2015 Market Monitor South West of England & South Wales - Office
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Office Industrial Retail Leisure Investment Land
Market Monitor
South West of England & South Wales
2015
2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.
Contents
2 Welcome 11 Cardiff 21 Swansea
3 Across the region 13 Exeter 23 Swindon
5 Bath 15 Gloucester 25 Taunton
7 Bridgwater 17 Newport 27 Truro
9 Bristol 19 Plymouth 29 A service overview
1 Alder King Market Monitor 2015
Welcome
2014 Highlights
Market Monitor 2015 looks at the
£1.07 billion occupational and investment markets
Total value of South West and
Wales investment. in the South West of England and
£267.8 million Wales over the past 12 months, with
Sale of 50% stake in Cabot Circus,
Bristol to Aviva - the region’s largest
data, trends and analysis on 12 key
investment transaction.
regional centres including, for the
£28.50 per sq ft first time, Bridgwater, Somerset.
New record Bristol office rent.
Summary
1.75 million sq ft 2014 commercial property activity in the South West and Wales
Lowest Bristol industrial supply for was the strongest since the financial crisis, with strong occupational
11 years.
demand driving a buoyant regional investment market and supporting
the return of speculative developmentin a number of locations.
400,000 sq ft
Q4 Bristol city centre office take-up, the Last year saw a 51% increase in the level of office and industrial take-
highest quarterly take-up for 20 years. 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
22% up majority of centres recorded rental growth over the course of the year.
Cardiff’s five year average office take-up. The region’s new speculative office and industrial developments secured
high profile lettings in 2014 with some achieving record rents, confirming
1 million sq ft occupier appetite for Grade A space. There is now a pressing need to
Bristol city centre office space identified
bring forward more speculative development in key locations over the
for residential conversion via PDR.
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
www.alderking.com 2
Across the region
Offices Simon Price T 0117 317 1084 E sprice@alderking.com
office headline rent £psf
(307) 28.5
30
in town out of town
25
(231) 21.5
(237) 22
(226) 21
(199) 18.5
20
(188) 17.5
(188) 17.5
(178) 16.5
(159) 14.75
(167) 15.5
(183) 17
(156) 14.5
(172) 16
(172) 16
(172) 16
(162) 15
15
(116) 10.75
(129) 12
(129) 12
(124) 11.5
(118) 11
(91) 8.5
10
(86) 8
5
0
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occupational summary
• 2014 saw office take-up across the region • Supply overall has reduced across the region
increase again with Bristol, Cardiff, Newport, again, due not only to strong occupier take-up,
Swindon and Gloucester achieving strong but also the loss of further space for conversion
improvements in performance compared with in particular for residential use under Permitted
2013. In particular it was the increase in take-up Development Rights.
of modern Grade A space which boosted the • Rental growth is now evident in a number of
market in many locations. locations across the region with central Bristol
• The overall level of take-up in some locations is seeing new record rental levels achieved during
now being constrained by the limited supply of 2014. Further growth is likely in 2015.
good quality accommodation with Bath, Exeter • The overall reduction in supply is also resulting in
and north Bristol particularly affected. a reduction in the level of tenant incentives being
• So far only Bristol and Cardiff have seen major offered in most markets across the region.
new speculative development come forward and
in Bristol, both city centre schemes have met with
early success.
Industrial Andrew Ridler T 0117 317 1071 E aridler@alderking.com
industrial headline rent £psf
10
(83) 7.75
(86) 8
(86) 8
(81) 7.5
8
(73) 6.75
(75) 7
(75) 7
(65) 6
6
(64) 5.95
(54) 5
(45) 4.2
(43) 4
4
2
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occupational summary
• Take-up increased in 2014 on the previous year • Demand is increasingly focused on better
in all but Newport with the lack of good quality specified space with new build activity currently
supply increasingly a constraint to activity. underway in Bristol, Gloucester, Wellington,
• While supply increased in some centres, the Bridgwater and Truro.
core locations have seen further decreases in • With an improving number of medium sized
availability. requirements, occupiers are increasingly only
• The majority of centres will now support able to satisfy their needs via the design and
speculative development. build route.
• Supply in Bristol is now at its lowest level for • Key areas of growth will be from occupiers in the
11 years. logistics sector and particularly those involved
with internet fulfilment.
Key sq ft (sq m)
3 Alder King Market Monitor 2015
Retail & Leisure Charles Russell-Smith T 0117 317 1043
E crussell-smith@alderking.com Residential
Development
zone A headline rent £psf out of town rent £psf
300 50 Land
(2,422) 225
250 40
(2,153) 200
(2,153) 200
(2,153) 200
(377) 35
Chris Haworth
(377) 30
(377) 30
(323) 30
(323) 30
200
(301) 28
(1,615) 150
(1,615) 150
30
(269) 25
(269) 25
(269) 25
150 T 0117 317 1042
(430) 40
(592) 55
(215) 20
(1,076) 100
(1,076) 100
(1,184) 110
(205) 19
20
(183) 17
(968) 90
100 E chaworth@alderking.com
50 10
0 0
Development land market summary
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• In the first half of 2014 we witnessed
Ta
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Br
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increased market confidence, a rising
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volume of house sales and increased land
• 2014 saw another year of GDP growth and an The growth in online sales is likely to exacerbate buying activity. Most of the activity was
increase in both consumer confidence and the situation over coming years. focused on greenfield sites in desirable
spending. Whilst the level of sales on the high locations.
