvenienceformatsupermarkets.
• Therewaslittleactivityduring2014afterseveralnewstoreopeningsin2013.
leisure headline rent
• DueprimarilytotheprospectofHinkleyPointC,thereisincreasinginterestinthetownfromhoteloperators.Constructionofan80bedroom4starhotelonEastover,whichreceiveda£4.5mcashboostfromtheGrowingPlacesFund,isduetocommenceimminently.
• A3/A4demandwillincreaseinthetownduring2015/16asmorelandisbroughtonlineandthetown’spopulationgrows.
value of investment transactions
• Thevalueofinvestmenttransactionsin2014was£31.35m,withthemajoritybeingintheretailwarehousesector.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.75%
- Office 7%
- Retailhighstreet 6.5%
- Retailoutoftown 6%
investment by sector
• ThelargestdealintheoutoftownretailsectorwasLIM’spurchaseofBridgwaterRetailParkinMay2014fromCornerstoneRealEstate.The112,600sqft(10,461sqm)parkismulti-lettoNext,Wickes,Argos,PetsatHomeandLidl.Itsoldfor£26.13m,5.90%NIY.
• MetricIncomePluspurchasedTheRange,BristolRoadfor£3.67m,6.8%NIY.The33,715sqft(3,132sqm)newunitislettoTheRangefor20yearsfromFebruary2013.
• Intheofficesector,KingcastleLimitedpurchasedRoyalClarenceHouse,HighStreet,amulti-letofficetotalling14,350sqft(1,333sqm)for£1.55m,£108capitalvaluepsf.
8www.alderking.com
zoneAheadlinerent£psf
30
0
50
60
2010 2011 2012 2013 2014
40
20
10
(430
)4
0
outoftownrent£psf
10
0
20
30
2010 2011 2012 2013 2014
15
5
25
(18
3)
17
leisureheadlinerent£psf
0
5
10
15
20
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
(129
)12
(86
)8
(16
1)15
valueofinvestmenttransactions£ms
20
0
40
50
2010 2011 2012 2013 2014
30
10
31.35
investmentbysectorprimeyields%
6
4
8
9
7
5
2010 2011 2012 2013 2014
industrial
office
retailhighstreet
retailoutoftown
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
Not
pre
viou
sly
repo
rted
office
retailoutoftown
5%
95%
Bristol 1
Industrial
Offices
(sqm)sqft
Simon Price T 0117 317 1084 E [email protected]
Andrew Ridler T 0117 317 1071 E [email protected]
demand
• Occupierdemandgatheredmomentumduringtheyearwiththeendofyeartotalthehighestlevelsince2007.Bothcitycentreandoutoftownmarketsperformedsignificantlyaheadofthefiveyearaverage.
• Notabledealsin2014includedtheacquisitionof28,276sqft(2,627sqm)byPwCat2GlassWharf,KPMG’sacquisitionof52,000sqft(4,831sqm)at66QueenSquareandinNorthBristol,TSB’sacquisitionof63,858sqft(5,933sqm)atKeyPoint,Almondsbury.
• ThemostactivesectorscontinuetobefinancialandprofessionalservicesandtheenergyandTMTsectors.
supply
• Inthecitycentre,lessthan200,000sqft(18,580sqm)ofnewGradeAspaceisimmediatelyavailable,withlessthan10,000sqft(929sqm)availableinNorthBristol.
• TwonewspeculativeGradeAdevelopments-SalmonHarvester/NFUM’s2GlassWharfandSkanska’s66QueenSquare-willcompleteinJanuaryandJune2015andhavealreadysecuredlettings.
• TherehasbeenasharpreductionintheavailabilityofGradeBspace.Approximately1msqft(92,902sqm)ofcitycentrespacehasbeenidentifiedforconversiontoresidentialviaPermittedDevelopmentRights.
headline rent
• ThelettinginOctober2014duringconstructionat2GlassWharftoPwCsetanewrecordrentinBristolforGradeAaccommodation.Thiswasfollowedbythepre-letinDecember2014toKPMG.
• Theincreasedleveloftake-upofGradeBspacehasresultedinrentalgrowthinanumberofsizerangesduringtheyear,asaresultofreducingsupply.
• Thelevelofproposedconversion,asaresultofPermittedDevelopmentRights,hassignificantlyreducedsupplyatthebudgetendofthemarket,whererentalgrowthisalsonowevident.
demand
• Therehasbeenareturnofmid-rangerequirementsinthe15,000–75,000sqft(1,394–6,968sqm)sizerangewithlimitedavailabilitytriggeringdesignbuildactivity.
• SignificantdealsincludeTheRange’sleaseholdacquisitionofthe385,000sqft(35,768sqm)formerMorrisonsRDCatCribbsCausewayandFarmFoods’newbuildacquisitionof175,000sqft(16,258sqm)atCentralPark,Avonmouth.
• Thereisincreaseddemandfromowneroccupiersforfreeholdspacewithlimitedopportunities.
supply
• Thereisanegligibleamountofgoodqualitystockandshortagesofmodernspaceareimpactingontake-up.
• Thecity’sfirstspeculativeindustrial/distributiondevelopmentcomprisingfiveunitstotalling15,000sqft(1,394sqm)isclosetocompletionatCaxtonBusinessParkwithfourbuildingspre-sold.
• Thecitycouldsupportfurtherspeculativedevelopment,particularlyprovidingbuildingsinthe1,000-3,000sqft(93-279sqm)and25-100,000sqft(2,322–9,290sqm)sizeranges.
headline rent
• Thereisnonewspaceimmediatelyavailableandweanticipatethatrentalsofcirca£7.75-£8psf(£83.40-£86psm)couldbeachievedforaccommodationbelow10,000sqft(929sqm).
• Rentsformodernandmid-rangebuildingsremainat£6.50psf(£70psm).Goodqualitysecond-handbuildingsarecommandingrentsofaround£4.75-£5.75psf(£51.11-£61.88psm).
• Withthereducedlevelsofgoodqualityavailablestock,rentalincentivesforprimespacehavereducedwithleasedurationsextending.
Key
Alder King Market Monitor 20159
2010 2011 2012 2013 2014
demand000ssqft
400
0
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013 2014
600
200
860(80) 700
(65)658(61)
735(68)
1,250(116)
supply000ssqft
1,000
0
2,000
2,500
3,000
3,500
4,000
1,500
500
2,650(246)
2,550(237) 2,380
(221)2,350(218)
1,650(153)
headlinerent£psf
15
0
25
30
2010 2011 2012 2013 2014
20
5
10
(29
6)
27.5
(29
6)
27.5
(29
6)
27.5
(29
6)
27.5
(30
7)
28.5
(226
.03
)21
(226
.03
)21
(231
)21
.5
(231
)21
.5
(231
)21
.5
citycentre outoftown
demand000ssqft
1,000
0
2,000
2,500
3,000
3,500
2010 2011 2012 2013 2014
1,500
500
2,400(223)
2,400(223)
2,600(242)2,325
(216)2,200(204)
supply000ssqft
2,000
0
3,000
4,000
5,000
7,000
2010 2011 2012 2013 2014
1,000
6,000
headlinerent£psf
3
0
5
8
2010 2011 2012 2013 2014
4
2
1
6
7
(80
.73
)7.
5
(80
.73
)7.
5
(80
.73
)7.
5
(81)
7.5
(83
)7.
75
4,500(418)
4,500(418)
3,750(348)
2,750(255)
1,750(163)
1. 66 Queen Square, Bristol. Courtesy of Skanska UK.
2. 2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.
3. Caxton Business Park, Warmley. Courtesy of Axten and Blue Marble Properties.3
Investment
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]
John Benson T 0117 317 1100 E [email protected] Stretton T 0117 317 1121 E [email protected]
zone A headline rent
• Throughouttheyear,voidshavecontinuedtoreduceinboththecitycentreandTheMallatCribbsCauseway.
• NewopeningsincludePullandBearandLloydsBankatCabotCircus,Sainsbury’sLocal,BakersDolphin,EccoandPoundlandinBroadmeadandJoules,Superdry,JackWills,LakelandandBoseatTheMall.
• THATGroupandAcornareprogressingplansforanewmixedusedevelopmentinCliftonVillagetoincludeshops,restaurantsandapartments.
out of town rent
• Sainsbury’shasopenedanewfoodstoreinPortishead.
• WaitrosenowtradetheformerCo-opsiteinBroadmeadLane,Keynsham.
• Discounteractivityremainsstrong.AldihasopenedinLongwellGreenandLidlhasannouncedproposalsforanewstoreinHorfield.
leisure headline rent
• NewrestaurantopeningsincludeWagamamasandFiveGuysinCabotCircus,CauandByrononQueensRoadandRosemarinosinthecitycentre.
• TheredevelopmentofAshtonGatehasstartedwiththedemolitionoftheWedlockStand.Dueforcompletionin2017,thestadiumwillprovide27,000seats,conferencefacilitiesandanhotel.
• BristolCityCouncilisprogressingplansforanew12,000seatArenaclosetoTempleMeadsstation.SMGandLiveNationhavebeennamedaspreferredoperators.TheArenaisduetoopenin2017.
value of investment transactions
• ThetotalvalueofinvestmenttransactionsinBristolin2014was£557.4m.Thisisanincreaseofcirca75%onthe2013totalof£319m.TheBristolfiveyearinvestmentvalueaverageis£374m.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 5.75%
- Office 5.75%
- Retailhighstreet 4.5%
- Retailoutoftown 5%
investment by sector
• 54%ofthetotalvalueofinvestmenttransactionsinBristolismadeupbythesaleofa50%stakeinCabotCircus.Thisstakeinthe1.3msqft(120,774sqm)centralBristolshoppingcentresoldfor£267.8m,6.30%NIYtoAviva.
• ThelargestofficedealwasTheParagon,VictoriaStreetpurchasedbyLothburyfor£29.5m,5.93%NIY.This75,000sqft(6,968sqm)officeismulti-lettotenantsincludingEYandMercer.
• ThemostsignificantdealintheretailwarehousesectorwasthepurchaseofCentaurusRetailParkbyNFUMutual.This81,000sqft(7,525sqm)multi-letretailwarehouseparksoldfor£47.1m,5.53%NIY.
