2019 Market Monitor South West of England and - Alder King
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Market Monitor South West of England and South Wales Property Review 2019 Property intelligence you can build on
Contents
3 Key Market Trends 21 Gloucester Retail & Leisure and
Investment
5 Key Alder King Transactions
23 Bath
7 Bristol Office & Industrial
25 Bridgwater
9 Bristol Retail & Leisure and
Investment 27 Newport
11 Cardiff Office & Industrial 29 Plymouth
13 Cardiff Retail & Leisure and 31 Swindon
Investment
33 Taunton
15 Exeter Office & Industrial
35 Truro
17 Exeter Retail & Leisure and
37 Residential Development Land
Investment
38 Planning
19 Gloucester Office & Industrial
Alder King Market Monitor 2019
600 Aztec West, Bristol. Courtesy of Columbia Threadneedle.
Foreword SUMMARY
2018 was another year of robust activity across the primary
Market Monitor examines sectors of the commercial property market with continued
strong demand for residential land.
the occupational and
investment markets in Defying ongoing Brexit uncertainty, occupier and investor
demand remained consistent in the business space arena
11 key centres in the and the reduced level of take-up reported in some centres
South West of England was more a consequence of lack of quality supply rather
than any crisis of confidence.
and South Wales.
Although overall stock levels steadied across the region
in 2018, the supply of Grade A and secondary office and
Simon Price
industrial space is at a historic low. Despite this, the appetite
Head of Agency
Alder King for speculative development remains subdued, meaning
occupiers will need to be flexible regarding timing and
location and investors will continue to compete for the
limited opportunities in the year ahead.
The ongoing imbalance between supply and demand has
led to increased capital values and rental growth in Bristol,
Cardiff, Exeter, Gloucester and Swindon with further income-
led growth expected in 2019.
As highlighted in last year’s report, the retail sector
continues on a journey of structural change with significant
financial pressure being experienced by some occupiers
impacting on the sector and has further to run.
Predicting the 2019 market is of course particularly difficult.
It seems inevitable that the first quarter of 2019 will be
subdued as occupiers and investors pause to see how the
final phase of the Brexit Withdrawal Agreement negotiations
play out. However we remain optimistic that with the
prospect of greater certainty, the market will rally in the
second half of the year and we will see a strong level of
overall activity from occupiers and investors alike.
Key South West Centres
Office and Industrial Demand and Supply (000 sq ft)
Office Office Industrial Industrial
Year
Demand Supply Demand Supply
2018 1,880 2,319 3,880 4,816
2017 1,719 2,490 5,054 3,578
2016 2,023 2,724 8,427 3,694
2015 1,909 3,235 5,852 4,320
2014 2,207 3,862 4,969 5,695
Cardiff & Newport
Office and Industrial Demand and Supply (000 sq ft)
Alder King Market Monitor 2019
Office Office Industrial Industrial
Year
Demand Supply Demand Supply
2018 526 1,020 892 1,443
2017 768 1,073 1,111 957
2016 762 1,183 725 1,340
2015 748 1,209 1,008 1,459
2014 646 1,360 983 2,102
2
Offices demand Offices supply
000s sq ft 000s sq ft
1,000 800
931
725
710
675
750 600
500 400
Key Market
499
310
194
190
220
199
162
250 200
140
167
87.5
107
75
70
111
Trends
50
50
45
27
0 0
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OFFICE MARKET SUMMARY
Simon Price T 0117 317 1084 E sprice@alderking.com
There was an extremely low level of new build from conventional landlords. The serviced/ having a positive effect on the out of town
office development undertaken across the co-working sector has now developed into market where supply is reducing and headline
region in 2018, with speculative development one of the most active sectors for demand rents are now improving.
currently only underway in Bristol and Cardiff. across the region.
The public sector is increasingly active
Increased developer reluctance, at least in Some key regional centres witnessed strong and responsible for a number of the larger
the short term, to undertake speculative headline rental growth during 2018 as a requirements currently seeking space in the
development is evident due to Brexit result of reducing supply, including Bristol, region.
concerns and other macro-economic factors. Exeter, Gloucester and Swindon. This trend is
likely to continue in 2019. Changing occupier trends including agile/
Occupiers are seeking greater lease flexibility flexible working are continuing to impact on
resulting in continuing strong serviced and Strong city centre take-up and limited take-up and design/specification.
co-working space take-up and more flexibility immediate supply in key regional cities is
INDUSTRIAL MARKET SUMMARY
Andrew Ridler T 0117 317 1071 E aridler@alderking.com
Total take-up in key South West centres taken space back, and significantly moved Industrial demand
decreased when compared to 2017. This rentals on. In Bristol particularly, the rental 000s sq ft
was largely due to the lack of good quality gap between new and good quality second 2,000
immediately available supply, speculative hand space has reduced significantly.
development being on site and the continuing 1,500
1,606
loss of consented sites to alternative uses. There has been a continuing improvement in
rentals, lease durations and capital values in 1,000
The majority of centres are supporting the majority of centres, with the potential for
500
666
speculative development. St Modwen, further growth.
650
277
515
150
120
Chancerygate, KMW, Richardson Barbury,
95
377
310
15
0
Barwood Capital and Trebor have all started Severnside and the North Bristol motorway
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or are about to start schemes which will corridor has reinforced its regional
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deliver circa 1 million sq ft in Bristol alone. importance in Greater Bristol, albeit
Ply
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significant acquisitions have taken place
Demand is increasingly focused on better in Swindon (Iceland/B&Q) and Gloucester
specified space with new build activity (Dowty Propellers and TBS Engineering).
currently underway in Bristol, Gloucester, Industrial supply
Wellington, Bridgwater, Swindon and Despite the uncertainty of Brexit, key areas 000s sq ft
Plymouth. of growth continue to come from occupiers 3,000
Alder King Market Monitor 2019
in the logistics sector, particularly those 2,500
2,750
One of the main brakes to activity has been involved with internet fulfilment, and 2,000
the limited amount of second hand space an increasing number of enquiries from
1,500
coming to market, with some mid-range engineering and added value engineering
780
occupiers increasingly only able to satisfy occupiers. 1,000
225
472
971
their needs via the design and build route
350
250
500
168
167
120
as opposed to taking up existing space With the Severn Bridge tolls no longer in
10
0
freed up by those able to afford new build existence, we anticipate the South West
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opportunities. demand triangle of Tewkesbury, Bridgwater
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and Swindon becoming a rectangle to
Glo
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Increasingly where second hand space has incorporate the M4 west to Newport in
become available, landlords have proactively South Wales.