• As is currently being experienced across the
street increased, there was also a corresponding country, new development remains limited. • Where there were competitive bidding
increase in online sales. The 296,000 sq ft (27,800 sq m) Friars Walk situations for consented residential sites
• Improving sales figures and consumer confidence development in Newport is one of only two in desirable locations, generally analysis
continued the stabilisation of rents in prime centres due to open in 2015. showed rising land values.
trading locations across the region and, in a • The food store sector is dominated by Lidl and • During the third quarter of 2014, activity
limited number of instances, a growth in rent has Aldi, which both have aggressive expansion plans and sales volumes weakened, price
been recorded. However, the rents in secondary across the region. Elsewhere, the major food increases plateaued and in some cases
locations continue to be under pressure. stores continue to drive their expansion through slightly reduced. In our judgement the
• 2014 also saw a reduction in the number of a convenience format, with the Cooperative land market is being affected and this
voids across the majority of high streets in looking to be particularly active in 2015. change is being caused by several factors
the region. However, there was a marked including:
• Strong demand remains from A3 operators, both
polarisation towards prime pitches and it remains in and out of centre. The hotel and public house • The tightening of mortgage finance
questionable as to whether or not secondary and sectors also remain active. under new ‘affordability testing’
tertiary locations will recover. Alternative uses regulations.
may be the best solution for these locations. • The year also saw a limited but welcome expansion
by several well-established regional multiples. • A significant increase in the
availability of residential development
opportunities, as vendors return to the
market following a buoyant Q1 and Q2.
Investment John Benson T 0117 317 1100 E jbenson@alderking.com • Some developers, having bought
aggressively over the last twelve
months, have now established a
value of investment transactions £ms deliverable ‘pipeline’ and are becoming
much more selective.
600 • A number of developers are currently
at ‘capacity’ delivering the sites they
557.4
500
have secured and may not have the
400 time.
• Residual site values are driven most
300
strongly by two factors: changes in gross
development value and build costs. Whilst
209
200
we have seen rises in sales values, we
190
76.5
71.5
52.3
26.37
have also seen a significant inflation in
31.35
14.05
17.02
100
13.25
97.9
building costs, coupled with developer
0 concern that the major construction
project at Hinkley Point could result in a
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further ‘pressure’ on the labour market
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across a number of trades.
investment market summary
• Despite recent ‘softening’ of the
• 2014 was a positive and encouraging year for • 2014 finished strongly and we fully expect
residential land market in Q3 and Q4, two
the UK commercial property market, with IPD this momentum to carry into 2015 with
key underlying demand factors remain
total returns rising above 20% and capital values strong competition for the limited attractive
strong. Firstly the long term under-
increasing by 11.6%. opportunities across all sectors. Risk appetite
supply of housing in the South West and
• Confidence was evident across all sectors and has already increased and is set to increase
secondly, the Bank of England’s recent
the level of investment volumes for January to further as concern grows over missing the next
commitment to keep the base rate at
November was £47.7 bn compared to £42.0 bn market cycle.
its historic 0.5% low for ‘some time’ will
for the same period of 2013. Investor appetite has • The South West and South Wales region and provide stability and comfort to mortgage
been strong and competitive bidding situations its principal centres are performing well in a lenders and house buyers alike.
have occurred for prime and good secondary UK context, fuelling investment interest and
• Demand for land and property suitable for
properties. providing attractive comparative investment
student, retirement and care home uses
• The commercial investment market in the returns. This is further supported by clear
remains strong.
regions was strong throughout the year with high evidence of a strong return of occupier demand,
demand for prime properties and good levels of real rental growth and limited new supply.
demand for secondary properties. Investment Structural change in some sectors needs to be
activity outside London continues to grow navigated with care and whilst the UK General
as strong demand and stiff competition lead Election in May will generate much debate, it
investors to search for better value. should not derail the new levels of confidence.
www.alderking.com 4Bath 1
Offices Simon Price T 0117 317 1084 E sprice@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
150 600 40
125 500
30
100 400
92 90
(8.5) (8) 350 360
75 82 300
(33) (33) 20
(226) 21
(226) 21
(226) 21
305
(215.27) 20
(8)
(199.13) 18.5
68 65 (28)
50 (6) (6) 200 240
(22)
10
25 100
145
(13)
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
city centre
demand supply headline rent
• Occupier demand continued its strong • Total availability within the city centre reduced • The lack of available new Grade A specification
performance of recent years. Further take-up further in 2014. The last two remaining Grade A accommodation has had the effect of holding
is now being restricted by the lack of available suites at the SouthGate development let during back rental growth at the top end of the market
accommodation in the market. the second half of the year, leaving no available over recent years.
• Major deals in 2014 included the acquisition of brand new Grade A supply. • In the short term this will continue to be the
10,000 sq ft (929 sq m) at Cambridge House • Supply has also been impacted by the loss of a case due to the lack of supply, but at 20 Manvers
by Maplecroft, 8,523 sq ft (792 sq m) at 29/30 number of existing buildings to alternative uses, Street, a comprehensive refurbishment of the
Monmouth Street by Shift Active Media and most commonly hotels, student and private entire property comprising 45,660 sq ft
further expansion by British Maritime Technology residential. (4,242 sq m) is being offered at quoting rents
at The Square on Lower Bristol Road. • A small number of new developments are now up to £24 psf.
• Most activity continues to come from the TMT, being considered. Ediston Real Estate and Europa • The continuing reduction in availability has
service and professional services sectors, with a Capital have submitted a planning application resulted in reduced incentive levels being offered
number of serviced office operators also actively for a 113,000 sq ft (10,498 sq m) speculative to secure occupiers across all quality ranges.
seeking space in the city. development at 1 Pinesgate.
Industrial Andrew Ridler T 0117 317 1071 E aridler@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
30 100 10
25 85
25 80 8
(86) 8
(2.3) (8)
(81) 7.5
20
(75.34) 7
20 20 60 6
(67.28) 6.25
(2) (2)
(64.58) 6
15
15 50
(1.4) 40 (5) 4
10
30 30
7.5 20 (3) (3) 2
5 20
(0.7)
(2)
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• Good freehold owner occupier demand remains, • Supply is still limited to second-hand stock but • Headline rental levels have increased to £8 psf
albeit with limited opportunities. increased dramatically with the availability of the (£86.09 psm).
• The lack of good quality modern space is holding Herman Miller building which comprises circa
back take-up. 65,000 sq ft (6,038 sq m) and will appeal to a
number of existing Bath-based occupiers.
• There is increased interest in the city from trade
and roadside uses, as evidenced by Screwfix’s • No speculative industrial/distribution
acquisition of 6,000 sq ft (557 sq m) at Pines development has taken place in Bath.
Way. • Notwithstanding the increase in supply, there is
still a negligible amount of good quality stock and
the shortage of modern space is set to continue.