2
10www.alderking.com
200
400
500
600
700
300
100
8%
24%
54%
14%
zoneAheadlinerent£psf
0
50
150
250
350
2010 2011 2012 2013 2014
Broadmead TheMall CabotCircus
100
200
300
(1,9
91.2
5)
185
(1,8
83.
70)
180
(1,8
83.
70)
175
(1,8
84
)17
4
(1,8
30)
170
(3,3
36.6
9)
310
(2,15
2.7
0)
200
(3,2
29.2
0)
300
(3,2
29.2
0)
300
(3,2
29)
300
(3,2
29)
300
outoftownrent£psf
20
0
40
50
2010 2011 2012 2013 2014
30
10
(430
.54
)4
0
(376
.72
)35
(323
)30
(323
)30
(48
4.3
6)
45
leisureheadlinerent£psf
0
10
20
30
50
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
40
(16
1.45
)15
(139
.93
)13
(322
.91)
30
(16
1.45
)15
(139
.93
)13
(322
.91)
30
(16
1.45
)15
(16
1)15
(16
1)15
(129
.16)
12
(129
)12
(129
)12
(322
.91)
30
(323
)30
(323
)30
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
349
49
2
155
.19
319
55
7.4
primeyields%
5
3
7
8
2012 2013 20142011
6
4
2010
investmentbysector
industrial
office
retailoutoftown
other industrial
office
retailhighstreet
retailoutoftown
(2,15
2.7
0)
200
(2,15
3)
200
(2,15
2.7
0)
200
(2,15
2.7
0)
200
Cardiff 1
Industrial
Offices Owen Young T 029 2038 1996 E [email protected]
Owen Young T 029 2038 1996 E [email protected]
demand
• Take-uphasremainedhealthyandconstantthroughouteachquarterandhasresultedina24%increaseonthefiveyearaverageof427,000sqft(39,669sqm).
• Outoftownandbusinessparkdemandimprovedin2014.
• Dealsbelow5,000sqft(465sqm)accountedfor30%oftake-up,amarkedcomparisonto80%in2013.
• NotabledealsincludedInternationalBaccalaureateOrganisationtaking48,500sqft(4,506sqm)andSSEtaking46,851(4,353sqm)atCardiffGateBusinessPark.
supply
• Supplyhasremainedconstant,againcomprisingmainlysecondarystock.GradeAstockisextremelylow,withlessthan30,000sqft(2,788sqm)availableinthecitycentre.
• Thetake-upofspacebystudentofficeconversionsislikelytocounteracttheAdmiralInsurancerelocation,fromvariouscitycentrelocations,intoitsnew220,000sqft(20,439sqm)building.
• Over300,000sqft(27,871sqm)isforecastforconstructionoverthenext15monthswithinCardiff’s‘FinancialServices’CityEnterpriseZonewhereJRSmart’s80,000sqft(7,432sqm)CapitalQuarter2iscurrentlyunderconstruction.
headline rent
• HeadlinerentismaintainedinthecitycentrebutisexpectedtogrowtofacilitatenewGradeAofficedevelopment,particularlyatRightacresCentralSquarewhereBlakeMorganhaspre-let28,077sqft(2,608sqm).
• Over200,000sqft(18,581sqm)oflettingsinoutoftownlocations(excludingCardiffBay)haveresultedinoutoftownheadlinerentsremainingconstant.
• IncentivescontinuetotightenbutweexpectsubstantialrentfreeperiodswillbeofferedonnewGradeAdevelopmentstoencouragerentalgrowth.
demand
• DemandincreasedslightlyfromlastyearandincludesPinewoodStudio’smovetothe177,000sqft(16,444sqm)buildingformerlyoccupiedbyG24i.
• Theyearshowednoslowdowninthemarketfordealsbelow10,000sqft(929sqm)withtransactionsofthissizeaccountingfor80%ofalldemand.
• CapitalBusinessParkaswellasthesouthernpartofCardiff,willbeenhancedwiththeconstructionoftheEasternBayLinkRoadcommencingin2015.
supply
• Supplyhasreacheditslowestlevelinsixyearsinlinewithincreaseddemand.
• Manytransactionshavebeenfreeholdcontributingtolevelsofsupplyinthissectordecreasingforthesixthsuccessiveyear.
• Supplylevelsareexpectedtodeclinefurtherasaresultofcontinuedlimitedspeculativedevelopmentandthereducinglevelsofqualitystockcomingtothemarket.
headline rent
• Headlinerentshaveremainedunchangedat£5psf(£53.82psm).
• Incentivesarestillverymuchinplaceforsecondarystockwhileprimespaceincentivesarehardeningandleasedurationslengthening.
(sqm)sqftKey
Alder King Market Monitor 201511
demand000ssqft
0
200
300
400
500
600
700
2010 2011 2012 2013 2014
100
437(41)
639(59)
380(35)
300(28)
531(49)
supply000ssqft
400
0
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013 2014
600
200
1,200(111)
1,200(111) 1,100
(102) 1,000(93)
1,000(93)
headlinerent£psf
0
5
10
15
20
25
2010 2011 2012 2013 2014
citycentre outoftown
(226
.03
)21
(215
.27
)20
(236
.81)
22
(237
)22
(237
)22
(15
0.6
9)
14
(139
.93
)13
(139
.93
)13
(129
)12
(129
)12
demand000ssqft
0
400
600
800
1,000
2010 2011 2012 2013 2014
200
516(48)
518(48)
572(53)
763(71)631
(59)
supply000ssqft
0
500
1,000
1,500
2,000
2010 2011 2012 2013 2014
1,894(176)
1,467(136) 1,368
(127)1,094(102)
1,986(184)
headlinerent£psf
0
2
3
4
5
6
7
2010 2011 2012 2013 2014
1
5.5(59.20) 5
(53.82)5
(53.82)5
(54)5
(54)
1. Central Square, Cardiff Masterplan. Courtesy of Rightacres Property Co Ltd.
2. Caradog House, Cardiff.
3. Castle Arcade, Cardiff.2 3
Investment
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
John Benson T 0117 317 1100 E [email protected] James Nicholas T 029 2038 1994 E [email protected]
zone A headline rent
• HeadlinerentshavereducedslightlybutshouldremainstablewithcontinuedlettingsinStDavid’sIItoBlott,TigerStores,Mac,OtherUKandCastleFineArt.
• QueenStreetremainspopularwithanewPrimarkstoreattheformerBHSandanewMatalanintheformerPrimark.
out of town rent
• Activityremainsquietandisstilldominatedbydemandforconveniencestores.
• ThereareplansfortheformerCometonNewportRoadtobecomeadiscountfoodstore.
leisure headline rent
• TherehasbeenahighlevelofactivityintherestaurantandA3sectorwithmultiplelettingstogoodcovenantsacrossthecity,mostnotablyinTheHayesarea.NewoccupiersincludeWahaca,Burger&LobsterwhicharebothadjacenttothenewMiller&Carterrestaurant.RickSteinalsohasarequirementinCardiff.
• MoorfieldGroup(Moorfield)andPlusShopsRetailhaveagreedtotakea25yearleasefromPremiereCinemastore-openthefive-screencinemaatCardiff’sCapitolShoppingCentre.The£1mrefurbishmentiswellunderway.
value of investment transactions
• ThetotalvolumeofinvestmenttransactionsinCardiffincreasedby59%onthe2013figures,risingfrom£131.33mto£209m.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.5%
- Office 6.25%
- Retailhighstreet 4.75%
- Retailoutoftown 5%
investment by sector
• Themulti-letCapitalShoppingParkwaspurchasedbyReAssureLtdfor£59.6m,5.20%NIY.
• Inthehighstreetretailsector,10TheHayeswaspurchasedbyHendersonUKPUTfor£14.8m,5.75%.TheunitislettoTXMaxxforafurther7years.
• ThelargesttransactionintheofficesectorwasthesaleofCricklewoodHousefor£40.5m,5.36%NIY.Thiscirca100,000sqft(929sqm)officebuildingislettotheNationalAssemblyofWales.
• TheCastleQuarterPortfolio,acollectionoflistedVictorianretailarcadeswithassociatedoffice,residentialandleisureusestotalling125,000sqft,waspurchasedbyMansfordRealEstatefor£21.375m,7.65%NIY.
12www.alderking.com
2%
34%
60
120
150
180
210
90
30
zoneAheadlinerent£psf
0
100
150
200
250
300
2010 2011 2012 2013 2014
50
outoftownrent£psf
25
0
35
40
2010 2011 2012 2013 2014
30
20
15
10
5
(322
.91)
30
(322
.91)
30
(322
.91)
30
(323
)30
(323
)30
leisureheadlinerent£psf
0
10
20
50
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
30
40
(139
.93
)13
(139
.93
)13
(139
.93
)13
(14
0)
13
(14
0)
13
(10
7.6
4)
12
(10
7.6
4)
12
(322
.91)
30
(322
.91)
30
(322
.91)
30
(118
)11
(118
)11
(431
)4
0
(431
)4
0
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
129.6
204.36
78.43
131.33
209
primeyields%
5
3
7
8
2012 2013 2014
6
4
20112010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
18%
9%
37%
(2,
475
)23
0
(2,
422
)22
5
(2,
422
)22
5
(2,
422
)22
5
(2,
69
0.8
8)
250
industrial
office
retailhighstreet
retailoutoftown
other
(118
.40
)11
Exeter
Industrial
Offices
(sqm)sqft
Noel Stevens T 01392 353093 E [email protected] Collison T 01392 353091 E [email protected]
Noel Stevens T 01392 353093 E [email protected] Collison T 01392 353091 E [email protected]
1
demand
• Thereisstrongdemandforsmallersuitesinthecitycentrewithclientsbreakingupfloorplatestosatisfydemand,AtriumandTheSenatebeingprimeexamples.
• Thereisatrendtowardsowneroccupiersseeking5,000sqft(465sqm)stand-alonefreeholds.
• Demandisnotbeingmetbystandingstockandhighprofileoccupiersarestrugglingtofindsuitablespace.
supply
• Thereiscontinuedpressureonsecondarystockforredevelopmentforalternativeusessuchasstudenthousingorresidential.
• Therehasbeennonewbuildduringthedownturn,severelylimitingGradeAavailability.
• Wepredictacontinuedlackofsupplyofmodernpremisesforthenextthreeyearswhilstthedevelopmentpipelinecatchesup.
headline rent
• ThelettingtoBlurGroupat£17.50psf(£188psm)in2013hasyettobebeaten.