3
RETAIL & LEISURE MARKET SUMMARY
Rebecca Harries T 0117 317 1086 E rharries@alderking.com
Retailers are continuing to adapt and adjust There remains an underlying level of demand Zone A headline rent
their business models to meet the needs for well-located units in the stronger city £psf
of today’s shoppers. This is affecting both centres. 250
comparison and convenience sectors in both
225
200
high street and out of town locations. Retail closures will create new opportunities
210
205
200
for mixed use development in our major 150
165
The continued growth of internet shopping centres; it will also enable a range of non-
100
coupled with a fixed or rising cost base is retail uses to be introduced to several of our
110
100
100
100
leading retailers to review the performance existing shopping centres. 50
55
and size of their physical property portfolios.
42
0
Non-profitable stores are being rationalised The leisure sector remains active with
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through downsizing and closure. planned new development at Drakes Circus,
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Plymouth, Cribbs Causeway, Bristol and
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Those retailers that are unable to adjust North Star in Swindon.
(Ca
or rationalise are using CVAs to facilitate
restructuring. As reported last year, the discount food
sector is very active across our regions. Out of town headline rent
Across our regions, rents remain under £psf
50
pressure and in all but the very prime The food and beverage sector has
locations there is evidence of falling rents. experienced a challenging 12 months but 40
40
our experience suggests that there are good
38
35
30
High street vacancy levels have remained levels of demand for the stronger trading
30
relatively static although there are an locations. The independent operator remains
25
25
25
20
22
20
19
19
increasing number of voids in secondary and of growing importance.
10
tertiary locations which are best suited to
alternative uses; vacancy levels out of town 2019 is likely to be another year of continuing 0
remain at a low level. change. ol
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INVESTMENT MARKET SUMMARY Br
John Benson T 0117 317 1100 E jbenson@alderking.com
Assessing the outlook for commercial pricing for both prime and secondary assets Value of investment transactions
property investment for the year ahead is and competitive bidding situations. £ms
particularly challenging. Peak uncertainty 500
arising from Brexit negotiations is being In contrast, the sentiment in the retail sector
400
layered onto an already volatile political and remains fragile and deals are being closely
420
economic landscape at a time considered by scrutinised. High profile difficulties with 300
many to be late in the current UK property retailers and the prospect of many more
200
cycle. CVA’s has led to a nervousness about the
167
retail sector and what the future holds for the 100
68
60
Against this backdrop, demand for UK high street in particular. This slump in retail
96
22
82
83
18
14
10
0
commercial property remained firm in caused UK capital values and rental values to
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2018 and topped £50 billion for the sixth fall in November – the first time since October
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year running. The more difficult question is 2012 that both measures have fallen. This
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whether this will be repeated in 2019? We nervousness is being witnessed in the quoted
would expect activity in the first quarter to sector with the share prices reflecting a
be subdued as a large number of investors heavy discount to the NAV of the underlying
are monitoring events and awaiting the assets of companies with significant retail The Brexit deal has the potential to create
result of the negotiations before committing exposure. significant changes in occupier demand
to further transactions. Vendors have also patterns and the broader economy. Investors
Alder King Market Monitor 2019
held back the marketing of assets in Q4 Prime yields were generally stable will be closely tracking this alongside interest
2018 to avoid low levels of interest, weaker throughout 2018 but compression was rates and exchange rates in Q1 2019 as they
competition and prices. witnessed in the industrial sector and attempt to analyse the impact of Brexit on
softening in the retail sector. UK funds the property market. However, with many
The office, industrial and alternative sectors dominated the investment market in 2018 defensive qualities, we anticipate investors
have been robust and there is a good level and institutional demand remained strong for will remain focused on property, particularly
of investor demand. The lack of stock is the right product with solid fundamentals. As with strong fundamentals. Demand will
driving rental levels and prices upwards. The was witnessed in 2017, local authorities and continue for prime locations, long leases,
industrial sector was the strongest performer councils continued to acquire investments strong covenants and assets with rental
of 2018 with unprecedented yields being to generate additional revenue streams and growth and added value potential.
achieved. There continues to be a supply/ have invested over £1bn in UK commercial
demand imbalance which has led to keen property in 2018.
4
Key
Alder King
Transactions 1
ACQUISITIONS
1. Buildings 1 & 2 Enterprise Park, Bristol
for University of West of England.
Size 150,000 sq ft on 11 acres
2. 1st floor Park House, Parkway North,
Bristol for NHS Property Services.
Size 10,000 sq ft
3. Castlegate Business Park, Caldicot for
Monmouthshire County Council.
Size 220,000 sq ft on 17 acres 2 3
4. 26 Mead Avenue, Houndstone Business
Park, Yeovil for Wessex Packaging.
Size 70,673 sq ft on 3.34 acres
5. 1-5 Whiteladies Road, Bristol for the
University of Bristol.
Size 10,027 sq ft
6. Airfield House, Western Drive, Hengrove,
Bristol for Amphora Aromatics.
Size 20,000 sq ft on one acre 4 5
Alder King Market Monitor 2019
6
5
2 1
DISPOSALS
1. TV Building, Phase 3 Paintworks, Bristol
for Verve Properties.
Size 10,000 sq ft
2. Trafalgar House, Cardiff for Praxis Real
Estate Management Ltd.
Price £6 million
Size 51,343 sq ft
3. Building 1, Harlequin Office Park,
Emersons Green, Bristol for Mitie. 3 4
Size 27,239 sq ft
4. Torbay Business Park, Paignton for
Midas Commercial Developments Ltd.
Size 66,800 sq ft
5. Gloucester Business Park for Arlington.
Size 180,000 sq ft
6. Unit 1 Interplex, Bradley Stoke, Bristol
for private landlord.
Size 35,000 sq ft 5 6
Alder King Market Monitor 2019
7. Scania Bridgwater for KMW Properties.
Size 20,000 sq ft on three acres
7
6
3 Glass Wharf, Bristol. Courtesy of Salmon Harvester Properties/NFUM.
Bristol
£34.50 psf
New city centre office headline rent
OFFICES Demand
Simon Price T 0117 317 1084 E sprice@alderking.com 000s sq ft
1,500
1,250
The Bristol office market performed strongly Despite the success of this building, only one
1,250
once again in 2018, with both city centre and new scheme is currently under construction 1,000
1,091
1,039
out of town take-up at approximately 90% of in the city centre at The Distillery, Glassfields 10%
931
750
783
the 2017 figures. where Royal London is constructing three
500
buildings totalling circa 90,000 sq ft.
The co-working/serviced office operators Practical completion is due in 2020. AXA has 250
led take-up in the city centre market. also announced it will commence speculative 0
Significant transactions included Runway construction at the Assembly scheme during 14 15 16 17 18
East’s acquisition of 30,000 sq ft at 1 Victoria, Q1 2019.
