Croydon Offices - Savills
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
UK Commercial – June 2019
S P OT L I G H T
Savills Research
Croydon Offices
CGI Building 2, the next phase at Ruskin Square.
Key Statistics Occupational Overview Investment Overview Outlook
Croydon Offices - June 2019
Croydon is a core office market in Greater London & South
East. It has the sixth highest long-term average take-up
across all office centres in the wider market area.
CROYDON KEY STATISTICS Croydon Take-Up Take-up was 104% above 2017 and 4% above the long-
Data for deals and supply above 5,000 sq ft term average
Take-Up 400,000
Grade A Grade B Grade C
350,000
126,000 sq ft
Transacted across 8 deals in 2018 300,000
Supply 250,000
Sq Ft
222,000 sq ft 200,000
0% of the available space is classified as
grade A 150,000
Development Pipeline 100,000
40,000 sq ft 50,000
0
There is currently one scheme under
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
construction
Prime Rents Source Savills Research
£34.00 psf Occupational Overview
This rent was achieved at Renaissance
Croydon is undergoing extensive regeneration and has consistent
high levels of take-up
Key Occupational Deals There are a critical mass of local ten years. further 5,201 units in the pipeline
occupiers in Croydon who are for the next five years. Croydon
Clarion Housing Group loyal to the town. The discounted Another notable deal in 2018 has the 4th average lowest house
37,000 sq ft rents and fast transport links to was Green Network Energy who price when compared to other
Interchange Central London has also attracted leased 29,000 sq ft at Renaissance, London boroughs. Furthermore
footloose occupiers. they relocated from St Paul's in ,Westfield and Hammerson are
Green Network Energy the City, which is a theme that planning to deliver a new 1.5
29,000 sq ft Occupational demand remained has continued from previous million sq ft retail and leisure
Renaissance strong in Croydon in 2018 with years. EDF Energy (Victoria) centre which is set to begin
take-up reaching 126,000 sq ft. and Selection Services are other construction next year.
Sopra Steria This was over double the take- occupiers who have relocated from
up in 2017. There have been no Central London to open a new Prime rents in Croydon currently
13,000 sq ft
lettings above 5,000 sq ft in Q1 office in Croydon. stand at £34.00 per sq ft achieved
Bedford Point
2019. There were strong levels at Renaissance. We expect prime
of demand for grade A space The spike in take-up in 2016 was rents to remain relatively static in
Focal Ventures in Croydon in 2018 with both caused by the HMRC leasing the short term as there is no grade
13,000 sq ft Interchange and Renaissance 185,000 sq ft at Ruskin Square. A space available.
Stephenson House now fully let. Clarion Housing
and Markel leased the remaining Croydon is undergoing an The development pipeline is
Markel available space at Interchange extensive regeneration and the limited with 28 Dingwall Road
11,000 sq ft totalling a combined 48,000 town centre is evolving into an the only scheme currently being
Interchange sq ft. These were the only new amenity rich location. In the last redeveloped which will achieve
speculative developments ten years, 6,660 new residential practical completion in 2020 and
delivered to the market in the last units have been delivered with a will comprise 40,000 sq ft.
front cover
Savills are marketing Building 2 Ruskin
The rental growth the market is experiencing will be attractive for
Square (CGI image).This is the next phase
of the Ruskin Square development. investors seeking refurbishment and development opportunities.
savills.com/research 1Croydon Offices- June 2019
61% of the space transacted
in Croydon in 2018 was
classified as Grade A space.
61%
INVESTMENT OVERVIEW Croydon Supply Supply has fallen by 59% from 2015 levels
There have been no investment deals in
Q1 19. There were two office buildings
traded in Croydon in 2018 totalling
£29.34 million. The largest deal was
Rockspring Investment Managers 1,400,000 £40.00
buying Mott MacDonald House for Grade C Grade B Grade A Prime Rent
£23.18 million, which reflected a yield of £35.00
1,200,000
5.45%. The building comprises 64,000
sq ft and is fully let to Mott MacDonald.
£30.00
1,000,000
Croydon is an appealing market to
Prime Rents
investors as there are numerous £25.00
asset management opportunities to 800,000
Sq Ft
implement on existing secondary £20.00
quality stock. Furthermore ,the market
600,000
is experiencing a repricing with prime
£15.00
rents increasing by 45% in the last five
years from £23.50 per sq ft to £34.00 400,000
per sq ft. £10.00
200,000 £5.00
0 £0.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source Savills Research
What to expect from Croydon in 2019?
1upThe lack of available grade A
supply will impact on take-
volumes in 2019, therefore
London mainly occupiers
based near London Bridge and
Victoria who are attracted by the
deliver a speculative development
of any quantum in the short term.
Stanhope and Schroders have
we expect weaker take-up when discounted office rents available planning permission for a further 1
compared to 2018. There is, and the short train journey to East million sq ft.
however, a good quantity of grade Croydon.
B space available which caters for
demand from smaller and local
occupiers who are predominantly
seeking below 10,000 sq ft.
4 We expect a new rental tone
for Croydon will be set at 28
Dingwall Road where Mayfair
Capital are redeveloping the
2 The bulk of demand in 2019 is
expected to originate from the
existing base of professional and
existing building. It is anticipated
that the majority of the building
will be let prior to practical
financial services occupiers based completion at rents in the mid to
in Croydon. high £30's.
3There could be further
relocations from Central 5Ruskin Square is the only
scheme in the town which can
5.6% Office based employment is forecast to increase by 5.6% in Croydon in the
next five years
2Savills
We provide bespoke services for landowners, developers, occupiers and investors across the
lifecycle of residential, commercial or mixed-use projects. We add value by providing our clients
with research-backed advice and consultancy through our market-leading global research team
Greater London & South East Office Agency
Jon Gardiner Tom Mellows Andrew Willcock Piers Nickalls Rob Pearson
Head of National Office Director Director Director Associate Director
Agency 020 7409 8964 020 7299 8866 020 7409 8704 020 7299 3093
020 7409 8828 tmellows@savills.com awillcock@savills.com pnickalls@savills.com rpearson@savills.com
jgardiner@savills.com
Stuart Chambers Olivia Jones Steven Lang Simon Preece
Associate Surveyor Research Research
020 7075 8223 020 7409 8708 020 7409 8738 020 7409 8768
stuart.chambers@savills.com ojones@savills.com slang@savills.com spreece@savills.com
Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK,
continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative
purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has
been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form
is prohibited without written permission from Savills Research.You can also read