• Newbuildofficesarenowbeingpricedat£18psf(£194psm)leaseholdand£235psf(£2,530psm)freehold.Weexpectthesepricestorisetokeeppacewithconstructioncostinflation.
• Valuesforsecondarystockarealsorisingduetothelackofsupplyandcomparativecostofnewbuild.
demand
• TheindustrialsectoristhestrongestinExeterwithgooddemandparticularlyfrominternetfulfilmentcompanies.
• Occupiersarefocussingontransportlinksandbroadbandcapacitywhenselectingpremises.
• WecontinuetoseestrongdemandforcarshowroomsatMatfordGreenBusinessParkwithToyota/Lexusbuyingtwoacrestorelocatefromtheirexistingpremises.
supply
• Supplyhasseenaconsiderabledecreasetoits2009level.Limiteddevelopmentsince2007meansoccupiersareforcedtotakeolderbuildings.
• Constructionof40,000sqft(3,716sqm)ofnewspacewillbeginatHillBartonin2015wherepre–letsareagreed.
• Theavailabilityofexistingbuildingsabove10,000sqft(929sqm)isextremelylimitedwithdemandunsatisfied.
headline rent
• £8psf(£86psm)hasbeenachievedfornewbuildpremisesinExeterbut£7.50psfislikelytoremainastheheadlinerentforinstitutionalspecificationpremises.
• Landvaluescontinuetorisewith£460,000peracrebeingpaidinSowtonandlandatMatfordGreenbeingofferedat£600,000plusperacre.
Key
Alder King Market Monitor 201513
demand000ssqft
50
0
100
125
150
175
200
2010 2011 2012 2013 2014
75
25
150(14)
150(14)
140(13)
100(9)
135(12)
supply000ssqft
100
0
200
250
300
400
450
2010 2011 2012 2013 2014
150
50
350
215(20)
310(28.8)
350(33)
410(38)
325(30)
headlinerent£psf
6
0
10
12
14
16
18
2010 2011 2012 2013 2014
8
2
4
citycentre outoftown
(177
.60
)16
.5
(177
.60
)16
.5
(177
.60
)16
.5
(178
)16
.5
(16
7)
15.5
(177
.60
)16
.5
(177
.60
)16
.5
(177
.60
)16
.5
(18
8)
17.5
(18
8)
17.5
demand000ssqft
200
0
400
500
600
700
800
2010 2011 2012 2013 2014
300
100
200(19)
310(29)
600(56)
310(29)
330(31)
supply000ssqft
200
0
400
500
2010 2011 2012 2013 2014
300
100
390(36)
305(28)
300(28)
300(28) 250
(23)
headlinerent£psf
3
0
5
8
2010 2011 2012 2013 2014
4
2
1
6
7
(67.
27)
6.2
5
(64
.58
)6
(64
.58
)6
(75
.34
)7 (8
6)
8
Investment
Retail & Leisure Lee Southan T 01392 353090 E [email protected]
John Benson T 0117 317 1100 E [email protected] Scott Rossiter T 01392 353089 E [email protected]
3
1. Sandy Park, Exeter
2. CGI of Alphington Retail Park, Exeter
3. The Senate, Exeter2
zone A headline rent
• DemandfromcelebritychefscontinuestoboostExeter’sprofile.JamieOliverhasconfirmeditwillopenaJamie’sItalianinPrincesshay.
• ThePrincesshaydevelopmentremainsstrongwithlimitedavailability.Theplannedmixedusedevelopmentoftheneighbouringbusstationsitewillboostfootfalltothecitycentre.
out of town rent
• ThefinallettingtoDreamscompletesthelineupatAlphingtonRetailParkwhichstrengthenstheappealofAlphingtonasanoutoftownretaildestination.
• Secondaryretaillocationshaveperformedverywellinsomecases.TheStThomasCentresawarecordrentagreedof£55.00psf(£592psm)althoughthisisn’trepresentativeofthewidermarket.Therehasbeenunprecedenteddemandfrombookmakersandtakeawaysinlocationswithgoodparking.
• TheIKEAeffecthasyettobefeltasconstructionhasnotyetbegunbutalargeincreaseinvisitornumbersisexpected.
leisure headline rent
• WorkhasstartedattheIntercountysitewithFrankie&Benny’s,ChiquitoandKFCconfirmedatheadlinerentsof£38psf(£409psm).
• TheStAustellBrewery’sredevelopmentofformerbondedwarehousinghasfurtherenhancedExeter’sQuayside.
• ThecontinuedexpansionandadditionofconferencefacilitiesatExeterChiefs’homegroundatSandyParkarewelcomeimprovements.
value of investment transactions
• Thetotalvolumeofinvestmentactivityin2014was£190m,comparedtojustover£50min2014.
• Theaveragevalueoverthepastfiveyearsis£85.7m.
• 33%ofthetotalismadeupbyonetransaction,the50%saleofthePrincesshayShoppingCentrefor£127.9m,5.6%NIY.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.25%
- Office 6.25%
- Retailhighstreet 4.5%
- Retailoutoftown 5.25%
investment by sector
• ThelargesttransactionoftheyearwasHenderson’spurchaseofa50%stakeofthePrincesshayShoppingCentrefor£127.9m.
• Intheretailwarehousesector,AberdeenAssetManagementpurchasedacirca30,000sqft(2,787sqm)assetonSowtonRetailPark,lettoDunelmandFurnitureVillageforanaverageunexpiredtermof11.25years.Thepurchasepricewas£6.88m,6.25%NIY
• Intheofficesector,ClarendonHouse,WesternWaywaspurchasedfor£3.7m,7.60%NIY.TheofficeislettotheMinistryofPublicBuildingswith19yearsunexpired.
14www.alderking.com
100
150
200
250
50
leisureheadlinerent£psf
0
10
20
30
50
2010 2011 2012 2013 2014
40
(18
2.9
9)
17
(18
3)
17
(18
3)
17
(86
.11)
8
(86
)8
(10
8)
10
(18
2.9
9)
17
(430
.54
)4
0
(431
)4
0
(431
)4
0
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
63.3640.42
52.85
190
82.03
primeyields%
5
3
7
8
2012 2013 2014
6
4
20112010
outoftownrent£psf
10
0
20
30
2010 2011 2012 2013 2014
15
5
25
(26
9.0
9)
25
(26
9.0
9)
25
(24
7.5
6)
23
(30
1)2
8
(323
)30
zoneAheadlinerent£psf
150
0
250
2010 2011 2012 2013 2014
200
100
50
(2,15
2.7
0)
200
(2,15
2.7
0)
200
(2,15
2.7
0)
200
(2,15
3)
200
(2,15
3)
200
HighSt.
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
cinema health&fitness A3/A4
(118
.40
)12
(86
.11)
8
(29
6)
27.5
(118
.40
)11
(86
.11)
8
office
retailhighstreet
retailoutoftown
other
5%4%
3%
88%
Gloucester 1
Industrial
Offices
(sqm)sqft
Adrian Rowley T 01452 627133 E [email protected]
Adrian Rowley T 01452 627133 E [email protected]
demand
• Take-upduringtheyeartotalled150,000sqft(13,935sqm),up25%onthepreviousyear’sdemand.
• Thelargestandmostsignificanttransactioncomprisedthepre-letof1420GloucesterBusinessParktoHorizonNuclearPowerServiceswhichwillprovide52,000sqft(4,831sqm)withthecapabilitytoexpandto67,000sqft(6,225sqm).
• Demandremainsfocusedonwell-locatedGradeAspace.
supply
• Supplyremainsatexceptionallylowlevels.
• Thisshortageofsupplyispresentinbothprimeandsecondarysectors.
• Thereisnowadistinctabsenceofspaceover5,000sqft(464sqm)andoflargersinglefloorplateoptions.
headline rent
• Theheadlinerentforoutoftownspacehasincreasedto£18.50psf(£199.14psm).
• Theheadlinerentfortowncentrespacehasremainedconstantat£11.50psf(£123.79psm).
demand
• Take-upduring2014totalled400,000sqft(37,160sqm).
• Thefigurerepresentsasubstantialincreaseoverrecentyearsandequalsthefiveyearhigh.
• Significanttransactionsincludethepre-saleofa35,000sqft(3,252sqm)manufacturingbuildingatQuedgeleyWesttoVisionProfilesandatotalof164,000sqft(15,236sqm)intwolettingsatBarnwoodPoint.
supply
• Supplyhasdroppedto250,000sqft(23,225sqm).
• Thisisthelowestlevelexperiencedoverthelastfiveyearsandcomprisespredominantlysecondarystock.
• TwonewspeculativeGradeAbuildingshavebeencompletedcomprisingabuildingof28,000sqft(2,601sqm)atQuedgeleyWestandabuildingof22,000sqft(2,044sqm)atWaterwellsBusinessPark.
headline rent
• Theheadlinerenthasremainedconstantat£6psf(£64.59psm).
• Therecontinuestobeanupwardpressureonrentsduetotheshortageofstockandthepredictedincreaseindesignandbuilddevelopmentactivity.
Key
Alder King Market Monitor 201515
demand000ssqft
50
0
100
125
150
175
200
225
2011 2012 2013 20142010
75
25
200(19)
100(9)
95(9)
120(11)
150(14)
supply000ssqft
100
0
200
250
300
350
400
2010 2011 2012 2013 2014
150
50
150(14)
250(23)
200(19)
120(11)
150(14)
headlinerent£psf
10
0
20
25
30
2010 2011 2012 2013 2014
15
5
(123
.78
)11
.5
(123
.78
)11
.5
(123
.78
)11
.5
(123
.78
)11
.5
(123
.78
)11
.5
(18
8.3
6)
17.5
(18
8.3
6)
17.5
(18
8.3
6)
17.5
(18
8.3
6)
17.5
(19
9)
18.5
citycentre outoftown
demand000ssqft
200
0
400
500
600
700
2010 2011 2012 2013 2014
300
100
400(37)
400(37)
300(28) 275
(26)
300(28)
headlinerent£psf
2
0
4
5
6
7
2010 2011 2012 2013 2014
3
1
(64
.58
)6
(64
.58
)6
(64
.58
)6
(65
)6
(65
)6
supply000ssqft
400
0
800
1,000
1,200
2010 2011 2012 2013 2014
600
200
450(42) 350
(33) 275(26)
625(30)
250(23)
1. Porsche dealership, Tewkesbury.
2. Tewkesbury Trade Park.
3. Gloucester Quays. Courtesy of Peel.32
Retail & Leisure John Hawkins T 01452 627135 E [email protected]
Investment John Benson T 0117 317 1100 E [email protected] Adrian Rowley T 01452 627133 E [email protected]
zone A headline rent
• TheopeningofTKMaxxwithinthecoveredEastgateStreetremainsimminentandwillprovideawelcomeboosttothecitycentre.