Key sq ft (sq m)
5 Alder King Market Monitor 20151. SouthGate Centre.
Courtesy of SouthGate Limited Partnership.
2. ScrewFix, Pines Way Industrial Estate, Bath.
Courtesy of ScrewFix.
3. The Vaults, Bath.
2 2
3 Courtesy of Queensberry Real Estate.
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E crussell-smith@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
300 60 60
250 50 50
(2,690.88) 250
(2,421.90) 225
(2,421.90) 225
200 40 40
(430.54) 40
(430.54) 40
(2,153) 200
(2,153) 200
(376.72) 35
(376.72) 35
(376.72) 35
(376.72) 35
150 30 30
(334.45) 32
(322.91) 30
(323) 30
(323) 30
(96.87) 9
(96.87) 9
(96.87) 9
100 20 20
(151) 14
(151) 14
(150.69) 14
(139.93) 13
(139.93) 13
(118) 11
(118) 11
50 10 10
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• Bath continues to attract major new retailers to • The future of the former Bath Press site remains • 2014 saw the opening of many new brands
its central core. In 2014 Anthropologie opened in uncertain. Tesco is currently reassessing its including Cowshed in the Paragon, Turtle Bay in
New Bond Street and Primark in Stall Street. options for redevelopment of the site. New Bridge Street, Grillstock at the Vaults and
• Convenience stores continue to thrive. Morrisons • The long awaited Lidl store on Lower Bristol Road Cau in Milsom Place.
has opened its third store in Widcombe Hill and is currently under construction and due to open • Two new restaurant opportunities are being
Tesco, its eighth store in Southgate Street. early in 2015. marketed on Grand Parade by Bath City Council.
• Deeley Freed’s plans at Saw Close are
progressing. Occupiers include a casino operated
by Group Partouche and Z Hotels.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
Oli Stretton T 0117 317 1121 E ostretton@alderking.com
value of investment transactions £ms prime yields % investment by sector
175 8
150
7
125
28% industrial
123.98
6
100 retail high street
72%
75
5
industrial
50
office
37.57 4
25 retail high street
25 22.5
13.25 retail out of town
0 3
2010 2011 2012 2013 2014 2010 2011 2012 2012 2014
value of investment transactions prime yields investment by sector
• The total value of investment transactions in • Our current view of prime yields is as follows: • Looking at the high street retail sector which
Bath for 2014 is £13.25m. This is significantly - Industrial 6% dominated the 2014 investment value total, 23-
lower than the 2013 figure at £123.98m. However, 26 Union Street sold to CBRE Global Investors
the 2013 level was the highest level in the last - Office 6% from Salix Trust for £8.9m, 5.20% NIY. The unit,
six years and a considerable proportion of this - Retail high street 4.5% located in a prime retail location on Union Street,
(£101m) was from one transaction, a 50% share - Retail out of town 5.25% is let to Banana Republic on a 10 year lease from
in the SouthGate retail centre. The average total 2010 with a 5 year break option. 11 Argyle Street,
transaction value from 2010 to 2014 is £44.5m. let to Phase Eight until 2023, sold to a property
company for £650,000, 6.10% NIY.
• In the industrial sector, Europa Capital Partners
and St Congar Land purchased the Bitton Paper
Mill site in a JV for £3.7m. The site totals 17 acres
and is not occupied.
www.alderking.com 6Bridgwater 1
Offices Andrew Maynard T 01823 444879 E amaynard@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
80 60 20
55
50 (5)
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
60 65 15
(6)
(159) 14.75
40
40 30 10
(86) 8
20
20 5
10
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
town centre out of town
demand supply headline rent
• While improved demand and transaction levels • The construction of a new Innovation Centre at • Rents remained at similar levels throughout 2014,
at the end of 2013 rolled over into Q1 of 2014, Woodlands Business Park will increase supply although smaller suites attracted a premium.
enquiries for the remainder of the year were significantly in May/June 2015 and is likely to • It is likely that rents will improve in 2015,
typically for smaller space save a few larger and capture demand from Hinkley Point C supply especially for good quality accommodation
yet to be satisfied requirements. chain companies, should the main construction located close to the M5.
• Requirements tend to focus on proximity to project commence in the year.
the M5 at junctions 23 or 24 and good quality • There is little availability of accommodation
accommodation with a mixture of open plan and above 5,000 sq ft (464.5 sq m) within the town,
compartmental accommodation. due to the nature of the market historically.
• 2014 saw the opening of Avon & Somerset
Police’s new operational centre and police station
on Express Park.
Industrial Andrew Maynard T 01823 444879 E amaynard@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
300 500 12
250 10
400
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
225 239
200 (22) 365 8
(21) (34)
300
(81) 7.5
150 6
200
100 4
100
50 2
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• There has been sustained growth in levels of • New build has increasingly been a solution to • Rents were relatively stable throughout 2014 and
demand throughout the year. the under-supply of existing premises within the indeed there were early signs of rental growth in
• Hinkley Point C is yet to have a dramatic effect town. Q4 2014.
on levels of take-up, although enquiry levels • The paucity in supply is particularly evident for • With further new build likely in 2015, there is the
started to rise in the final quarter of 2014. premises of 20,000 to 50,000 sq ft (1,858 to strong prospect of headline levels increasing.
• Demand is polarised with good demand for sub 4,645 sq m), although arguably under-supply • Rents for secondary accommodation will also
5,000 sq ft (464.5 sq m) and also for over is evident across all sizes, especially for good improve in 2015 if the imbalance between
20,000 sq ft (1,858 sq m). quality space. This position will remain and demand and supply is exacerbated by demand
undoubtedly worsen if and when levels of demand from Hinkley Point C supply chain companies.
• Significant lettings include GeoPost’s acquisition from Hinkley Point C materialise in 2015.
of 36,500 sq ft (3,391 sq m) at Woodlands
Business Park.
Key sq ft (sq m)
7 Alder King Market Monitor 20151. GeoPost, Woodlands Business Park, Bridgwater.
2. Bridgwater Hospital, Bridgwater.
3. CGI of the Low Carbon Energy Innovation &
2 3 Collaboration Centre, Woodlands Business Park.