Desklodge’s acquisition of 29,000 sq ft at Supply
Unum House and Ethical Property Company’s In north Bristol, a small number of 000s sq ft
purchase of 20,738 sq ft at Phase 3 of The refurbishment projects completed during the 2,000
Paintworks. second half of 2018, in particular at Building
600 Aztec West by Columbia Threadneedle 1,500
1,650
In the out of town market, the largest and Building 800 Aztec West. As a result
3.5%
1,250
transaction of the year was UWE’s acquisition of the limited supply, both the city centre 1,000
of two buildings from Hewlett Packard and out of town markets witnessed rental
850
725
500
totalling circa 148,000 sq ft whilst ALD growth during the year. In the city centre the
700
expanded taking 27,259 sq ft at Harlequin lettings at Aurora led the way, setting a new
0
Office Park in Emersons Green. city centre rental high of £34.50 psf. Quoting 14 15 16 17 18
rents for good quality city centre space are
Alder King Market Monitor 2019
Both the city centre and out of town now as high as £32.50 psf.
markets are now suffering from a severe Headline rent
lack of new or newly refurbished Grade A The top north Bristol rent achieved during 000s sq ft
40
accommodation. the year was £22.50 psf but at the recently
refurbished 600 Aztec West, the quoting rent 6.1%
34.5
30
In the city centre, the highly successful is now £24 psf. The gap between headline
32.5
28.5
28.5
28.5
95,000 sq ft Aurora Building at Finzels Reach rents in the city centre and north Bristol city centre
20
22.5
had only one floor remaining available at is currently at its highest level since office
22
21.5
21.5
21.5
practical completion following lettings during development commenced around the north
10
construction to Mewburn Ellis, Simmons & Bristol fringe in the early 1980’s and the 2.3%
Simmons and Parmenion. prospects for north Bristol rental growth over 0
the next 12 months therefore appear strong. out of town
14 15 16 17 18
city centre out of town
7
“One million sq ft
of speculative
industrial
development
is underway or
proposed.”
CGI of Podville, North Bristol’s first office container scheme. Courtesy of Podville Ltd.
CGI of Warmley Business Park, Warmley. Courtesy of Chancerygate. CGI of Unit 15, Access 18. Courtesy of St Modwen.
INDUSTRIAL *
Demand
Andrew Ridler T 0117 317 1071 E aridler@alderking.com 000s sq ft
5,000
Take-up in 2018 amounted to 1.606 million sq ft, the highest level for five years. This is
4,500
4,000
sq ft, a fall of 45% on the 2017 figure of 2.9 set against the built industrial stock for the
45%
3,000
million sq ft. To put the figures in context, the city comprising between 65–70 million sq ft.
2,950
2,902
2,600
10 year average take-up currently comprises 2,000
approximately 2.85 million sq ft. Speculative development is underway again,
1,606
1,000
as evidenced by St Modwen’s decision to build
Take-up for the first half of 2018 was 225,000 sq ft at Access 18 in Avonmouth, 0
approximately 617,000 sq ft with circa 90 Richardson Barbury and Richardson Capital’s 14 15 16 17 18
acres of land - mainly in Severnside - sold for schemes of 105,000 and 137,320 sq ft at
development in a total of 95 transactions, Central Park and Chancerygate’s Vertex Park Supply
with only seven transactions involving and Warmley Business Park schemes totaling 000s sq ft
standing buildings over 20,000 sq ft. 240,000 sq ft. 4,000
Take-up in the second half of the year was The continuing supply issue for Greater 3,000
circa 988,000 sq ft with approximately Bristol is the bulk of the available land is
83%
2,750
215,000 sq ft of the total take-up accounted located on Severnside, Avonmouth. 2,000
for by just two transactions, namely Apec’s
1,750
1,500
letting of 115,000 sq ft at Horizon 38, Filton Emerging schemes for 2019 will comprise 1,000
1,250
1,250
and Bristol City Council’s acquisition of additional phases at St Modwen’s Access 18,
0
101,397 sq ft at Hawkfield Business Park, Trebor’s Portside/Central Approach schemes 14 15 16 17 18
Whitchurch. and Barwood’s Junction development.
Alder King Market Monitor 2019
The overall number of transactions Outside of Severnside there is an extremely Headline rent
increased from 165 in 2017 to 173 in 2018 limited supply of sites immediately available, 000s sq ft
10
with approximately 73% of disposals (by particularly in central Bristol, North and East
number) involving property below 10,000 Bristol and Yate and Thornbury in South
9.50
8
8.75
8.5
sq ft. The drop in take-up was due to a lack Gloucestershire.
8
7.75
8.5%
of large scale speculative development 6
and immediately available better specified Strong demand continues from companies 4
modern buildings. wishing to purchase on a freehold basis with
capital values for better quality, well specified 2
In the same period the supply of industrial space still increasing. 0
space increased to approximately 2.75 million *
SW IAS 2018 14 15 16 17 18
8
CGI of ice rink and indoor ski centre at Cribbs Causeway. Courtesy of Baylis Estates.
Bristol
RETAIL & LEISURE Zone A headline rent
Rebecca Harries T 0117 317 1086 E rharries@alderking.com 000s sq ft
300
300
300
300
300
300
250
Following a public inquiry, proposals for Plans are well advanced for an early 2019
a £300m extension of The Mall at Cribbs start on site on Baylis Estates’ leisure and 200
0% 200
200
200
200
200
Causeway were refused by the Secretary retail development adjacent to The Venue 150
170
170
170
170
170
of State who favoured Broadmead as the at Cribbs Causeway. This will include a new
100
focus for future development. It remains to showroom for Jaguar Land Rover, as well as
be seen how soon more detailed proposals an ice rink, hotel, restaurant, retail and coffee 50
Broadmead
will emerge for the redevelopment of the shop. The Mall 0
Callowhill Court area encompassing The 14 15 16 17 18
Cabot Circus
Horsefair through to Quakers Friars. Although 2018 was a year of change in the
food and beverage sector, Bristol saw many Out of town headline rent
Despite the decrease in new store openings, new additions. Marston’s opened a Lost & 000s sq ft
there is still healthy demand for prime trade Found Cocktail Bar & Restaurant in Queens 50
locations. Recent new arrivals at Cabot Circus Road and the New World Trading Company
40
include Bershka, & Other Stories and TAG opened The Florist on Park Street. In addition
Heuer and, at The Mall, new stores include The London Cocktail Club opened on the
0%
30
The White Company, Seasalt, Schuh Kids and Triangle.