• TheStanhoperedevelopmentofKingsSquareandthebusstationcontinuestotakeshape,andwillhaveasignificantimpactinrejuvenatingthecitycentreeconomy.
• Demandgenerallyacrossthefourkeygatestreetsofthecitycentre-Eastgate,Westgate,NorthgateandSouthgate-isimprovingwiththenumberofemptyunitsdeclining.
out of town rent
• ThenewMorrisonsstoreandpetrolfillingstationhasfuelledfurtherdemandwithintheoutoftownmarketandaCostaCoffeedrive-thruwillbethefirsttotakeoccupationalongsideMorrisons.
• AnewMcDonaldsrestaurantanddrive-thruhasrecentlyopenedatStOswaldsPark.WrenKitchenswasthelatestretailertoenterthePark,takinghalfoftheformerCometunit.
• AtWhittleSquare,GloucesterBusinessParkthereisjustoneremainingunitof1,000sqft(93sqm),followingthearrivalofAndrewsEstateAgentsandBarnardoswhotookoccupationofadoubleunit.
leisure headline rent
• TheGloucesterQuayshasexperiencedasignificantupliftindemandandcustomerfootfall,mainlyasaresultoftheopeningoftheCineworld10screencinemawhichhasgiventheDockstheabilitytodrawinmanymorecustomersateveningsandweekends.
• ThenewcinemahasprovidedthecatalystforthearrivalofnewrestaurantsincludingChimichanga,Zizzi’sandEd’sEasyDiner,whichhavefurtherenhancedthenight-timeeconomyofthecitycentre.
• Withinthehealthandfitnesssector,thebudgetgymoperatorsremainactiveandarekeentoacquirealimitedsupplyofsuitableproperties.
value of investment transactions
• ThevolumeofinvestmentsalesinGloucesterandCheltenhamincreasedsignificantlyto£97.9min2014.
• Themajorityoftransactionswerecarriedoutintheretailsector.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.25%
- Office 6.5%
- Retailhighstreet 6.5%
- Retailoutoftown 5.75%
investment by sector
• ThelargestinvestmenttransactionwasCordeaSavills’purchaseofChurchStreet,BishopsCleeve,Cheltenhamfor£24m,4.25%NIY.ThepropertyislettoTesco.
• Intheofficesector,AvivapurchasedTheQuadranglefor£8.13m,7.64%NIY.TheQuadrangleisamixedusepropertywithretailandrestaurantsonthegroundfloorandofficeson1stto4thfloors.
• TherewereafewdealsintheretailwarehousesectorincludingEasternAvenue,GloucesterwhichsoldtoNewRiverRetailfor£4.25m,8.30%NIY.TenantsareMagnetandPCWorldwithanunexpiredleasetermofcirca8years.
16www.alderking.com
zoneAheadlinerent£psf
75
0
125
150
175
2011 2012 2013 20142010
100
25
50
15
25
30
35
20
5
10
EastgateSt. KingsWalk
(1,2
91.6
2)
120
(1,2
91.6
2)
120
(1,0
76.4
0)
100
(1,0
76.4
0)
100
(1,0
76)
100
(1,0
76)
100
(1,0
76.4
0)
100
(1,0
76.4
0)
100
(1,0
76)
100
(1,0
76)
100
outoftownrent£psf
10
0
20
25
2010 2011 2012 2013 2014
15
5
(26
9.0
9)
25
(26
9.0
9)
25
(26
9)
25
(26
9)
25
(236
.80
)22
leisureheadlinerent£psf
0
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
(129
.16)
12
(129
.16)
12
(129
.16)
12
(129
)12
(129
)12
(16
1.45
)15
(34
4.4
5)
32
(34
4.4
5)
32
(34
4)
32
(34
4)
32
valueofinvestmenttransactions£ms
30
0
60
75
90
105
2010 2011 2012 2013 2014
45
15
57.2
62.98
40.29 41.6
97.9
primeyields%
5
3
7
8
2012 2013 2014
6
4
20112010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
industrial
office
retailhighstreet
retailoutoftown
other
(10
7.6
4)
10
(96
.88
)9
(96
.88
)9
(97
)9
(97
)9
7%
15%14%
41%
23%
Newport
Industrial
Offices Owen Young T 029 2038 1996 E [email protected]
Owen Young T 029 2038 1996 E [email protected]
1
demand
• Take-upfor2014was47%greaterthan2013and17%abovethefiveyearaverage.
• Therehasbeenanoticeableshiftindemandtowardsbusinessparklocations.
• 46%oftransactionswerelessthan5,000sqft(465sqm).
• NotabletransactionsincludeWelshWatertaking35,000sqftat(3,252sqm)at28West,CelticSpringsandAquisInsuranceManagementtaking14,000sqft1,301sqm)atIntegraHouse.Bothwerefreeholdpurchases.
supply
• Supplyhasremainedconstantduetoalackofnewdevelopmentandthebetterqualitynewlyavailablestockbeingtakenuprelativelyquickly.
• CrownBuildings,ClarenceHouse,MillStreetandChartistToweraccountfor48%ofavailablestock.
• ThereisarealshortageofGradeAstock.
headline rent
• HeadlinerentsremainconstantduetoalackofGradeAstockandlimitednewdevelopment.
• Incentivesarehardeningandwillcontinuetodosothroughout2015,especiallyonthebetterqualitystock.
demand
• Take-updecreasedsignificantlyfrom2013,reachingitslowestlevelinsixyears,withanumberofoccupiersunabletosatisfytheirrequirements.
• 84%ofdealswerelessthan10,000sqft(929sqm)astheinfluenceofSME’scontinuestogrow.
• Conversely,therehasbeena50%increaseinthenumberofactiverequirementsforunitsinthe+100,000sqft(9,290sqm)range.
• Notabledealsincludethelettingof86,000sqft(7,990sqm)atLeewayIndustrialEstatetoFoxHeavyHaulageLimited.
supply
• Totalsupplyincreasedonlastyear’sfigureswithavailabilityatImperialParkand163,970sqft(15,231sqm)atQueenswayMeadows.
• Owneroccupierscontinuetosearchforgoodqualityfreeholdopportunitiesastheamountofgoodqualitystockremainssuppressed.Unitswithyardsareinscarcesupplyandcommandpremiums.
• 66%ofstockcomprisesunitsoflessthan10,000sqft(929sqm),10%downon2013figuresastenantdemandincreasesforunitsofthissize.
headline rent
• Headlinerentsremainedconstantat£4psf(£43.60psm).
• Weexpectupwardspressureonrentallevelsforbetterqualitystock.
Key (sqm)sqft
Alder King Market Monitor 201517
demand000ssqft
100
0
200
250
2010 2011 2012 2013 2014
150
5043(4)
80(7)
172(16)
78(7)
115(11)
supply000ssqft
200
0
400
500
2010 2011 2012 2013 2014
300
100
446(41)
460(43)
386(36) 345
(32)
360(33)
headlinerent£psf
0
5
10
15
20
2010 2011 2012 2013 2014
citycentre outoftown
(172
.22
)16
(16
1.45
)15
(172
.22
)16
(172
)16
(172
)16
(16
1.45
)15
(139
.93
)13
(139
.93
)13
(129
)12
(129
)12
demand000ssqft
100
0
300
400
500
600
700
2010 2011 2012 2013 2014
200
407(38)
404(38)
652(61)
385(36)
220(18)
supply000ssqft
0
500
750
1,000
1,250
1,500
1,750
2010 2011 2012 2013 2014
250
1,080(100)
1,192(111)
1,104(103)
720(67)
1,008(94)
headlinerent£psf
0
2
3
4
5
6
7
2010 2011 2012 2013 2014
1
4.5(48.44) 4
(43.05)4
(43.05)4
(43)4
(43)
1. ASDA Superstore, Caldicot.
2. Artist’s impression of Friars Walk, Newport. Courtesy of Queensberry Real Estate.
3. Unit 103, Wales One, Magor. Courtesy of Charnwood.
Investment
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
John Benson T 0117 317 1100 E [email protected] James Nicholas T 029 2038 1994 E [email protected]
2 3
value of investment transactions
• Thevalueofinvestmenttransactionsin2014rosesignificantlyto£52.3mfrom£8.9min2013.£32.3mwasfromoneretailwarehousedealandtheremaining£20mfromWPCarey’spurchaseofAdmiralHouse,NewportQueensway,Admiral’snewly-developedcitycentreofficebuilding.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 7%
- Office 7%
- Retailhighstreet 6.25%
- Retailoutoftown 6.25%
investment by sector
• 62%oftheinvestmentactivitytookplaceintheretailwarehousesectorwithUBSpurchasingthe136,000sqft(12,635sqm)CwmbranRetailParkfromBritishLandfor£32.3m,6.4%NIY.
• TheothernotabledealwastheacquisitionbyNewYork-listedREITWPCareyofAdmiral’snewcitycentreofficebuildingfromScarboroughGroupfor£20m,6.4%NIY.The80,800sqft(7,507sqm)buildingwascompletedinMay2014ona20yearleasewithatenantbreakoptionat16years.ScarboroughGroupisnowconsideringthesecondphaseofredevelopmentoftheCambrianCentreandaimstoapplyforplanningpermissionlaterthisyear.
zone A headline rent
• QueensberryRealEstatecontinuestoattractnewtenantsatthe390,000sqft(36,232sqm)FriarsWalkscheme.LatestsigningsincludeH&Mwhohavetaken20,000sqft(1,858sqm)aswellastworestaurantchains.Theschemeisnow60%let.
• QueensberrytogetherwithBywaterPropertieshavealsopurchasedtheadjacent250,000sqft(23,226sqm)KingswayshoppingcentrefromUBSTritonFundwhereanchorsincludeWilkinsons,B&MandPeacocks.AnewSainsbury’sisexpectedtobeannounced.
out of town rent
• SpyttyRetailParkcontinuestostrengthenwithanewCafféNeroandHarvester.