Retail & Leisure Andrew Maynard T 01823 444879 E amaynard@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
60 30 20
50 25
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
Not previously reported
15
(161) 15
40 20
(430) 40
(129) 12
(183) 17
30 15 10
(86) 8
20 10
5
10 5
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• After a successful first half of the year, demand • There is active demand from a number of • Due primarily to the prospect of Hinkley Point C,
dipped in the 3rd and 4th quarters and the discount chains together with some convenience there is increasing interest in the town from hotel
vacancy rate rose to almost 15% by the end of format supermarkets. operators. Construction of an 80 bedroom 4 star
2014. • There was little activity during 2014 after several hotel on Eastover, which received a £4.5m cash
• The Local Authority has commenced work to new store openings in 2013. boost from the Growing Places Fund, is due to
improve the Eastover area as part of its long term commence imminently.
vision for the town centre. • A3/A4 demand will increase in the town during
• Larger format units have been more popular and 2015/16 as more land is brought online and the
the former Argos store in Binford Place has finally town’s population grows.
been let following closure back in 2009.
• Zone A rents have changed little in the prime and
secondary areas.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
Andrew Maynard T 01823 444879 E amaynard@alderking.com
value of investment transactions £ms prime yields % investment by sector
50 9
5%
40 8
Not previously reported
Not previously reported
Not previously reported
Not previously reported
30 7
office
31.35
retail out of town
20 6 95%
industrial
office
10 5
retail high street
retail out of town
0 4
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
value of investment transactions prime yields investment by sector
• The value of investment transactions in 2014 • Our current view of prime yields is as follows: • The largest deal in the out of town retail sector
was £31.35m, with the majority being in the - Industrial 6.75% was LIM’s purchase of Bridgwater Retail Park in
retail warehouse sector. May 2014 from Cornerstone Real Estate.
- Office 7% The 112,600 sq ft (10,461 sq m) park is multi-let
- Retail high street 6.5% to Next, Wickes, Argos, Pets at Home and Lidl.
- Retail out of town 6% It sold for £26.13m, 5.90% NIY.
• Metric Income Plus purchased The Range, Bristol
Road for £3.67m, 6.8% NIY. The 33,715 sq ft (3,132
sq m) new unit is let to The Range for
20 years from February 2013.
• In the office sector, Kingcastle Limited purchased
Royal Clarence House, High Street, a multi-let
office totalling 14,350 sq ft (1,333 sq m) for
£1.55m, £108 capital value psf.
www.alderking.com 8Bristol 1
Offices Simon Price T 0117 317 1084 E sprice@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
1,600 4,000 30
(307) 28.5
(296) 27.5
(296) 27.5
(296) 27.5
(296) 27.5
1,400 3,500
25
1,200 1,250 3,000
(116)
(231) 21.5
(231) 21.5
(231) 21.5
20
(226.03) 21
(226.03) 21
1,000 2,500 2,650 2,550
2,350 (246) (237) 2,380
800 860 2,000
(218) (221) 15
(80) 700 735
600 658 (68) 1,500 1,650
(65) 10
(61) (153)
400 1,000
5
200 500
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
city centre out of town
demand supply headline rent
• Occupier demand gathered momentum during • In the city centre, less than 200,000 sq ft • The letting in October 2014 during construction
the year with the end of year total the highest (18,580 sq m) of new Grade A space is at 2 Glass Wharf to PwC set a new record rent
level since 2007. Both city centre and out of town immediately available, with less than 10,000 sq ft in Bristol for Grade A accommodation. This was
markets performed significantly ahead of the five (929 sq m) available in North Bristol. followed by the pre-let in December 2014 to
year average. • Two new speculative Grade A developments - KPMG.
• Notable deals in 2014 included the acquisition Salmon Harvester/NFUM’s 2 Glass Wharf and • The increased level of take-up of Grade B space
of 28,276 sq ft (2,627 sq m) by PwC at 2 Glass Skanska’s 66 Queen Square - will complete in has resulted in rental growth in a number of size
Wharf, KPMG’s acquisition of 52,000 sq ft January and June 2015 and have already ranges during the year, as a result of reducing
(4,831 sq m) at 66 Queen Square and in North secured lettings. supply.
Bristol, TSB’s acquisition of 63,858 sq ft • There has been a sharp reduction in the • The level of proposed conversion, as a result of
(5,933 sq m) at Key Point, Almondsbury. availability of Grade B space. Approximately Permitted Development Rights, has significantly
• The most active sectors continue to be financial 1m sq ft (92,902 sq m) of city centre space has reduced supply at the budget end of the market,
and professional services and the energy and been identified for conversion to residential via where rental growth is also now evident.
TMT sectors. Permitted Development Rights.
Industrial Andrew Ridler T 0117 317 1071 E aridler@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
3,500 7,000 8
(83) 7.75
(80.73) 7.5
(80.73) 7.5
(80.73) 7.5
(81) 7.5
3,000 6,000 7
6
2,500 5,000
2,400 2,400 2,325 2,400 4,500 4,500 5
2,000 (223) (223) 2,200 (223) 4,000
(216) (418) (418)
(204) 3,750 4
1,500 3,000 (348)
3
2,750
1,000 2,000 (255) 2
1,750
500 1,000 (163) 1
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• There has been a return of mid-range • There is a negligible amount of good quality stock • There is no new space immediately available
requirements in the 15,000 – 75,000 sq ft and shortages of modern space are impacting on and we anticipate that rentals of circa £7.75 - £8
(1,394 – 6,968 sq m) size range with limited take-up. psf (£83.40 - £86 psm) could be achieved for
availability triggering design build activity. • The city’s first speculative industrial/distribution accommodation below 10,000 sq ft (929 sq m).
• Significant deals include The Range’s leasehold development comprising five units totalling • Rents for modern and mid-range buildings remain
acquisition of the 385,000 sq ft (35,768 sq m) 15,000 sq ft (1,394 sq m) is close to completion at at £6.50 psf (£70 psm). Good quality second-
former Morrisons RDC at Cribbs Causeway and Caxton Business Park with four buildings pre-sold. hand buildings are commanding rents of around
Farm Foods’ new build acquisition of 175,000 sq ft • The city could support further speculative £4.75 - £5.75 psf (£51.11 - £61.88 psm).