30
30
30
30
30
20
a larger TUI. Metro Bank opened in part of
the former BHS store, joining TK Maxx. The city’s independent sector continues 10
to expand, with both Pigsty and Woky Ko
0
Like many other established shopping opening second restaurants in Gloucester 14 15 16 17 18
centres, The Galleries is looking to widen its Road and Queens Road. In Portishead, The
Alder King Market Monitor 2019
tenant mix through the introduction of leisure Siren’s Calling opened @68 The Marina.
and other non-retail but complimentary uses. Leisure headline rent
At Eastgate Retail Park, there are plans to 000s sq ft
50
Away from the High Street, there was limited add an additional 12,000 sq ft together with a
activity around the city’s retail parks. Go new restaurant pod. 40
Outdoors took 10,000 sq ft at Centaurus
35
35
0%
Retail Park. The former Maplin and Toys R Us 30
32.5
32.5
30
units remain available. 20
15
15
15
15
15
10
12
12
12
12
12
cinema
health & fitness 0
14 15 16 17 18
A3/A4
9Imperial Tobacco HQ, Winterstoke Road, Bristol.
2630 Aztec West, Bristol. Aurora, Finzels Reach. Courtesy of Cubex Land.
INVESTMENT Value of investment transactions
John Benson T 0117 317 1100 E jbenson@alderking.com £ms
1,000
Oli Stretton T 0117 317 1121 E ostretton@alderking.com
800
845.4
The majority of investment transactions in 2018 were in the city centre office sector.
45%
600
Four office transactions completed in Q3 alone, totalling circa £161 million.
595.6
557.4
400
475.3
420
Winterstoke Road Imperial Tobacco Limited 2630 Aztec West In the out of town office
200
undertook two sale and leasebacks on its UK sector, the north Bristol office market saw
and Global HQ offices at Winterstoke Road a healthy increase in activity in 2018. The 0
14 15 16 17 18
in Bristol. 121 Winterstoke Road was acquired largest investment deal was 2630 Aztec
by Aberdeen Standard Investments for £51m, West which was acquired by a private
4.50% NIY with a new 20 year lease with five property company for £16.65m, 6.93% NIY. Prime yields
yearly indexed rent reviews. The adjacent The property is let to GE Oil & Gas plc for a %
building, let to Imperial Tobacco Limited on further 4.8 years. 8
a new 10 year lease with five yearly open
market rent reviews, sold to an overseas Hengrove Leisure Park The largest retail 7
investor for £15.2m, 6.20% NIY. and leisure transaction was AEW UK Core
Property Fund’s purchase of Hengrove 6
Aurora This new Grade A 95,530 sq ft Leisure Park, Bristol for £13.9m, 7.31% NIY. industrial
5
multi-let office at Finzels Reach was acquired The scheme is fully let to tenants including office
by Royal London Asset Management from Cineworld, McDonalds and Gala Bingo and retail high street
retail out of town 4
Cubex/Palmer Capital in an off market deal has a WAULT of 11.5 years to expiries and 6.2 14 15 16 17 18
for £62.13m, 4.75% NIY. Aurora is 85% years to breaks. It also has short term asset
Alder King Market Monitor 2019
pre-let to tenants including Simmons and management opportunities.
Investment by sector
Simmons, Parmenion and Mewburn Ellis, with
%
a WAULT of nine years. This deal reflects the 1%
highest ever capital value for Bristol offices
11%
at £650 psf.
8%
office
industrial
retail 81%
other
103 & 4 Capital Quarter, Cardiff.
Cardiff
£5.80 psf
New industrial headline rent
OFFICES Demand
Owen Young T 029 2038 1996 E oyoung@alderking.com 000s sq ft
1,000
The story of the Cardiff office market is Larger occupiers continue to be attracted 800
much the same as any other major city in to Central Train Station as part of the
704
29% 600
685.6
the UK. Demand remains robust but there is Rightacres Central Square development.
617
531
a shortage of Grade A city centre stock. This Hugh James has just relocated to No 2 to
499
400
has limited potential opportunities for growth occupy 100,000 sq ft, the BBC continues
200
and is no doubt a factor in an under par take- its fit-out to occupy 266,000 sq ft and No
up for the year when compared to the five 6 is well under construction for the GPU 0
year average of 567,000 sq ft. to occupy 269,000 sq ft. Following the 14 15 16 17 18
successful letting at No 3 Capital Quarter,
As always, a handful of larger transactions JR Smart will have 94,500 sq ft at No 4 Supply
dominate the figures and include Admiral Capital Quarter completing in 2019 where the 000s sq ft
taking 65,091 sq ft at 3 Capital Quarter and quoting rent is £24 psf. 1,000
1,000
Cardiff & Vale Health Board purchasing the
900
800
84,750 sq ft former Tesco House in Llanishen. Headline rents remain stable and are
788
not expected to rise until the next phase
710
707
Interestingly, there have been a number of development due for completion in 0.4% 600
400
of owner occupier purchases with existing 2021. During this time, we expect second
income on part. These have included hand rents to rise and stimulate further 200
BizSpace purchasing circa 51,000 sq ft at refurbishments, a notable example being
0
Trafalgar House, Howell Solicitors purchasing Hodge House which will release 67,250 sq ft 14 15 16 17 18
22,000 sq ft at Fitzalan House and Penguin in 2019.
Alder King Market Monitor 2019
Wealth purchasing 5,940 sq ft at 1-3 Raleigh
Walk. Headline rent
000s sq ft
25
Freehold demand remains strong, especially
25
25
25
for smaller sized properties and we are 20
22
22
witnessing increases in prices per sq ft for
better quality second hand stock. 0% 15
14.5
14.5
14
14
10
12
5
0
14 15 16 17 18
city centre out of town
11“The abolition
of the Severn
Bridge tolls will
entice investors
and occupiers over
the bridge which
can only escalate
demand.”
BizSpace at Trafalgar House, Cardiff.
INDUSTRIAL Demand
Owen Young T 029 2038 1996 E oyoung@alderking.com 000s sq ft
1,000
Take-up has decreased by 41% since 2017, Supply has fallen by 8% across the last 12 800
880
possibly due to a lack of large industrial deals months following a continuing trend over the
763
41.5%
600
in 2018 compared to 2017 which saw two last five years.
515
deals contributing to 74% of take-up.
499
400
402
This lack of supply constrained the market
200
Penarth and Hatfield Road in West Cardiff by providing limited options for occupiers
continue to head the trade counter and car to consider. A cause for fewer deals in 2018 0
sales market. Within this area, Glynstell Park could be due to historically low stock levels 14 15 16 17 18
was the most notable development in 2018 combined with only one available unit over
offering 56,524 sq ft of high quality modern 50,000 sq ft, this being the former SA Brains Supply
units which were fully let by the end of 2018. site at Ty Glas, Llanishen offering 58,176 sq ft. 000s sq ft
Capital Business Park and Ocean Way in East 1,500
Cardiff yet again saw a flurry of transactions, There is also limited development land for 1,250
confirming these locations as the epicentre speculative industrial developments in Cardiff
1,000
1,094
of the industrial warehouse market. which has proved to be a major constraint
8.3%
909
839
within the market. 750
Freehold properties continue to drive 500
515
price growth, with owner occupiers Cardiff is in need of large, high quality stock
472
250
substantially exceeding market levels to fulfil in order to fulfil occupier requirements.