• SportsDirecthasbeenrefusedpermissiontotransformthevacantMegabowlontheretailparkintooneofitslargeststoresintheUK.Ithadbeenhopingtorelocatefromitsexistingsiteandbuythefreeholdwithaviewtooccupyingthebuildinginitsentiretyorsub-lettingpartofthesitetoaseparateretailer.
leisure headline rent
• Inthecitycentre,FriarsWalkhasrecentlyannouncedanewLasIguanasandLeBistrotPierrewhichwillcomplementCineworldCinemas,Nandos,Cosmo,Frankie&Benny’s,PrezzoandChiquitos.AnewgymwillbeopeninginKingsway.
• InSeptember,theNATOsummitwassuccessfullyhostedbytheCelticManorResortwhere7,500delegatesattendedtogetherwith5,000journalists.Theresorthasalsoannouncedplansforanew£60millioninternationalconferencecentrewithcapacityfor4,000delegates.
18www.alderking.com
20
40
50
60
70
30
10
38%
62%
zoneAheadlinerent£psf
75
0
125
150
2010 2011 2012 2013 2014
100
50
25
(1,3
45
.44
)12
5
(1,3
45
.44
)12
5
(86
1.08
)8
0
(59
2)
55
(59
2)
55
outoftownrent£psf
10
0
25
35
2010 2011 2012 2013 2014
15
5
30
20
(24
7.5
6)
23
(215
.28
)20 (29
0.6
1)2
7
(26
9)
25
(26
9)
25
leisureheadlinerent£psf
0
5
10
15
25
2010 2011 2012 2013 2014
cinema health&fitness A3/A4
20
(129
.16)
12
(129
.16)
12
(129
)12
(129
)12
(86
.11)
8
(86
.11)
8
(86
)8
(86
)8
(19
3.75
)18
(19
3.75
)18
(19
4)
18
(19
4)
18
(118
.40
)11
(86
.11)
8
(18
8.3
6)
17.5
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
12.938.30 8.9
52.3
16.65
primeyields%
6
4
8
9
2013 20142012
7
5
20112010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
office
retailoutoftown
Industrial
Offices Noel Stevens T 01392 353093 E [email protected]
Noel Stevens T 01392 353093 E [email protected]
demand
• Demandremainsweak.HoweverlettingsatSuttonHarbourtoaccountantsFrancisClarkandRainConsultingshowthereisdemandatthetopendofthemarket,albeitinlimitednumbers.
• Themajorityofoccupiersarestillseekingcosteffectivespacebelow5,000sqft(464sqm).
• Confidenceisreturningandweexpectanincreaseinrequirementstobeseenin2015.
• FurtherinvestmenttocreateasustainablerailnetworkacrosstheSouthWestpeninsulaisvitaltosupportingbusinessactivity.
supply
• GradeAspaceisavailableonadesignandbuildbasisbutgoodqualityexistingstockisfewandfarbetween.
• Althoughsupplyhasincreasedoverall,theavailabilityofgoodqualitysecond-handstockislimited.Thereareonlyahandfulof10,000sqft(929sqm)plusoptionsavailable.
• TheShipatDerrifordisthelargestavailablespaceoffering51,065sqft(4,774sqm)ofoffices.Itcanbeconvertedtoprovideatotalof115,000sqft(10,684sqm).
• A£1.98mCouncilloantohelpunlockfurtherfundingfortheexpansionofPlymouthScienceParkwasapprovedinlate2014.
headline rent
• HeadlinerentsarebeingdrivenbythelettingsatSuttonHarbourat£16psf(£172psm).
• Themajorityofspaceisavailableinthe£10-£12.50psf(£108-£135psm)range.
demand
• Demandforcost-effectivespacecontinueswithMacfarlanePackagingacquiring12,600sqft(1,171sqm)atDrakeMillBusinessPark.
• Thelargestrecenttransactionwasthefreeholdacquisitionof24,378sqft(2,265sqm)at62ValleyRoad,PlymptonbyWakeman&SonsLtd.
supply
• Thedropinsupplyisattributedtoalackofnewbuildinthemarketanddemolitionofdilapidatedbuildings.
• SupplywillincreaseoverthecomingyearsasspaceatSouthYardbecomesavailable.Giventheproximitytowharfage,thiswillmeettherequirementsfromthemarinesectors.
• Weareseeingtheimpactofalackofdevelopmentreflectedinthequalityoftheremainingstock.
• Thebreak-upoflargebuildingshelpsmeetdemandforsmallerpremises.
headline rent
• Therewasnomovementinheadlinerentsin2014.
• Howeversmallunitsandtradecountersareseekingrentsinexcessof£6psf(£65psm).
Plymouth
(sqm)sqftKey
Alder King Market Monitor 201519
demand000ssqft
100
0
200
250
2011 2012 2013 20142010
150
50
90(8)
95(9)
145(13)
95(9)
100(9)
supply000ssqft
200
0
400
500
2010 2011 2012 2013 2014
300
100
325(30)
330(31)
360(33) 310
(29)
400(37)
headlinerent£psf
15
0
20
2010 2011 2012 2013 2014
5
10
(16
6.8
3)
15.5
(16
6.8
3)
15.5
(16
6.8
3)
15.5
(16
7)
15.5
(172
)16
citycentre outoftown
(172
.22
)16
(172
.22
)16
(16
2)
15
(16
2)
15
(16
2)
15
demand000ssqft
200
0
400
500
2010 2011 2012 2013 2014
300
100
200(19)
250(23)
500(46)
290(27)
230(21)
supply000ssqft
500
0
1,000
1,250
1,500
2010 2011 2012 2013 2014
750
250
1,000(93)
715(66)
720(67)
550(51)
1,400(130)
headlinerent£psf
2
0
4
7
2010 2011 2012 2013 2014
3
1
5
6
(64
.04
)5
.95
(64
.04
)5
.95
(64
.04
)5
.95
(64
)5
.95
(64
)5
.95
1
1. Plymouth Science Park. Courtesy of Plymouth Science Park.
2. Artist’s impression of South Yard, Plymouth. Courtesy of LHC.2
Investment
Retail & Leisure
John Benson T 0117 317 1100 E [email protected] Rossiter T 01392 353089 E [email protected]
zone A headline rent
• DemandremainsfocusedaroundDrakeCircuswithnewopeningsfromJackWillsinapop-upstoreandthenewretailofferingfromTheoPaphitis’sbrandBouxAvenue.
• AnewfouracremixedusedevelopmentOceanBoulevardisplannedforPlymouth.Theschemewillinclude37,000sqft(3,437sqm)ofretailcomplementingasupermarket,studentaccommodationandhotels.
• ThehighstreetsawnewlettingstoSaltrock,OpticalExpressandGamesWorkshop.
out of town rent
• RentshaveincreasedwithheadlinefiguresagreedatMarshMillsandBroadwayShoppingCentre,Plymstock.
• Outoftownstockremainedfairlystaticwithnewstockcomingtothemarketatasimilarpacetothatbeingoccupied.
• MutleyPlainsawanumberoflongstandingvoidsfillupin2014.
• Theoutoftownmarketsawanincreaseinfreeholdsales.Bothvacantandinvestmentopportunitiessawanupturnindemand.
leisure headline rent
• PlymouthremainspopularwithnewrestaurantsincludingTheStable,TheSamphireBushandLeBistrotPierreallopeninglastyear.
• BritishLandannounceditistodevelopDrakeCircusLeisure,acirca100,000sqft(9,290sqm)leisureschemenexttoDrakeCircusShoppingCentre.The£40milliondevelopmentwillincludea12screencinemaoperatedbyCineworld,13restaurantunitsand450carparkspaces.
value of investment transactions
• Therewasasignificantincreaseininvestmenttransactionscomparedto2013.Thelevelhasincreasedfrom£9.63mtoover£70m.Thisisthehighestlevelsince2010.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.25%
- Office 7%
- Retailhighstreet 6.25%
- Retailoutoftown 6%
investment by sector
• Approximately20%ofthedealswereintheindustrialsectorwithlotsizesrangingfrom£1.7mtoover£6m.ThelargestofthesewasthepurchaseofFaradayMillTradeParkbyParabolaCapitalfor£6.3m,11.6%NIY.Thecirca135,000sqft(12,542sqm)tradeparkismulti-lettovarioustenants.
• AnothersignificantdealwastheacquisitionbyOvalRealEstateofLangageOfficeCampusfor£11.56m,7.75%NIY.TheofficeislettoEEwithaleaseexpiryin2028.
• DerrifordHospital,anewlycompleteddevelopment,soldtoAvivafor£22m,6.1%NIYattheendof2014.83%oftheincomeisfromthecarparkandtheremainderfromofficeandretailtenants.
Lee Southan T 01392 353090 E [email protected]
20www.alderking.com
100
200
250
300
350
150
50
zoneAheadlinerent£psf
150
0
250
2010 2011 2012 2013 2014
200
100
50
(1,8
83.
61)
175
(1,8
83.
61)
175
(1,6
14.6
0)
150
(1,6
15)
150
(1,6
15)
150
outoftownrent£psf
10
0
20
30
2011 2012 2013 2014
15
5
2010
25
(24
2.18
)22
.5
(24
2.18
)22
.5
(24
2.18
)22
.5
(?)
20.5
(26
9)
25
leisureheadlinerent£psf
0
5
10
15
20
2010
cinema health&fitness A3/A4
(139
.93
)13
(10
7.6
4)
10
(19
3.74
)18
2011
(139
.93
)13
(86
.10)
8
(16
1.46
)15
2012
(139
.93
)13
(86
.10)
8
(16
1.46
)15
2013 2014
(14
0)
13
(14
0)
13
(86
)8
(86
)8
(16
1)15
(16
1)15
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
278.2
9.63
71.5
13.62
primeyields%
6
4
8
9
2011 2013 20142012
7
5
2010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown26.33
5%
56%17%
industrial
office
retailhighstreet
retailoutoftown
other
22%
Swansea 1
Industrial
Offices Owen Young T 029 2038 1996 E [email protected]
Owen Young T 029 2038 1996 E [email protected]
demand
• Take-upremainedatsimilarlevelsto2013andstillsubstantiallybelowthefiveyearaverageof100,000sqftperannum(9,290sqm).