(16,258 sq m) at Central Park, Avonmouth. development, particularly providing buildings in • With the reduced levels of good quality available
• There is increased demand from owner occupiers the 1,000 - 3,000 sq ft (93 - 279 sq m) and stock, rental incentives for prime space have
for freehold space with limited opportunities. 25 - 100,000 sq ft (2,322 – 9,290 sq m) size reduced with lease durations extending.
ranges.
Key sq ft (sq m)
9 Alder King Market Monitor 20151. 66 Queen Square, Bristol.
Courtesy of Skanska UK.
2. 2 Glass Wharf, Bristol.
Courtesy of Salmon Harvester/NFUM.
2. Caxton Business Park, Warmley.
2 3 Courtesy of Axten and Blue Marble Properties.
Retail & Leisure Charles Russell-Smith T 0117 317 1043 E crussell-smith@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
350 50 50
300
(484.36) 45
(3,336.69) 310
(3,229.20) 300
(3,229.20) 300
(3,229) 300
(3,229) 300
40 40
250 (430.54) 40
(376.72) 35
30 30
200
(323) 30
(323) 30
(322.91) 30
(322.91) 30
(322.91) 30
(323) 30
(323) 30
(2,152.70) 200
(2,152.70) 200
(2,152.70) 200
(2,153) 200
(2,152.70) 200
(1,991.25) 185
(1,883.70) 180
(1,883.70) 175
(1,884) 174
(1,830) 170
150
20 20
100
(161.45) 15
(161.45) 15
(161.45) 15
(161) 15
(161) 15
(139.93) 13
(139.93) 13
(129.16) 12
(129) 12
(129) 12
10 10
50
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Broadmead The Mall Cabot Circus cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• Throughout the year, voids have continued to • Sainsbury’s has opened a new food store in • New restaurant openings include Wagamamas
reduce in both the city centre and The Mall at Portishead. and Five Guys in Cabot Circus, Cau and Byron on
Cribbs Causeway. • Waitrose now trade the former Co-op site in Queens Road and Rosemarinos in the city centre.
• New openings include Pull and Bear and Lloyds Broadmead Lane, Keynsham. • The redevelopment of Ashton Gate has started
Bank at Cabot Circus, Sainsbury’s Local, Bakers • Discounter activity remains strong. Aldi with the demolition of the Wedlock Stand. Due
Dolphin, Ecco and Poundland in Broadmead and has opened in Longwell Green and Lidl has for completion in 2017, the stadium will provide
Joules, Superdry, Jack Wills, Lakeland and Bose announced proposals for a new store in Horfield. 27,000 seats, conference facilities and an hotel.
at The Mall. • Bristol City Council is progressing plans for a
• THAT Group and Acorn are progressing plans for new 12,000 seat Arena close to Temple Meads
a new mixed use development in Clifton Village to station. SMG and Live Nation have been named as
include shops, restaurants and apartments. preferred operators. The Arena is due to open in
2017.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
Oli Stretton T 0117 317 1121 E ostretton@alderking.com
value of investment transactions £ms prime yields % investment by sector
700 8
600
7 8%
industrial
557.4
500
492
6 24% office
400
54% retail out of town
349
300
other
319
5
industrial
14%
200
office
4
155.19
100 retail high street
retail out of town
0 3
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
value of investment transactions prime yields investment by sector
• The total value of investment transactions in • Our current view of prime yields is as follows: • 54% of the total value of investment transactions
Bristol in 2014 was £557.4m. This is an increase of - Industrial 5.75% in Bristol is made up by the sale of a 50% stake
circa 75% on the 2013 total of £319m. in Cabot Circus. This stake in the 1.3m sq ft
The Bristol five year investment value average - Office 5.75% (120,774 sq m) central Bristol shopping centre
is £374m. - Retail high street 4.5% sold for £267.8m, 6.30% NIY to Aviva.
- Retail out of town 5% • The largest office deal was The Paragon, Victoria
Street purchased by Lothbury for £29.5m, 5.93%
NIY. This 75,000 sq ft (6,968 sq m) office is
multi-let to tenants including EY and Mercer.
• The most significant deal in the retail warehouse
sector was the purchase of Centaurus Retail Park
by NFU Mutual. This 81,000 sq ft (7,525 sq m)
multi-let retail warehouse park sold for £47.1m,
5.53% NIY.
www.alderking.com 10Cardiff 1
Offices Owen Young T 029 2038 1996 E oyoung@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
700 1,600 25
600 639 1,400
(236.81) 22
(237) 22
(237) 22
(59) 20
(226.03) 21
(215.27) 20
1,200
500 531 1,200 1,200
(49) 1,000 (111) (111) 1,100
437 (102) 1,000 1,000 15
400
(150.69) 14
(41) 380 800 (93) (93)
(139.93) 13
(139.93) 13
(35)
(129) 12
(129) 12
300
300 600 10
200
(28)
400
5
100 200
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
city centre out of town
demand supply headline rent
• Take-up has remained healthy and constant • Supply has remained constant, again comprising • Headline rent is maintained in the city centre
throughout each quarter and has resulted in a mainly secondary stock. Grade A stock is but is expected to grow to facilitate new Grade
24% increase on the five year average of 427,000 extremely low, with less than 30,000 sq ft A office development, particularly at Rightacres
sq ft (39,669 sq m). (2,788 sq m) available in the city centre. Central Square where Blake Morgan has pre-let
• Out of town and business park demand improved • The take-up of space by student office 28,077 sq ft (2,608 sq m).
in 2014. conversions is likely to counteract the Admiral • Over 200,000 sq ft (18,581 sq m) of lettings in
• Deals below 5,000 sq ft (465 sq m) accounted for Insurance relocation, from various city centre out of town locations (excluding Cardiff Bay) have
30% of take-up, a marked comparison to 80% in locations, into its new 220,000 sq ft resulted in out of town headline rents remaining
2013. (20,439 sq m) building. constant.