0
requirements. Freehold transactions have Headline rents therefore have once again 14 15 16 17 18
subjugated the Cardiff industrial market, increased to £5.80 psf. This was evidenced
Alder King Market Monitor 2019
particularly the sale of the 80,000 sq ft by JAS Forwarding (UK) Ltd taking 20,842
former Westco premises on Penarth Road sq ft at Neptune Point on Ocean Park and Headline rent
and the 51,000 sq ft former Yodel site in 3,199 sq ft let to Denval Co Ltd at Cardiff 000s sq ft
6
Wentloog. Both occupiers and investors Business Park. With limited speculative
5.80
emphasise the importance of yards as a development on the cards, availability may 5
5.5
5.25
5
5
pivotal characteristic. continue to fall and headline rents may 4
increase. 5.45% 3
The abolition of the Severn Bridge tolls is
expected to further increase demand and 2
entice investors as well as occupiers over the 1
border which can only escalate demand. 0
14 15 16 17 18
12Queen Street, Cardiff.
Cardiff
RETAIL & LEISURE Zone A headline rent
Owen Young T 029 2038 1996 E oyoung@alderking.com 000s sq ft
300
250
Despite the uncertain future of some of the A number of high street A3 and A4 closures
city centre’s department stores, St David’s may have signalled a decline in this sector 200
225
225
225
225
225
Centre has attracted tenants including but there is resilience with new openings 0% 150
Stradivarius, Berksha, Ecco Shoes, Daniel of Slim Chickens in St David’s Centre, Knife
100
Wellington and Proline Skates. However, a and Fork at 29 Park Place and Cosy Club in
number of units remain available, especially Mermaid Quay. 50
in Queens Arcade, exerting downward 0
pressure on headline rents. Discount operators continue to dominate 14 15 16 17 18
demand at more secondary retail parks. For
Ground floor units within the new BBC example, B&M Home Store has taken a six Out of town headline rent
headquarters building in Central Square have year lease on 30,225 sq ft at Brooklands 000s sq ft
been in demand with strong rentals and new Retail Park, Culverhouse Cross. 50
tenants including Boots, Greggs and Pret a
40
Manger. The proposed development of the
40
40
40
new bus Interchange Building will release
0%
30
additional units and high demand is expected.
30
30
20
10
0
14 15 16 17 18
Alder King Market Monitor 2019
Leisure headline rent
000s sq ft
50
40
40
40
40
40
40
0%
30
20
10
13
13
13
13
13
11
11
11
11
11
cinema
health & fitness 0
14 15 16 17 18
Stradivarius at St David’s Centre, Cardiff. A3/A4
13CGI of the Custom House Premier Inn Hotel. Cardiff Waterside. Courtesy of Aviva.
Courtesy of Barola Properties.
INVESTMENT Value of investment transactions
John Benson T 0117 317 1100 E jbenson@alderking.com £ms
500
James Nicholas T 029 2038 1994 E jnicholas@alderking.com
474.5
400
2018 was a very strong year for the office sector in Cardiff with 80% of the deals being in
this sector. Office developments such as Central Square and Capital Quarter have attracted 65% 300
investor interest and Cardiff’s reputation as an international business hub continues to grow. 200
209
188.2
169.1
166.72
100
Former Custom House, Central Cardiff. Vale Gate Retail Park, Culverhouse Cross.
In March 2018, Aviva forward funded the New River Retail purchased this multi-let 0
14 15 16 17 18
redevelopment of the former Custom House retail park in February from Curo Sterling for
building for £34m, 4.10% NIY. The site was £12.15m, 10% NIY. The circa 94,000 sq ft park
pre-let to Premier Inn on a 30 year lease comprises seven units and is anchored by Prime yields
with a tenant break at year 20 with a passing TK Maxx. Other tenants include Mothercare, %
rent of £1,475,600 per annum with fixed rent Carpetright and Dreams. 8
reviews. The hotel will provide 248 bedrooms
over 17 floors and is forecast to open in late St Patricks House, 17 Penarth Road. 7
2019. The site is considered to be the final This recently refurbished 51,500 sq ft office
piece of the Central Cardiff regeneration building was acquired in February by the 6
jigsaw that has seen the development of Regional Office Property Unit Trust, which industrial
5
Central Square, the regeneration of Mill Lane is managed by Schroder Real Estate, from office
and the Brewery Quarter. Hodge Bank for £14.15m, 7% NIY. Network retail high street
retail out of town 4
Rail occupies 30,500 sq ft over three floors 14 15 16 17 18
Cardiff Waterside. In January 2018, Global and the remainder of the building is vacant.
Alder King Market Monitor 2019
Mutual Properties acquired the Cardiff
Investment by sector
Waterside office estate from Aviva for
%
£84.5m, 8.25% NIY. Covering 11.8 acres, the
scheme comprises seven office buildings
5%
providing 402,309 sq ft of Grade A office 8%
space. Tenants include ITV Wales, KPMG, 7%
Gambit Corporate Finance and Ofcom. The
estate also includes two land sites with the
potential for a further 360,000 sq ft of new office
Grade A office space. industrial
80%
retail
other
14One Tiger Moth Road, SkyPark. Courtesy of St Modwen.
Exeter
£20 psf
New office headline rent
OFFICES Demand
Noel Stevens T 01392 353093 E nstevens@alderking.com 000s sq ft
250
2018 was another year characterised by a won’t have any impact on supply for some 200
200
199
lack of supply. While new stock did come onto time, it is welcome news for a city with such
19%
175
150
167
the market, there was only just enough to tight supply. 150
satisfy requirements. 100
We continue to see construction cost
50
One of the most notable new buildings was inflation driving the cost of new build and
One Tiger Moth Road, a speculative build refurbishment, with developers and investors 0
of 17,142 sq ft at SkyPark. This offers three requiring higher rents and sale prices to 14 15 16 17 18
floors of Grade A accommodation and, on justify development. This should help to
completion, already had one occupier at a continue the uplifts in values for secondary Supply
record rent of £19.50 psf. We have since let stock. 000s sq ft
the first floor and agreed a further increase 400
in headline rent to £20 psf. This is now the The rapid rise in values is resulting in a
high water mark for the office market in divergence between the perception of values 300
325
300
Exeter. from an occupier’s point of view and that
required to deliver buildings. When sale 9.5% 200
197
We also saw an increase in secondary stock, prices in excess of £270 psf are quoted, many
179
162
principally on Pynes Hill where Vantage Point occupiers don’t consider this good value and 100
and Aperture came to market following high therefore don’t proceed with acquisitions.