• Therewerelessthan30transactionsthroughout2014,themostnotableofwhichincludedTuiTraveltaking14,500sqft(1,347sqm)atAlexandraHouseandTheNationalAutisticSocietytaking2,559sqft(238sqm)at6PhoenixWay.
supply
• Availabilitydecreasedslightlyduetoalackofnewdevelopmentcorrespondingwithtake-up.
• Over80,000sqft(7,432sqm)ofhighqualitybuildingsstillremainatCruciblePark,SwanseaVale,sincefirstbecomingavailablein2008.
headline rent
• Rentsremaininlinewith2013levels.
• WithlittlemodernaccommodationavailableinSA1andthecitycentre,headlinefiguresshouldbemaintainedinto2015.
• Outoftownrentsandincentivesshouldcontinueatthesamelevelthrough2015.
demand
• 2014sawasubstantialincreaseintake-upincludingthelettingof182,000sqft(16,908sqm)toTrojanElectronics,turningtheformerKingsDockBuildingintoitsnewHQ.
• ExcludingtheTrojandeal,take-upsignificantlyimprovedfromsameperiodin2013.
• Approximately60%oftake-upisaccountedforbyunitsof5,000sqft(465sqm)orless.
supply
• Supplyfellin2014duetoincreaseddemandwhichincludedtransactionssuchasthesaleofthe222,391sqft(20,661sqm)formerSignodeFactoryonFabianWayaccountingfor13%ofthepreviousyear’savailablespace.
• Stockprovidinglessthan10,000sqft(929sqm)accountsforapproximately77%ofallavailablestock.
headline rent
• Overthepastthreeyearsrentallevelshaveremainedunchanged.
• Thehighproportionofexistingsecondarystockandthelimitedamountofnewstockbeingbroughttothemarkethavehinderedrentalgrowth.
(sqm)sqftKey (sqm)sqftKey
Alder King Market Monitor 201521
demand000ssqft
0
100
150
200
250
2010 2011 2012 2013 2014
50
163(15)
108(10)
68(6)
62(6)54
(5)
supply000ssqft
0
100
200
300
400
600
2010 2011 2012 2013 2014
500566(53)
490(46)
473(44) 430
(40)
521(48)
headlinerent£psf
15
0
20
2010 2011 2012 2013 2014
5
10
citycentre outoftown
(15
6.0
7)
14.5
(14
8)
13.7
5
(15
6.0
7)
14.5
(15
6)
14.5
(15
6)
14.5
(123
.78
)11
.5
(115
.71)
10
.75
(115
.71)
10
.75
(116
)10
.75
(116
)10
.75
demand000ssqft
0
200
400
600
800
1,200
2010 2011 2012 2013 2014
1,000
472(44)
461(43)
795(74)
180(17)
634(59)
supply000ssqft
1,000
0
2,000
2,500
3,000
3,500
2010 2011 2012 2013 2014
1,500
500
2,755(256)
2,755(258)
2,315(215)
1,724(160)
1,602(149)
headlinerent£psf
2
0
4
5
6
7
2010 2011 2012 2013 2014
3
1
4.2(45.21)
4.2(45.21)
4.2(45)
4.2(45)
4.35(46.82)
1. Salubrious Place, Swansea. Courtesy of Mansford Real Estate.
2. CGI of Parc Tawe, Swansea. Courtesy of Hammerson.
3. CGI of Oyster Wharf, The Mumbles. Courtesy of Nextcolour Developments Ltd.32
Investment
Retail & Leisure Owen Young T 029 2038 1996 E [email protected]
John Benson T 0117 317 1100 E [email protected] James Nicholas T 029 2038 1994 E [email protected]
value of investment transactions
• ThetotalvolumeofinvestmenttransactionsinSwanseafor2014was£26.37m.Thisisareducedlevelcomparedto2013but65%ofthe2013figurewasattributabletoonesingletransaction-M&G’s45yearincomecommitmenttoprovide£32mofdevelopmentfinanceforstudentaccommodationatSwanseaUniversity.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 7.25%
- Office 7.5%
- Retailhighstreet 6.75%
- Retailoutoftown 5.75%
investment by sector
• Thelargesttransactionduring2014wasintheleisuresector.InFebruary2014,MansfordRealEstatepurchasedSalubriousPlacewhichoffersa116bedPremierInnHotel,aVueCinema,nightclub,casinoandanNCPcarpark,for£24.10m.
• Inthehighstreetretailsector,GreenstoneStirlingpurchased58-60TheKingswayfor£1.77m,8.00%NIY.ThepropertyislettoTheCo-Opforafurther9.5years.
• Lookingattheindustrialsector,Unit1PembertonRetailPark,Llanellisoldfor£500,000,7.10%NIY.TheunitislettoScrewfixona10yearleasefromJanuary2014.
zone A headline rent
• Theproposedtowncentreregenerationremainsuncertainwhilstanewdeveloperissought.Thishasnodoubthadaneffectondemand.
• YoursClothinghastakenspaceat801OxfordStreetandSweetScentandIcelandhavebothtakenspaceintheQuadrantCentre.
out of town rent
• Hammersonhasgainedconsentfora240,000sqft(22,296sqm)refurbishmentofitsParcTaweschemebutiscurrentlyappealingcertainplanningconditionsinordertofacilitateastartonsiteinsummer2015.
• NextcolourDevelopmentsLimitedhascommencedpreliminaryworksatOysterWharf,Mumbles’waterfrontdevelopmentwhichwillincluderestaurants,newretailstoresandaspa/gym.
leisure headline rent
• A3demandremainsstrongwithanewlettingtoLasIguanasreinforcingWindStreetastheprimeleisurelocation
• ThevastmajorityofTheBoulevardscheme,betweentheRiverTawebridgesandPrincessWay,iscomplete.Thiswillgeneratebetterlinksbetweenthecitycentreandthewaterfrontandbecomeafarmorepedestrian-friendlyenvironment.
22www.alderking.com
7%
(1,2
37.8
0)
115
(1,18
4)
110
(1,18
4)
110
(1,0
76)
100
(1,0
76)
100
zoneAheadlinerent£psf
75
0
125
150
2010 2011 2012 2013 2014
100
50
25
outoftownrent£psf
0
20
50
2010 2011 2012 2013 2014
10
40
30
(376
.72
)35
(376
.74
)35
(376
.74
)35
(377
)35
(377
)35
leisureheadlinerent£psf
0
5
10
15
25
2010 2011 2012 2013 2014
cinema health&fitness A3
20
(118
.40
)11
(129
.17)
12
(129
.17)
12
(129
)12
(129
)12
(10
7.6
4)
10
(10
7.6
4)
10
(96
.88
)9
(97
)9
(97
)9(16
1.45
)15
(18
2.9
9)
17
(18
2.9
9)
17
(215
)20
(215
)20
valueofinvestmenttransactions£ms
40
0
80
100
120
140
2010 2011 2012 2013 2014
60
20
17.9
113.9
8.65
49.64
26.37
primeyields%
5
3
7
8
2012 2013 2014
6
4
20112010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
2%
91%
industrial
retailhighstreet
other
Swindon
Industrial
Offices
(sqm)sqft
James Gregory T 01793 428106 E [email protected]
James Gregory T 01793 428106 E [email protected]
1
demand
• 2014witnessedthehighestleveloftake-upsincebeforetherecession.
• SignificantoutoftowndemandcamefromNationwidewhichtook29,000sqft(2,694sqm)attheTrilogyBuildingatKembreyParkandSwindonSiliconSystemswhichtook34,000sqft(3,159sqm)atInterfaceHouse,RoyalWoottonBassett.
• Therewasasignificantimprovementinthetake-upofintownofficebuildings,withmanyserviceprovidersfortheelectrificationofthemainlinerailwayseekingrepresentationclosetothestation.Intowntransactionsrepresented30%oftake-up.
supply
• Overallsupplyreducedasaresultofanimprovedlevelofdemandfromofficeoccupiers.
• Therehasalsobeenareductionofsupplyaspoorerqualitystockisconvertedforresidentialuse.Thishasinmostcasesbeenwholevacantbuildingsbutithasledtosomedisplacementofofficeoccupiers.
• Thereisnowaverysmallsupplyofgoodqualitylargerformatofficeaccommodationandthishasledtosomespeculativerefurbishmenttakingplace.
• Supplyisexpectedtocontinuetofallasaresultofimproveddemandfrombothofficeoccupiersandresidentialdevelopers.
headline rent
• Towncentrerentshaveshownasmallimprovementduetoanoverallreductioninopportunitiesforoccupiers.
• Quotingrentsarebeingreviewedinmanycasesaslandlordsseektotakeadvantageofimprovedmarketconfidence.
• Tenantincentivesarereducingaslandlords’confidencebeginstoimprove.
demand
• Demandduring2014wasatitslowestlevelsincebeforetherecessionbutthenumberoftransactionscontinuedatasimilarleveltopreviousyears.
• Therewasanabsenceoflargetransactionsin2014whichhasimpactedannualtake-up.
• Thelargestlettingin2014wasSignallingSolutionsLimited’smovetoDorcanIndustrialEstatecloselyfollowedbyAlditakingtwofurtherbuildingsatSouthMarstonPark.
• Thereareseverallargelongtermrequirementswhichareanticipatedtocometofruitionearlyin2015.
supply
• TherehasbeenalimitedreductionofsupplyastheformerTriumphandTDPackagingbuildings,bothatGroundwellIndustrialEstate,becamevacantin2014.
• ThereisonespeculativenewbuildschemeprovidingvariousbuildingsatthesiteoftheformerFarepakbuildingatWestmeadandthe100,000sqft(9,290sqm)MetroBuildingatGroundwellIndustrialEstateisbeingcomprehensivelyrefurbished.
• Themostactivesectorofthemarketthroughout2014wassub5,000sqft(465sqm)withsome57%oftransactionstakingplaceinthissizebracket.
headline rent
• Therewerecasesin2014wherethequotingrentswereachieved-adirectresultofthelowlevelofgoodqualitystock.
• Incentivessuchasrentfreeperiods,steppedrentalarrangementsandlandlordspayingfortenantfit-outworksarereducing.
• Thereisaclearcorrelationthattenantswillpayforbetterqualityaccommodation.Neworrefurbishedspaceisfindingoccupiersmoreeasily.Poorqualityspaceisincreasinglydifficulttolet.