• Notable deals included International • Over 300,000 sq ft (27,871 sq m) is forecast for • Incentives continue to tighten but we expect
Baccalaureate Organisation taking 48,500 sq ft construction over the next 15 months within substantial rent free periods will be offered on
(4,506 sq m) and SSE taking 46,851 (4,353 sq m) Cardiff’s ‘Financial Services’ City Enterprise Zone new Grade A developments to encourage rental
at Cardiff Gate Business Park. where JR Smart’s 80,000 sq ft (7,432 sq m) growth.
Capital Quarter 2 is currently under construction.
Industrial Owen Young T 029 2038 1996 E oyoung@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
1,000 2,000 7
1,986
(184) 1,894
(176) 6
800
1,500 5.5
763 5
1,467 (59.20) 5 5 5 5
631 (71) (136)
600 1,368 (53.82) (53.82) (54) (54)
(59) 4
(127)
516 518 572 1,000 1,094
400 (48) (48) (53) (102) 3
2
500
200
1
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• Demand increased slightly from last year and • Supply has reached its lowest level in six years in • Headline rents have remained unchanged at
includes Pinewood Studio’s move to the 177,000 line with increased demand. £5 psf (£53.82 psm).
sq ft (16,444 sq m) building formerly occupied by • Many transactions have been freehold • Incentives are still very much in place for
G24i. contributing to levels of supply in this sector secondary stock while prime space incentives are
• The year showed no slowdown in the market decreasing for the sixth successive year. hardening and lease durations lengthening.
for deals below 10,000 sq ft (929 sq m) with • Supply levels are expected to decline further
transactions of this size accounting for 80% of all as a result of continued limited speculative
demand. development and the reducing levels of quality
• Capital Business Park as well as the southern stock coming to the market.
part of Cardiff, will be enhanced with the
construction of the Eastern Bay Link Road
commencing in 2015.
Key sq ft (sq m)
11 Alder King Market Monitor 20151. Central Square, Cardiff Masterplan.
Courtesy of Rightacres Property Co Ltd.
2. Caradog House, Cardiff.
2 3 3. Castle Arcade, Cardiff.
Retail & Leisure Owen Young T 029 2038 1996 E oyoung@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
300 40 50
35
250
40
(2,690.88) 250
(431) 40
(431) 40
30
(2,475) 230
(322.91) 30
(322.91) 30
(322.91) 30
(323) 30
(323) 30
(2,422) 225
(2,422) 225
(2,422) 225
200
25 30
(322.91) 30
(322.91) 30
(322.91) 30
150 20
(118.40) 11
15 20
100
(139.93) 13
(139.93) 13
(139.93) 13
(140) 13
(140) 13
(107.64) 12
(107.64) 12
10
(118) 11
(118) 11
10
50
5
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• Headline rents have reduced slightly but should • Activity remains quiet and is still dominated by • There has been a high level of activity in the
remain stable with continued lettings in St David’s demand for convenience stores. restaurant and A3 sector with multiple lettings to
II to Blott, Tiger Stores, Mac, Other UK and Castle • There are plans for the former Comet on Newport good covenants across the city, most notably in
Fine Art. Road to become a discount food store. The Hayes area. New occupiers include Wahaca,
• Queen Street remains popular with a new Primark Burger & Lobster which are both adjacent to the
store at the former BHS and a new Matalan in the new Miller & Carter restaurant. Rick Stein also has
former Primark. a requirement in Cardiff.
• Moorfield Group (Moorfield) and Plus Shops
Retail have agreed to take a 25 year lease from
Premiere Cinemas to re-open the five-screen
cinema at Cardiff’s Capitol Shopping Centre.
The £1m refurbishment is well underway.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
James Nicholas T 029 2038 1994 E jnicholas@alderking.com
value of investment transactions £ms prime yields % investment by sector
210 8 2%
204.36 209
180
7
150 18%
industrial
120 129.6 6 34%
131.33
office
90
5 37% retail high street
industrial
78.43
60 9% retail out of town
office
4
30 retail high street other
retail out of town
0 3
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
value of investment transactions prime yields investment by sector
• The total volume of investment transactions in • Our current view of prime yields is as follows: • The multi-let Capital Shopping Park was purchased
Cardiff increased by 59% on the 2013 figures, - Industrial 6.5% by ReAssure Ltd for £59.6m, 5.20% NIY.
rising from £131.33m to £209m. • In the high street retail sector, 10 The Hayes was
- Office 6.25%
purchased by Henderson UK PUT for £14.8m,
- Retail high street 4.75% 5.75%. The unit is let to TX Maxx for a further
- Retail out of town 5% 7 years.
• The largest transaction in the office sector was
the sale of Cricklewood House for £40.5m, 5.36%
NIY. This circa 100,000 sq ft (929 sq m) office
building is let to the National Assembly of Wales.
• The Castle Quarter Portfolio, a collection of
listed Victorian retail arcades with associated
office, residential and leisure uses totalling
125,000 sq ft, was purchased by Mansford
Real Estate for £21.375m, 7.65% NIY.
www.alderking.com 12Exeter 1
Offices
Noel Stevens T 01392 353093 E nstevens@alderking.com
Ralph Collison T 01392 353091 E rcollison@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
200 450 18
(188) 17.5
(188) 17.5
175 400 410 16
(177.60) 16.5
(177.60) 16.5
(177.60) 16.5
(177.60) 16.5
(177.60) 16.5
(177.60) 16.5
(178) 16.5
(167) 15.5
350 (38) 14
150 350
150 150 325
140 135 300 (33) 12
125 (14) (14) 310 (30)
(13) (12)
250 (28.8) 10
100
100 200 8
215
75 (9)
150 (20) 6
50
100 4
25 50 2
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
city centre out of town
demand supply headline rent
• There is strong demand for smaller suites in the • There is continued pressure on secondary stock • The letting to Blur Group at £17.50 psf (£188 psm)
city centre with clients breaking up floor plates for redevelopment for alternative uses such as in 2013 has yet to be beaten.
to satisfy demand, Atrium and The Senate being student housing or residential. • New build offices are now being priced at £18 psf
prime examples. • There has been no new build during the (£194 psm) leasehold and £235 psf (£2,530 psm)
• There is a trend towards owner occupiers seeking downturn, severely limiting Grade A availability. freehold. We expect these prices to rise to keep
5,000 sq ft (465 sq m) stand-alone freeholds. • We predict a continued lack of supply of modern pace with construction cost inflation.