0
quality refurbishments. These proved popular Unfortunately these are the sort of levels 14 15 16 17 18
in the market and served in part to dampen required to make development viable.
Alder King Market Monitor 2019
the appetite for new build. Rents increased
throughout the year and £16 psf is now the The limited stock has left many occupiers Headline rent
accepted level for good quality secondary with very few options and some have been 000s sq ft
25
space. forced to postpone moves, holding out for
that elusive freehold. The positive news in 20
The city centre remains very tightly 2018 was continued increases in rents and
20
19.5
18.5
17.5
17.5
17.5
17.5
17.5
2.5%
constrained with no new development. capital values which is making development 15
16
15.5
Exeter City Council has put forward more viable and will, we hope, lead to further 10
major regeneration plans through its new developments in the future to help unlock
development company Exeter City Living pent-up demand. 5
which may include office space. Whilst this 0
14 15 16 17 18
city centre out of town
15“This groundswell
of demand will
lead to new
development in
2019 which will
help unlock the
market.”
CGI of The Lookout, Exeter Business Park. Courtesy of Summerfield Developments Ltd.
Vantage Point, Pynes Hill. CGI of Matford Green Business Park. Courtesy of Prego Investments Ltd.
INDUSTRIAL Demand
Noel Stevens T 01392 353093 E nstevens@alderking.com 000s sq ft
1,000
Exeter’s industrial market is characterised available to satisfy those requirements. 800
by a real lack of supply, with no new build The occupier’s solution is to alter its supply
22% 758
600
coming to market and very little secondary chain rather than wait for space to become
stock. Land is available for construction but, available in Exeter. That said, a large building 400
given significant construction cost inflation, will be constructed in 2019 delivering circa 355
330
200
277
developers are concerned about demand for 100,000 sq ft of space, the terms of which are
255
space at rents of £8+ psf. yet to be understood. 0
14 15 16 17 18
high st
As in previous years, demand for smaller sub The impact of this lack of supply is pressure
15,000 sq ft freeholds remains very strong on the price of secondary stock and therefore Supply
from local and regional businesses, many of increases in rents and capital values but, 000s sq ft
whom look to hold the product in their SIPP. also worryingly, more occupiers simply 400
This is only magnified in the smallest sub staying put. Given there was no speculative
5,000 sq ft sector. development in 2018, we didn’t generate 300
requirements for this type of space. Our view
1%
250
Across all sectors, the cost of construction is there is a large number of requirements 200
210
remains the factor to overcome and ready to come to market as soon as product
constructing small units simply isn’t viable becomes available. 100
195
in the current market for capital values of
167
165
0
less than circa £140 psf. For this reason, This groundswell of demand will lead to new 14 15 16 17 18
developers are reluctant to proceed. development in 2019 which will help unlock
Alder King Market Monitor 2019
the market. We will be coming to market with
The demand seen in previous years for circa four 7,500 sq ft warehouses at Matford Green Headline rent
100,000 sq ft warehouses from national and Business Park on a leasehold only basis 000s sq ft
10
multinational occupiers weakened in 2018. and expect demand to be strong from local,
Our view is that this is a function of market regional and national occupiers. 8
8.90
failure where there simply weren’t options
8
8
8
8
11.25%
6
4
2
0
14 15 16 17 18
16CGI of Moor Exchange. Courtesy of CPG Developments.
Exeter
RETAIL & LEISURE Zone A headline rent
Noel Stevens T 01392 353093 E nstevens@alderking.com 000s sq ft
250
Out of town leisure development has to the business park offer outside the city. 200
210
210
210
210
200
attracted a large number of column inches The impact of these developments will be
in 2018 with four possible schemes being increased amenities for staff who are unable 0% 150
put forward. to get in to the city centre and back in their 100
lunch hours.
50
The two most relevant are Moor Exchange
where CPG Developments has a strong roster The city centre has suffered from closures, 0
of tenants lined up including Next, Boots and mainly in the food and beverage sector. The 14 15 16 17 18
McDonalds. The other is Middlemoor, part of city retains a vibrant offer and will see new
Devon and Cornwall Police’s HQ. Hammerson brands coming forward. The turnaround to Out of town headline rent
was chosen to bring forward development save House of Fraser is welcome good news 000s sq ft
and planning applications for both schemes for the High Street, but we suspect there will 50
should be decided in early 2019. These will be other big name closures in 2019.
40
generate valuable construction projects
38
for the area and give a significant boost
8.6%
30
35
35
35
30
20
10
0
14 15 16 17 18
Alder King Market Monitor 2019
Leisure headline rent
000s sq ft
50
40
42
42
42
42
40
0%
30
20
17
17
17
17
10
13
12
12
12
11
10
cinema
CGI of Middlemoor Retail Park. CGI of Moor Exchange. health & fitness 0
14 15 16 17 18
Courtesy of Hammerson/Devon & Cornwall Police. Courtesy of CPG Developments. A3/A4
17Woodwater House, Pynes Hill.
INVESTMENT Value of investment transactions
John Benson T 0117 317 1100 E jbenson@alderking.com £ms
250
Scott Rossiter T 01392 353089 E srossiter@alderking.com
200
Over 70% of the investment deals were in the retail sector with high street retail in Exeter
190
54% 150
177.7
showing a resilience to the turbulence seen in other locations and continued investor demand.
100
252-253 High Street. This freehold Units 1-11 Sowton Industrial Estate,
81.88
50
22.7
18.6
high street retail unit was acquired by Heron Road. This circa 38,000 sq ft multi-
Kames Capital for £11.88m, 5.19% NIY in let industrial estate was acquired by West 0
14 15 16 17 18
June 2018. The unit is in a prime location, Devon Borough Council in September 2018.
directly adjacent to John Lewis and is let The freehold estate is let to seven tenants
to Waterstones and Halifax with 11.2 years including Anglian Windows and Muller Prime yields
unexpired. The passing rent is £657,328 per Wiseman. The quoting price was £2.925m, %
annum. 6.5% NIY and the completed price was 8
£3.5m, 5.45% NIY, illustrating the strong
16-20 High Street. This circa 8,000 sq demand for multi-let industrial assets. 7
ft high street retail unit, let to H&M and
Barclays, was acquired by a UK Pension Fund Woodwater House, Pynes Hill. This circa 6
for £23.5m, 4.75% NIY in October 2018. The 50,000 sq ft Grade A single let office industrial 5
sale follows the refurbishment of the H&M building was acquired by Torbay Council office
unit and the conclusion of a Barclays rent for £9.3m, 6.70% NIY. The office is single retail high street
retail out of town 4
review. let to Michelmores LLP with an unexpired 14 15 16 17 18
lease term of 7.1 years. The rent passing is
Alder King Market Monitor 2019
£664,653 per annum. Alder King acted for
Investment by sector
the vendor.