Key
Alder King Market Monitor 201523
demand000ssqft
100
0
200
250
300
350
400
2011 2012 2013 20142010
150
50
205(19)
85(8)
170(16)
199(18)
227(21)
400
0
800
1,000
1,200
1,400
1,600
2011 2012 2013 20142010
600
200
1,306(121)
1,320(123)
1,150(107) 1,020
(95)
790(73)
supply000ssqft headlinerent£psf
0
5
10
15
20
2011 2012 2013 20142010
towncentre outoftown
(19
9.12
)18
.5
(172
.22
)16
(172
.22
)16
(18
8)
17.5
(18
8)
17.5
(16
9.5
3)
15.7
5
(16
9.5
3)
15.7
5
(16
9.5
3)
15.7
5
(16
1)15
(172
)16
demand000ssqft
400
0
800
1,000
1,200
1,400
1,600
1,800
2010 2011 2012 2013 2014
600
200
1,823(169)
1,184(127)
986(92)
557(52)
1,043(97)
supply000ssqft
1,000
0
2,000
2,500
3,000
3,500
2010 2011 2012 2013 2014
1,500
500
2,625(244)
1,900(176)
1,800(167)
1,723(160)
2,302(214)
headlinerent£psf
2
0
5
7
2011 2012 2013 20142010
3
1
6
4
(72
.65
)6
.75
(72
.65
)6
.75
(72
.65
)6
.75
(73
)6
.75
(73
)6
.75
1. Newsquest Offices, Old Town, Swindon.
2. 67K Athena Avenue, Swindon
3. CGI of Regent Circus, Swindon. Courtesy of Ashfield Land.2
Investment
Retail & Leisure James Gregory T 01793 428106 E [email protected]
John Benson T 0117 317 1100 E [email protected] James Gregory T 01793 428106 E [email protected]
3
zone A headline rent
• ThemajorityoftheRegentCircusdevelopmentopenedinNovemberandDecember;theCineworldisduetoopeninFebruary.Notonlyhastheschemeimmediatelychangedhandswithverystronginvestorappetite,theimprovementtotheimmediatevicinityandoccupierdemandiscleartosee.
• H&Mistakinganew25,000sqft(2,326sqm)storeinTheParadeinthetowncentre.
• FurtherpublicrealmprojectsareplannedforthetowncentreincludingHavelockSquare,demonstratingtheoptimismforthemainretailarea.
out of town rent
• GreatWesternWayhasseenMcDonaldsopenanewtwostoreydrive-thrufacilityandWrenKitchensiscurrentlyonsitecarryingoutacompleterebuildoftheformerFerraricarshowroom.
• WaitroseopeneditsfirstSwindonoperationatWichelstoweandistradingwellaheadoftarget.
• AldihassecuredplanningpermissionforitsfourthoutletinSwindonatShawinWestSwindon.
leisure headline rent
• TheextensionoftheOutletCentrebyMcArthurGlen/HendersonInvestorsisnowcomplete.Thishasallowedseveralexistingoccupiers,includingMarks&SpencerandNext,toexpandaswellasattractingnewretailers.NewoperatorstothefoodcourtincludingWagamamahavealsobeensecured.
• Followingajointventureagreement,severalleisurefacilitiesownedbySwindonBoroughCouncilarenowtoberefurbishedandrunbyGreenwichLeisureLimited.
value of investment transactions
• Therewasanincreaseofcirca14%inthevalueofinvestmenttransactionsinSwindonoverthelastyear,£76.5mbeingthehighestvalueoftransactionsseensincepre-2009.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.5%
– Office 6.5%
– Retailhighstreet 6.5%
– Retailoutoftown 5.75%
investment by sector
• OneofthelargestinvestmenttransactionsinSwindonwastheacquisitionatSouthMarstonParkbyLondonMetricinMarchfor£22.1m,6.45%NIY.OakFurnitureLandisthetenantwith8yearsunexpired.Thedistributioncentrehasun-implementedplanningconsentfora150,000sqft(13,935sqm)extension.
• Anothersignificanttransactionwasintheleisuresector.RegentCircuswaspurchasedbyUKCPTLtdfor£40.50m,5.30%NIY.TenantsincludeMorrisonsandCineworld.
• Intheofficesector,DrakesMeadowlettoThringsLLPuntil2021waspurchasedfor£3.8m,10%NIY.
24www.alderking.com
leisureheadlinerent£psf
0
5
10
15
20
25
30
2011 2012 2013 20142010
cinema health&fitness A3/A4
(118
.40
)11
(96
.87
)9
(19
3.74
)18
(118
.40
)11
(96
.87
)9
(19
3.74
)18
(118
.40
)11
(96
.87
)9
(19
3.74
)18
(118
.40
)11
(96
.87
)9
(19
3.74
)18
(16
1)15
(322
.92
)30
valueofinvestmenttransactions£ms
0
40
60
80
100
2010 2011 2012 2013 2014
20
zoneAheadlinerent£psf
150
0
250
2010 2011 2012 2013 2014
200
50
100
RegentSt. BrunelCentre
(1,0
76.3
5)
100
(1,0
76.3
5)
100
(1,8
29.8
0)
170
(1,8
29.8
0)
170
outoftownrent£psf
15
0
25
35
2010 2011 2012 2013 2014
20
5
10
30
(30
1.38
)28
(30
1.38
)28
(30
1.38
)28
(30
1)2
8
(30
1)2
8
primeyields%
6
4
8
9
2012 2013 20142011
7
5
2010
investmentbysector
62.5
3.77
67.2
76.5
38.2 industrial
office
retailhighstreet
retailoutoftown
industrial
office
other
(74
3)
80
(74
3)
80
(74
3)
80
(1,6
14.5
8)
150
(1,6
15)
150
(1,6
15)
150
37%
10%
53%
(97
)9
Taunton 1
Industrial
Offices
(sqm)sqft
Andrew Maynard T 01823 444879 E [email protected]
Andrew Maynard T 01823 444879 E [email protected]
demand
• Leaseholdenquirieswererelativelyconsistentthroughout2014.
• Demandfortheoutoftownmarketispolarised,withamajorityatsub3,000sqft(279sqm)andsomefurtherdemandbetween10,000-20,000sqft(929–1,851sqm).
• Localoccupiersareincreasinglyconfidentintheirattitudetowardsrelocationinordertoimprovetheiraccommodation.
supply
• Anumberofbuildingsremainedavailablethroughout2014inboththetowncentreandoutoftownmarket,althoughtheytendtobeoflowerquality.
• Themajorityofaccommodationisstillwithinthetowncentreandisofmixedquality.
• Changesinthepublicsectoraccommodationstrategycouldseefurtheraccommodationenterthemarketin2015.
headline rent
• Nonewbuildswereundertakenin2014,eitherintownoroutoftown.
• Incentivelevelsremainedbroadlysimilarto2013andarestillgenerallylowerintheoutoftownmarket.
• Towncentrerentalscontinuetobedepressedbytheimbalanceindemandandsupply.
demand
• RequirementsfortheM5aroundtheTauntonareaimprovedconsiderablyin2014.
• DemandfromHinkleyCsupplychaincompaniesstartedtoincreaseinQ42014andislikelytocontinuein2015assumingthefinalinvestmentdecisionismadeinQ12015.
• Demandfromlocalcompaniesandthedistributionsectorhasincreasedandsentimentismuchmorepositive.
supply
• SupplyroseslightlyduringtheyearbutthereisstillanundersupplyofaccommodationwithintheTauntonmarket.
• Thisunder-supplyisparticularlyconcerninginthe20,000-50,000sqft(1,858–4,645sqm)sizerange,especiallygiventheincreaseddemandforunitsofthissize.
• SpeculativedevelopmenthasbeenseeninneighbouringtownsbutthereisstillalackofimmediateopportunitiesinTaunton.
headline rent
• Rentsremainedstablewithsomeimprovementforsecondarypropertyrentallevels.
• Itisverylikelythatrentswillincreasein2015asdemandcontinuestooutstripsupply.
• Incentivelevelsarelikelytoreduceascompetitionforpropertiesincreases.
Key
Alder King Market Monitor 201525
demand000ssqft
50
0
100
125
150
2010 2011 2012 2013 2014
75
25
100(9)
110(10)
90(8)
120(11)
120(11)
supply000ssqft
50
0
100
125
150
175
200
2010 2011 2012 2013 2014
75
25
170(16) 165
(15)156(14)
160(15)
164(15)
headlinerent£psf
6
0
10
12
14
16
18
2010 2011 2012 2013 2014
8
2
4
towncentre outoftown
(18
2.9
8)
17
(18
2.9
8)
17
(18
2.9
8)
17
(18
3)
17
(18
3)
17
(177
.60
)16
.5
(177
.60
)16
.5
(177
.60
)16
.5
(178
)16
.5
(178
)16
.5demand000ssqft
0
100
200
300
400
500
2010 2011 2012 2013 2014
180(17)
200(19)
250(23)
395(37)
160(15)
supply000ssqft
100
0
200
250
300
2010 2011 2012 2013 2014
150
50
250(23)
250(23) 220
(20)
285(26)
270(25)
headlinerent£psf
2
0
4
8
2010 2011 2012 2013 2014
3
1
6
5
7
(64
.58
)6
(64
.58
)6
(69
.96
)6
.6
(75
)7
(75
)7
1. Artist’s impression of Network Rail’s proposed redevelopment of Taunton railway station.
2. Unit 6K6, Blackbrook Business Park, Taunton.
3. Third Way Bridge, Taunton. Courtesy of Graham Shaw.2 3
Investment
Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]
John Benson T 0117 317 1100 E [email protected] Maynard T 01823 444879 E [email protected]
zone A headline rent
• Occupancylevelsremainrelativelystrongintheprimeandsecondaryareasofthetown.
• Severalnationalretailersandrestaurantschainsareinadvancediscussionstotakespaceinthetown,whichbodeswellfor2015.
• TauntonRethink,astudytoconsiderthefuturedirectionofthetowncentre,waspublishedatthebeginningof2014.GoodprogresshasbeenmadewithproposalsfortheFirepoolregenerationareatothenortheastofthehistorictowncentre,includingretailandleisureactivities.
out of town rent
• Constructionofthenortherninnerdistributorroadisprogressingandwillimproveaccessibilitythroughthetown,potentiallyopeningupnewopportunitiesaswellasimprovingsomeexistingschemes.