• Demand is not being met by standing stock and premises for the next three years whilst the • Values for secondary stock are also rising due to
high profile occupiers are struggling to find development pipeline catches up. the lack of supply and comparative cost of new
suitable space. build.
Industrial
Noel Stevens T 01392 353093 E nstevens@alderking.com
Ralph Collison T 01392 353091 E rcollison@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
800 500 8
(86) 8
700 7
(75.34) 7
400
600 6
(67.27) 6.25
600 390
(64.58) 6
(64.58) 6
(56) (36)
500 300 5
305 300 300
400 (28) (28) (28) 4
250
300 330 200 (23) 3
310 310
(31)
(29) (29)
200 2
200 100
100 (19) 1
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• The industrial sector is the strongest in Exeter • Supply has seen a considerable decrease to its • £8 psf (£86 psm) has been achieved for new
with good demand particularly from internet 2009 level. Limited development since 2007 build premises in Exeter but £7.50 psf is likely
fulfilment companies. means occupiers are forced to take to remain as the headline rent for institutional
• Occupiers are focussing on transport links and older buildings. specification premises.
broadband capacity when selecting premises. • Construction of 40,000 sq ft (3,716 sq m) of new • Land values continue to rise with £460,000 per
• We continue to see strong demand for car space will begin at Hill Barton in 2015 where acre being paid in Sowton and land at Matford
showrooms at Matford Green Business Park with pre–lets are agreed. Green being offered at £600,000 plus per acre.
Toyota/Lexus buying two acres to relocate from • The availability of existing buildings above
their existing premises. 10,000 sq ft (929 sq m) is extremely limited with
demand unsatisfied.
Key sq ft (sq m)
13 Alder King Market Monitor 20151. Sandy Park, Exeter
2. CGI of Alphington Retail Park, Exeter
2 3 3. The Senate, Exeter
Retail & Leisure Lee Southan T 01392 353090 E lsouthan@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
250 30 50
(323) 30
(301) 28
25
200 40
(269.09) 25
(269.09) 25
(2,152.70) 200
(2,152.70) 200
(2,152.70) 200
(2,153) 200
(2,153) 200
(430.54) 40
(431) 40
(431) 40
(247.56) 23
20
150 30
(296) 27.5
15
100 20
10
(182.99) 17
(182.99) 17
(183) 17
(183) 17
(118.40) 12
(118.40) 11
(108) 10
(86.11) 8
(86.11) 8
(86.11) 8
50 10
(86) 8
5
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
High St. cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• Demand from celebrity chefs continues to boost • The final letting to Dreams completes the line • Work has started at the Intercounty site with
Exeter’s profile. Jamie Oliver has confirmed it will up at Alphington Retail Park which strengthens Frankie & Benny’s, Chiquito and KFC confirmed at
open a Jamie’s Italian in Princesshay. the appeal of Alphington as an out of town retail headline rents of £38 psf (£409 psm).
• The Princesshay development remains strong destination. • The St Austell Brewery’s redevelopment of former
with limited availability. The planned mixed use • Secondary retail locations have performed very bonded warehousing has further enhanced
development of the neighbouring bus station site well in some cases. The St Thomas Centre saw Exeter’s Quayside.
will boost footfall to the city centre. a record rent agreed of £55.00 psf (£592 psm) • The continued expansion and addition of
although this isn’t representative of the wider conference facilities at Exeter Chiefs’ home
market. There has been unprecedented demand ground at Sandy Park are welcome improvements.
from bookmakers and takeaways in locations with
good parking.
• The IKEA effect has yet to be felt as construction
has not yet begun but a large increase in visitor
numbers is expected.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
Scott Rossiter T 01392 353089 E srossiter@alderking.com
value of investment transactions £ms prime yields % investment by sector
250 8 3%
5%
200 7 4%
190
150 6
office
88% retail high street
100 5 retail out of town
industrial
82.03 other
office
50 63.36 52.85 4
40.42 retail high street
retail out of town
0 3
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
value of investment transactions prime yields investment by sector
• The total volume of investment activity in 2014 • Our current view of prime yields is as follows: • The largest transaction of the year was
was £190m, compared to just over £50m in 2014. - Industrial 6.25% Henderson’s purchase of a 50% stake of the
• The average value over the past five years is Princesshay Shopping Centre for £127.9m.
- Office 6.25%
£85.7m. • In the retail warehouse sector, Aberdeen Asset
- Retail high street 4.5% Management purchased a circa 30,000 sq ft
• 33% of the total is made up by one transaction,
the 50% sale of the Princesshay Shopping Centre - Retail out of town 5.25% (2,787 sq m) asset on Sowton Retail Park, let
for £127.9m, 5.6% NIY. to Dunelm and Furniture Village for an average
unexpired term of 11.25 years. The purchase price
was £6.88m, 6.25% NIY
• In the office sector, Clarendon House, Western
Way was purchased for £3.7m, 7.60% NIY. The
office is let to the Ministry of Public Buildings with
19 years unexpired.
www.alderking.com 14Gloucester 1
Offices Adrian Rowley T 01452 627133 E arowley@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
225 400 30
200 350
200 25
175 (19) 300
150 20
150 250
(14) 250
(199) 18.5
125
(188.36) 17.5
(188.36) 17.5
(188.36) 17.5
(188.36) 17.5
120 200 (23) 15
100 (11) 200
100 95 150 (19)
75 (9) (9) 150 150 10
(123.78) 11.5
(123.78) 11.5
(123.78) 11.5
(123.78) 11.5
(123.78) 11.5
100 (14) 120 (14)
50
(11) 5
25 50
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
city centre out of town
demand supply headline rent
• Take-up during the year totalled 150,000 sq ft • Supply remains at exceptionally low levels. • The headline rent for out of town space has
(13,935 sq m), up 25% on the previous year’s • This shortage of supply is present in both prime increased to £18.50 psf (£199.14 psm).
demand. and secondary sectors. • The headline rent for town centre space has
• The largest and most significant transaction • There is now a distinct absence of space over remained constant at £11.50 psf (£123.79 psm).
comprised the pre-let of 1420 Gloucester Business 5,000 sq ft (464 sq m) and of larger single floor
Park to Horizon Nuclear Power Services which plate options.
will provide 52,000 sq ft (4,831 sq m) with the
capability to expand to 67,000 sq ft (6,225 sq m).