%
3%
16%
9%
office
industrial 72%
retail
other
18CGI of Downing’s Malthouse, Bakers Quay. Courtesy of Rokeby Developments.
Gloucester 52% City centre office take-up
OFFICES Demand
Adrian Rowley T 01452 627133 E arowley@alderking.com 000s sq ft
250
Overall take-up of space in Gloucester The headline rent for Grade A out of town 200
220
increased by 52% to 220,000 sq ft, the city’s space has risen for the second consecutive
highest level for some years. year to £21.50 psf. 52% 150 150
150
145
145
100
Notable transactions included Ecclesiastical Rents for secondary out of town space have
50
Insurance which announced its plans to also risen and are now in the region of £14
relocate from the city centre to a new 65,000 -£15 psf. 0
sq ft building at Arlington’s Gloucester 14 15 16 17 18
Business Park and entered into pre-let terms. Headline rents for the city centre remain at
Also at Gloucester Business Park, Horizon £11.75 psf. Supply
Energy continued its expansion, acquiring a 000s sq ft
further 14,300 sq ft of Grade A space. 200
180
Demand for out of town space continues to 150
150
outperform that of city centre space. That
0%
140
140
140
being said, there were some notable city 100
centre deals including Regus which acquired
50
the 17,150 sq ft Conway House in Worcester
Street and the NHS which acquired 14,300 sq
0
ft at 2 Kimbrose in Southgate Street. 14 15 16 17 18
Alder King Market Monitor 2019
Supply of Grade A and secondary space
remains at very low levels. Headline rent
000s sq ft
25
Activity in the serviced office space sector
continues, with BizSpace completing the 20
21.50
refurbishment of Building 1 The Office
20
19
18.5
18.5
Campus at Barnwood which provides some 7.5% 15
37,000 sq ft of accommodation. As referred 10
11.5
11.75
11.75
11.75
11.5
to above, Regus has converted the former
Conway House building to provided centrally 5
located serviced and co-working space. 0
CGI of Ecclesiastical Insurance, Gloucester Business
14 15 16 17 18
Park. Courtesy of Arlington.
city centre out of town
19“Demand for
out of town space
outperformed
that of city centre
space. That being
said, there were
some notable city
centre deals.”
Building 1, Gateway 12, Gloucester. Courtesy of St Modwen.
CGI of Dowty Propellers, Gloucester Business Park. Courtesy of Arlington.
INDUSTRIAL Demand
Adrian Rowley T 01452 627133 E arowley@alderking.com 000s sq ft
1,000
Gloucester’s industrial market performed Despite this new development, the level of 750
strongly in 2018, with demand increasing by available prime, secondary and tertiary stock
30% 700
650
30% to approximately 650,000 sq ft. in Gloucester remains low. The Rockhaven 500
scheme at Triangle Park and Gabwell scheme
500
400
400
Once again, it was the city’s manufacturing at The Quadrant Centre both delivered much 250
sector which contributed significantly to needed smaller format new build space with
the take-up, with three large new buildings strong take-up in both schemes. 0
delivered for manufacturing businesses 14 15 16 17 18
at Arlington’s Gloucester Business Park. The headline rent for development-
These included a 110,000 sq ft facility for delivered new build space has moved on to Supply
TBS Engineering which completed in May £7 psf, greatly influenced by construction 000s sq ft
and a 150,000 sq ft facility for G-TEKT and a cost inflation. With further increases in 400
400
180,000 sq ft facility for Dowty Propellers, construction costs expected together with
350
350
both of which are under construction. continued build to suit activity anticipated, 300
the upward pressure on rents is likely to
0%
250
250
St Modwen’s decision to speculatively continue. 200
develop its Gateway 12 scheme paid off,
with significant lettings of 46,000 sq ft Headline rents for mid-range secondary 100
to Samworth and 38,000 sq ft to Amazon buildings are now in the region of £5-
0
Book Depository, both for warehouse and £5.50 psf. 14 15 16 17 18
distribution use. In addition, a building of
Alder King Market Monitor 2019
34,000 sq ft is now under offer, again for
warehouse use. Two buildings of 66,400 sq ft Headline rent
and 24,100 sq ft remain available. 000s sq ft
10
8
3.7%
7
6
6.75
6.5
6.25
6
4
2
0
14 15 16 17 18
20CGI of Bakers Quay. Courtesy of Rokeby Developments.
Gloucester
RETAIL & LEISURE Zone A headline rent
Adrian Rowley T 01452 627133 E arowley@alderking.com 000s sq ft
125
The first phase of the Bakers Quay Out of the city centre, Paloma is bringing 100
100
100
100
100
100
100
100
100
100
100
development at Gloucester Docks completed forward the redevelopment of the former
in 2018. A pre-commitment from Whitbread Whitbread site in Eastern Avenue where a mix 0% 75
delivered a Costa Coffee restaurant and of retail and restaurant uses are proposed. 50
drive-thru, a Premier Inn hotel and Beefeater Chase Commercial is due to commence Phase
25
restaurant. Alongside, the new build 2 of its Triangle Park retail scheme which will
Provender building provided three A3 units include a second drive-thru restaurant and 0
at ground floor with high quality apartments associated in line units. 14 15 16 17 18
Eastgate St Kings Walk
above, achieving record sales values. The
second phase of the scheme will bring Out of town headline rent
forward additional retail, bar and restaurant 000s sq ft
opportunities, together with some 147 luxury 50
apartments.
40
Completion of the new Next retail store at the
0%
30
35
35
35
Peel Centre is due to open in the spring of
20
25
25
2019 and will provide approximately 28,000
sq ft of floor space plus a café. 10
0
In the city centre the new £7.5 million 14 15 16 17 18
state-of-the-art bus station was completed,
Alder King Market Monitor 2019
creating a new gateway to the city. This
completes the first phase of the City Council Leisure headline rent
promoted Transport Hub scheme. Funding 000s sq ft
50
has been secured for the second phase
focusing on the refurbishment of the railway 40
station. Off the back of these projects,
0%
the City Council is promoting the Kings 30
32
32
32
32
32
Square redevelopment comprising a mixed 20
use scheme which aims to continue the
regeneration of the central area. 10
12
12
12
12
12
9
9
9
9
9
cinema
The Provender Warehouse, Bakers Quay. health & fitness 0
14 15 16 17 18
Courtesy of Rokeby Developments. A3/A4
21CGI of Bakers Quay. Courtesy of Rokeby Developments.