• AplanningapplicationfortherelocationofLidltoanewsiteinCastleStreet(oppositeTesco)islikelytobedecidedinQ12015.Elsewherethesupermarketshavebeenquiet.
leisure headline rent
• TherehasbeenincreasinginterestinthetownfromA3/A4operatorswithanumberofdealslikelytofallintoplacein2015.Nando’sopenedinForeStreetduring2014.
• FurthernewopportunitieswithinthetownwillonlybepossiblewithlargemixeduseschemesatFirepool,CoalOrchardandtheOrchardShoppingCentre.
value of investment transactions
• Thetotalvolumeofinvestmenttransactionsin2014fellbycirca21%from£21.45min2013to£17.02m.Theaverageinvestmentvalueoverthelastfiveyearsis£18.93m.
• ThelargestinvestmentdealwasintheretailwarehousesectorwithStJohnsRetailParksellingfor£6.66m.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.75%
- Office 6.75%
- Retailhighstreet 5.5%
- Retailoutoftown 5.75%
investment by sector
• ThelargestretailwarehousetransactionwasthesaleofStJohnsRetailParkinJune2014toThreadneedlefor£6.66m,7.45%NIY.TenantsareGoOutdoorsandDFSwithcirca16yearsunexpired.
• Inthehighstreetretailsector,CBREGlobalInvestorspurchased47-50ForeStreet,lettoWHSmithfor10years,for£2.9m,6.50%NIY.
• Intheofficesector,thecirca63,000sqftRiversideChamberssoldinMarchfor£4.9m,15.6%NIY.
26www.alderking.com
20
30
40
50
10
leisureheadlinerent£psf
15
0
25
2010 2011 2012 2013 2014
20
10
5 (129
.16)
12
(129
.16)
12
(129
)12
(129
)12
(10
7.6
4)
10
(129
.16)
12
zoneAheadlinerent£psf
0
50
75
100
125
175
EastSt. OldMarketCentre
25
(96
8)
90
(96
8)
90
(96
8)
90
(96
8)
90
(96
8)
90
150
outoftownrent£psf
10
0
20
25
20112012 2012 2013 20142013 2014
15
5
201020112010
(20
4.5
1)19
(20
4.5
1)19
(20
4.5
1)19
(20
5)
19
(20
5)
19
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
14.03
21.45
17.02
36.10
6.03
primeyields%
5
3
7
8
2011 2013 20142012
6
4
2010
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
(86
.11)
8
(86
.11)
8
(86
)8
(86
)8(1
61.4
5)
15
(16
1.45
)15
(16
1)15
(172
)16
17%39%
15%
29% office
retailhighstreet
retailoutoftown
other
cinema health&fitness A3/A4
Truro 1
Industrial
Offices Tom Duncan T 01872 227005 E [email protected]
Tom Duncan T 01872 227005 E [email protected]
demand
• Officetake-upincreasedforthefirsttimeinfiveyearsbutisstillbelow2010levels.
• Asingletransactioncanhaveasignificantimpactonthefiguresduetothesizeofthemarket.
• Themarketisfurtherdistortedbytheacquisitionofsomebuildingsforalternativeuse-whereidentifiedtheseareexcluded.
• Preferenceremainsformoderncitycentreaccommodationwithcarparking.
• DemandatTruroBusinessParkhasimprovedwithanumberoftransactionstakingplace.
• Thereareincreasedfreeholdoccupierenquiries.
supply
• Thesupplyofofficeaccommodationincreasedcomparedto2013.
• Somelargerfreeholdbuildingsreceivedmoreinterestfromapplicantslookingforachangeofuse.
• Therecontinuestobeanover-supplyofsecondaryaccommodationabovegroundfloorwithnoparkinginthecitycentre.
• WhilethereissomenewdevelopmentproposedatTruroBusinessPark,suchdevelopmentisgenerallyonlyviablewiththeassistanceofgrantfunding.
headline rent
• Groundfloorcitycentreofficeswithparkingcanachieveapremiumrentalforcertainoccupiergroups.
• Shorterleasetermswithfiveyearorearlierbreakclausesarebecomingmorecommon.
• Inconjunctionwiththeabove,incentivesintheformofinitialrentfreeperiodsorsteppedrentalarrangementsarestillcommon.
demand
• Demandincreasedslightlyalthoughthefiguresreportedcanbedistortedbyasmallnumberofindividualtransactions.
• DemandremainsfocusedonmodernaccommodationwithgoodaccesstotheA30.
• Demandisoftenlatentandnotapparentuntilaspecificpropertycomestothemarket.
• Unsatisfieddemandexistsinlocationswithalackofsupply,oftenasaresultofageingstockandlimiteddevelopmentoverrecentyears.
• Increasedfreeholdoccupierenquiriesarebeingreceived.
supply
• Supplyhasincreasedfromthepreviousyear.
• Newdevelopmentisgenerallyonlyviablewiththeassistanceofgrantfunding.ThelatestbandofERDFfundinghasended,withfurtheravailabilitynotanticipatedtocomeonstreamuntilmid-2015.
• Thereisanover-supplyofolderaccommodationandanunder-supplyofmodernspace.
• TherehavebeentworecentgrantfundedschemesinCornwall.ThedevelopmentatQuintrellDownsnearNewquayisalltakenbutfurthersupplywillnotbeforthcomingwithoutgrantfunding.
headline rent
• Rentshaveremainedsteadyforprimemodernindustrialaccommodation.
• TenantsaregenerallyrequestingshorterleasetermswithmorefrequentOptionstoBreak.
• Incentivesintheformofrentfreeperiodsorsteppedrentalarrangementsarebecomingmorecommon,especiallyinolderaccommodation,inordertosecurelettings.
• Owneroccupierorpersonalpensionfunddemandforfreeholdsisbecomingmorepopular,especiallyforsmallerbusinesses.
(sqm)sqftKey (sqm)sqftKey
Alder King Market Monitor 201527
2010
demand000ssqft
20
0
40
50
60
2010 2011 2012 2013 2014
30
10
50(5)
40(4)
25(2)
55(5)
58(5)
supply000ssqft
100
0
200
250
2010 2011 2012 2013 2014
150
50
170(16)
200(19)
200(19)
125(12)
187(17)
headlinerent£psf
4
0
8
16
2010 2011 2012 2013 2014
6
2
(113
.02
)10
.5
(118
.40
)11
14
12
10
demand000ssqft
100
0
200
250
300
350
2011 2012 2013 2014
150
50 60(6)
80(7)
200(19)
217(20)
90(8)
supply000ssqft
200
0
400
500
600
2010 2011 2012 2013 2014
300
100
200(19)
400(37)
480(45)
380(35)
437(41)
headlinerent£psf
4
0
8
10
2010 2011 2012 2013 2014
6
2
(75
.34
)7
(75
.34
)7
(75
.34
)7
(75
)7
(75
)7
(91.4
9)
8.5
(91)
8.5
(91)
8.5
citycentre outoftown
(118
.40
)11
(118
)11
(118
)11
1. Lysnoweth House, Truro.
2. Brunel Business Park, St Austell.
3. Old Vicarage Place, St Austell.2 3
Investment
Retail & Leisure Tom Duncan T 01872 227005 E [email protected]
John Benson T 0117 317 1100 E [email protected] Tom Duncan T 01872 227005 E [email protected]
zone A headline rent
• Trurovacancyrates–alreadybelowthenationalaverage–droppedinthesecondhalfof2014.
• Primarkconfirmeditwilltake50,000sqft(4,645sqm)inLemonQuay,resultinginotherrelocationsandextensionofthebuilding.
• 3Storehastakentheformergamingshopat6PydarStreet.
out of town rent
• TherewaslimitedoutoftownactivityinTruroin2014.
• AnewWaitroseisnowwellunderconstructionontheeasternsideofthecity.
• HelicalRetailhassubmittedplansfor90,000sqftofnon-foodretaildevelopmentontheTruroCityFootballClubsite.
• Furtherapplications,includingfoodstoreproposals,arebeingconsideredintheThreemilestonearea.
leisure headline rent
• TheretirementsectorisparticularlyactivewithMcCarthy&Stonewell-progressedwithitsredevelopmentontheformerBrookdaleHotelsite,andChurchillunderwaywiththeredevelopmentoftheformerPoliceStationsite.
• DiscussioncontinuesregardingthepossibleconstructionofaStadiumforCornwallatWestLangarth.
value of investment transactions
• Thevalueofinvestmenttransactionsfellsignificantlyin2014from£42.75mto£14.05m.However£40mofthe£42.75mtotalfor2013wasmadeupbythesaleofLemonQuay,amulti-letretailparadethatsoldtoCorboLtd.
• Themajorityofthe2014valueisintheretailwarehousesector.
prime yields
• Ourcurrentviewofprimeyieldsisasfollows:
- Industrial 6.5%
- Office 7%
- Retailhighstreet 5%
- Retailoutoftown 6.5%
investment by sector
• ThelargesttransactionwasThreadneedle’spurchaseofNewquayRoadRetailParkinJulyfor£10.1m,6.57%NIY.Tenantsatthecirca50,000sqft(4,645sqm)retailparkincludeHarveys,Dunelm,DreamsandHobbycraft.
• TheothertransactionwasColliersCapital’spurchaseof11-12BoscawenStreet.ThetenantisWaterstonesandthepropertywassoldfor£3.95m,6.50%NIY.
28www.alderking.com
10
30
40
50
60
20
outoftownrent£psf
10
0
20
25
2010 2011 2012 2013 2014
15
5
(215
.27
)20
(215
.27
)20
(215
.27
)20
(215
)20
(215
)20
10
0
20
25
2010 2011 2012 2013 2014
15
5
(26
9.0
9)
25
(26
9.0
9)
25
(215
)20
(215
)20
(215
)20
leisureheadlinerent£psf
valueofinvestmenttransactions£ms
0
2010 2011 2012 2013 2014
14.76
42.75
14.05
6.940
primeyields%
6
4
8
9
2013 20142012
7
5
20112010
zoneAheadlinerent£psf
75
0
125
175
20102010 2011 2012 2013 2014
100
25
50
150
(1,3
45
.5)
125
(1,3
45
.5)
125
(1,18
4)
110
(1,18
4)
110
(1,18
4)
110
PydarSt.
investmentbysector
industrial
office
retailhighstreet
retailoutoftown
A3/A4
72%
28% retailhighstreet
retailoutoftown
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