• Demand remains focused on well-located Grade A
space.
Industrial Adrian Rowley T 01452 627133 E arowley@alderking.com
demand 000s sq ft supply 000s sq ft headline rent £psf
700 1,200 7
600 1,000 6
(64.58) 6
(64.58) 6
(64.58) 6
(65) 6
(65) 6
500 5
800
400 4
400 400 600 625
300
(37) (37) (30) 3
300 300
(28) 275 (28) 400 450
200 (26) (42) 2
350
200 (33) 275 250
100 (26) 1
(23)
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
demand supply headline rent
• Take-up during 2014 totalled 400,000 sq ft • Supply has dropped to 250,000 sq ft • The headline rent has remained constant at £6
(37,160 sq m). (23,225 sq m). psf (£64.59 psm).
• The figure represents a substantial increase over • This is the lowest level experienced over the • There continues to be an upward pressure
recent years and equals the five year high. last five years and comprises predominantly on rents due to the shortage of stock and
• Significant transactions include the pre-sale of a secondary stock. the predicted increase in design and build
35,000 sq ft (3,252 sq m) manufacturing building • Two new speculative Grade A buildings have been development activity.
at Quedgeley West to Vision Profiles and a total completed comprising a building of 28,000 sq ft
of 164,000 sq ft (15,236 sq m) in two lettings at (2,601 sq m) at Quedgeley West and a building
Barnwood Point. of 22,000 sq ft (2,044 sq m) at Waterwells
Business Park.
Key sq ft (sq m)
15 Alder King Market Monitor 20151. Porsche dealership, Tewkesbury.
2. Tewkesbury Trade Park.
3. Gloucester Quays.
2 3 Courtesy of Peel.
Retail & Leisure John Hawkins T 01452 627135 E jhawkins@alderking.com
zone A headline rent £psf out of town rent £psf leisure headline rent £psf
175 25 35
(269.09) 25
(269.09) 25
(269) 25
(269) 25
150 30
(344.45) 32
(344.45) 32
(344) 32
(344) 32
(236.80) 22
20
125 25
(1,291.62) 120
(1,291.62) 120
15
100 20
(1,076.40) 100
(1,076.40) 100
(1,076.40) 100
(1,076.40) 100
(1,076) 100
(1,076) 100
(1,076) 100
(1,076) 100
75 15
10
(161.45) 15
50 10
(129.16) 12
(129.16) 12
(129.16) 12
(129) 12
(129) 12
(107.64) 10
(96.88) 9
(96.88) 9
(97) 9
(97) 9
5
25 5
0 0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Eastgate St. Kings Walk cinema health & fitness A3/A4
zone A headline rent out of town rent leisure headline rent
• The opening of TK Maxx within the covered • The new Morrisons store and petrol filling station • The Gloucester Quays has experienced a
Eastgate Street remains imminent and will has fuelled further demand within the out of town significant uplift in demand and customer footfall,
provide a welcome boost to the city centre. market and a Costa Coffee drive-thru will be the mainly as a result of the opening of the Cineworld
• The Stanhope redevelopment of Kings Square first to take occupation alongside Morrisons. 10 screen cinema which has given the Docks
and the bus station continues to take shape, and • A new McDonalds restaurant and drive-thru the ability the draw in many more customers at
will have a significant impact in rejuvenating the has recently opened at St Oswalds Park. Wren evenings and weekends.
city centre economy. Kitchens was the latest retailer to enter the Park, • The new cinema has provided the catalyst for the
• Demand generally across the four key gate taking half of the former Comet unit. arrival of new restaurants including Chimichanga,
streets of the city centre - Eastgate, Westgate, • At Whittle Square, Gloucester Business Park there Zizzi’s and Ed’s Easy Diner, which have further
Northgate and Southgate - is improving with the is just one remaining unit of 1,000 sq ft (93 sq m), enhanced the night-time economy of the city
number of empty units declining. following the arrival of Andrews Estate Agents centre.
and Barnardos who took occupation of a double • Within the health and fitness sector, the budget
unit. gym operators remain active and are keen to
acquire a limited supply of suitable properties.
Investment
John Benson T 0117 317 1100 E jbenson@alderking.com
Adrian Rowley T 01452 627133 E arowley@alderking.com
value of investment transactions £ms prime yields % investment by sector
105 8
97.9
90
7 14% 15%
75
industrial
7%
6
60 62.98 office
23%
57.2 retail high street
45
5
41.6 industrial 41% retail out of town
40.29
30
office other
4
15 retail high street
retail out of town
0 3
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
value of investment transactions prime yields investment by sector
• The volume of investment sales in Gloucester • Our current view of prime yields is as follows: • The largest investment transaction was Cordea
and Cheltenham increased significantly to £97.9m - Industrial 6.25% Savills’ purchase of Church Street, Bishops
in 2014. Cleeve, Cheltenham for £24m, 4.25% NIY.
- Office 6.5% The property is let to Tesco.
• The majority of transactions were carried out in
the retail sector. - Retail high street 6.5% • In the office sector, Aviva purchased The
- Retail out of town 5.75% Quadrangle for £8.13m, 7.64% NIY. The
Quadrangle is a mixed use property with retail
and restaurants on the ground floor and offices
on 1st to 4th floors.
• There were a few deals in the retail warehouse
sector including Eastern Avenue, Gloucester
which sold to NewRiver Retail for £4.25m, 8.30%
NIY. Tenants are Magnet and PC World with an
unexpired lease term of circa 8 years.
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