Twyver House, Bruton Way, Gloucester. Gloucester Quays.
INVESTMENT Value of investment transactions
John Benson T 0117 317 1100 E jbenson@alderking.com £ms
125
Adrian Rowley T 01452 627133 E arowley@alderking.com
100
97.9
Over 75% of the deals were in the retail sector with the Tesco, Quedgeley transaction making
up over half of the investment volume total. 9% 75
68.33
50
Twyver House, Bruton Way. This single let Barnett Way, Barnwood. Columbia 62.7
37.2
25
32.7
office building totalling 75,654 sq ft was Threadneedle purchased this single let
acquired by Torbay Council from Greenridge industrial building from Craigard in June 2018 0
14 15 16 17 18
Investment Management for £11.8m, 6.30% for £4.9m, 6% NIY. The property is single let
NIY. The detached, five story office building is to Kohler Mira for an unexpired term of circa
let to Secretary of State for the Environment three years. Prime yields
until September 2067 with a tenant break %
in September 2028. HM Land Registry is Tesco, Bristol Road, Quedgeley. East 8
currently in occupation and the property has Hampshire District Council acquired this
interesting medium to long term prospects Tesco Extra Superstore from L&G in March 7
as it is strategically important to the 2018 for £38.85m, 5.75% NIY. The store
regeneration of Gloucester. totals circa 86,000 sq ft. 6
industrial
5
office
retail high street
retail out of town 4
14 15 16 17 18
Alder King Market Monitor 2019
Investment by sector
%
19%
4%
77%
office
industrial
retail
22Milsom Place, Bath.
Bath
OFFICES Demand
Simon Price T 0117 317 1084 E sprice@alderking.com 000s sq ft
125
120
The Bath office market continues to see a New build developments with planning 100
111
high level of demand against a limited level consent are proposed at Roseberry Place and
90
90
88
23%
75
of immediate supply which is impacting on Bath Quays South. In addition the Council
take-up. has shortlisted development partners for the 50
strategically important Bath Quays North
25
Notable 2018 transactions included the which will deliver office space of a quality not
letting of 17,000 sq ft at 20 Manvers Street previously seen in the city. 0
to media agency Edit and animation company 14 15 16 17 18
Funko’s acquisition of 9,000 sq ft at A further letting at the Chocolate Factory in
Seven Dials. Keynsham means that less than 25,000 sq ft Supply
is now available for immediate occupation at 000s sq ft
The most active sectors in the Bath market the scheme. 250
are the co-working/serviced office operators,
200
together with the TMT and professional The best headline rent achieved in Bath city
services sectors. A number of co-working/ centre remains £31 psf at 20 Manvers Street.
6.7%
150
serviced office enquiries are actively seeking However a number of the proposed new
145
100
125
space in the city centre following the developments are guiding headline rents
95
successful launch by Spaces (Regus) of its above this level. 50
75
70
Northgate House centre.
0
In addition to providing a strong background 14 15 16 17 18
Supply of immediately available, flexible for rental growth, the restricted level of
Alder King Market Monitor 2019
modern open plan accommodation remains supply is resulting in downward pressure on
very limited. Chartis House on Trym the level of incentives being granted. Headline rent
Street, comprising circa 10,000 sq ft in a 000s sq ft
40
Grade II listed building, is undergoing a
comprehensive refurbishment and is already
30
seeing a strong level of interest.
31
31
31
0%
26
20
21
10
0
14 15 16 17 18
city centre
23INDUSTRIAL Demand
Andrew Ridler T 0117 317 1071 E aridler@alderking.com 000s sq ft
100
Demand for good quality industrial space The lack of modern space is holding back 80
85
remains strong, with a number of active take-up. Notable transactions in 2018
0%
60
requirements, particularly freehold. However included Halfords and Kew Electrical who
there are limited options in the city. acquired space at Locksbrook Road Trading 40
Estate and Dulux who opened in Unit 13 at the
20
Supply is limited to second hand stock. Maltings Industrial Estate on Brassmill Lane.
10
15
15
15
There has been no speculative industrial/ 0
distribution development in Bath and none is The imbalance in demand and supply means 14 15 16 17 18
expected for the foreseeable future. we anticipate headline rentals for new space
of £9 psf. Supply
Occupiers struggling to find accommodation 000s sq ft
of a modern specification are therefore being 100
forced to consider locations outside Bath,
80
with east Bristol being of particular interest.
85
85
60
100%
40
20
10
20
5
0
14 15 16 17 18
Headline rent
000s sq ft
10
9
8
8.75
8.5
8.5
8
3%
6
4
2
Halfords, Locksbrook Road Trading Estate.
0
14 15 16 17 18
RETAIL & LEISURE
Rebecca Harries T 0117 317 1086 E rharries@alderking.com
Demand for prime pitches remains strong, Zone A headline rent Out of town headline rent Leisure headline rent
with several new openings in 2018 including £psf £psf £psf
Card Factory in SouthGate and Dr Martens
and Nationwide in Union Street. Metro Bank 250 50 50
also opened in Stall Street. Apart from the 200 40 40
opening of Mero Retail Park, there was no
205
205
200
200
200
35
35
35
35
35
150 30 30
significant activity out of town.
30
30
30
100 20 20
25
25
The city’s food and beverage offer now
50 10 10
14
14
14
14
14
includes Franca Manca in SouthGate and Le
11
11
11
11
11
Vignoble in Milsom Place. The Botanist will 0 0 0
14 15 16 17 18 14 15 16 17 18 14 15 16 17 18
open in The Octagon Hall at Milsom Place.
cinema health & fitness A3/A4
INVESTMENT
John Benson T 0117 317 1100 E jbenson@alderking.com
Significant transactions included: Investment by sector Value of investment Prime yields
% transactions %
Northgate Street and 9-11 Bridge Street. £ms
Alder King Market Monitor 2019
DTZ Investors acquired this mixed use retail, 125 8
leisure, residential and office investment in the 2.8% 100
7
107.3
city centre for £6.5m, 5.50% NIY.
96.054
75
6
Somerset Hall. The Eyre Estate acquired this
33.54
50
62%
23,397 sq ft office let to the Secretary of State
20.4
11%
13.25
5
25
for Communities & Local Government from
Aviva for £8.8m, 5.17% NIY. The passing rent is 0 4
14 15 16 17 18 14 15 16 17 18
£455,000 per annum with an unexpired term
industrial
of 10 years. The office is adjacent to Bath North
office office
Quays, BANES’s flagship regeneration project. retail retail high street
Alder King acted for the purchaser. industrial retail out of town
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