2021 Market Monitor South West of England and - Alder King
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Market Monitor South West of England and South Wales Property Review 2021 Property intelligence you can build on
Contents
3 Key Market Trends
5 Key Alder King Transactions
7 Bristol
11 Cardiff
15 Exeter
19 Gloucester
23 Bath
25 Bridgwater
27 Plymouth
Foreword
29 Swindon
Market Monitor examines
31 Taunton the occupational and
33 Truro
investment markets in
10 key centres across the
35 Residential Development Land
South West of England
36 Planning and South Wales.
Simon Price
Senior Partner
Alder King
SUMMARY Investors, as always in turbulent times, were drawn in a Key South West Centres
general flight to quality, showing strong demand for industrial Office and Industrial Take-Up and Supply (000 sq ft)
In a year that threw up a host of questions for the property
logistics, prime offices and other secure income assets. Office Office Industrial Industrial
market – about how we live, how we work, how we shop, how Year
While transactions volumes were down, there is a significant Take-Up Supply Take-Up Supply
we socialise - it’s remarkable how resilient some sectors of
weight of money looking for attractive returns and with 2020 1,393 2,695 6,395 4,771
the market were in 2020.
greater certainty later this year, investors will return. 2019 1,745 2,356 4,208 5,872
The industrial/logistics market emerged strongest from the 2018 1,880 2,319 3,880 4,816
The pandemic accelerated on-going change in the retail
crisis, recording annual take-up of over 6.3 million sq ft in the
and leisure sectors. With a relaxation in planning policy and 2017 1,719 2,490 5,054 3,578
South West, the region’s highest figure since 2016. This was
strong pent-up demand from consumers, the opportunity 2016 2,023 2,724 8,427 3,694
driven by continuing demand from e-commerce, government
now exists to evolve our high streets to incorporate more
investment in infrastructure and last mile logistics. The
independent retail - which on the whole survived better than Cardiff Office and Industrial Take-Up and Supply
lack of immediately available space means there is strong
Alder King Market Monitor 2021
Alder King Market Monitor 2021
the large chains - as well as a wider mix of uses including (000 sq ft)
potential for developers to secure more industrial pre-lets
residential, leisure, workspace and civic amenities.
and pre-sales this year, leading to improved rentals, lease Year
Office Office Industrial Industrial
Take-up Supply Take-up supply
durations and capital values. While the overall situation remains unsettled, we start
2020 305 692 595 1,150
2021 with a Brexit trade deal in place, a Covid vaccination
With the widespread move to remote working during the
programme underway and a pipeline of market opportunities 2019 357 721 477 845
pandemic, many office occupiers are reviewing their future
for developers, landlords, investors and occupiers, allowing us 2018 499 710 515 472
occupational requirements and commonly expecting to
to feel optimistic of a sustained bounce-back in most sectors 2017 704 707 880 515
need less (by circa 10-20%) space but of a better quality/
of the market beginning the second quarter of 2021.
specification. 2016 686 788 499 839
2
Key Market
Trends
OFFICES SUMMARY INDUSTRIAL & LOGISTICS SUMMARY RETAIL & LEISURE SUMMARY INVESTMENT SUMMARY
Simon Price T 0117 317 1084 E sprice@alderking.com Andrew Ridler T 0117 317 1071 E aridler@alderking.com Rebecca Harries T 0117 317 1086 E rharries@alderking.com Oli Stretton T 0117 317 1121 E ostretton@alderking.com
Whilst the office sector was clearly hit hard by the pandemic in 2020, The industrial/logistics market showed its resilience to 2020’s The Covid-19 pandemic had a major impact on the retail and leisure Brexit and other macro concerns evident at the start of 2020 were
initial claims of a permanent mass move to working from home/ challenging market conditions and was the strongest performing sector sector throughout 2020, with two national lockdowns and the overshadowed by the Covid-19 pandemic resulting in a significantly
remotely are now a thing of the past with most occupiers looking across the region, contributing to a record year for national UK take-up. closure of all non-essential shops putting a real strain on businesses. lower volume of investment transactions. Although the year got off
towards office re-occupation during H1 of 2021, once the virus is Regionally this is best demonstrated by a 55% increase in take-up in As a result there was a steady rise in the number of national brands to a promising start in Q1, activity dropped dramatically in Q2 and Q3
hopefully under control. Greater Bristol from that in 2019 albeit in a number of centres a lack of announcing administrations, CVA’s and permanent store closures. before investors returned strongly in Q4.
immediately available space constrained take-up.
Fundamentally, whilst many occupiers may seek to occupy slightly There are however a significant number of retailers who are There was strong demand in the industrial sector, fuelled by
less space, the importance of the office as a location for community, Demand was driven by e-commerce businesses, government investment committed to acquiring more space to continue physical retailing. e-commerce and last mile logistics, as well as any assets offering
collaboration, interaction and training is now very widely accepted. in infrastructure and safeguarding against Brexit through repatriation of Food and convenience stores, pet shops and home improvement long-term secure income. As in any challenging market, there was a
Many of the occupiers we are talking to are identifying Q1 2021 as manufacturing and stockpiling of goods. The logistics sector, particularly stores remain the most active. Out of town retail parks and drive- general flight to quality.
the time to establish future requirements and to start to implement internet fulfilment, and manufacturers/added value engineering thrus also remain resilient which is largely down to the benefit of
occupational strategy. occupiers also drove demand. car parking and the space for people to social distance. Investors were cautious towards the office sector as they
contemplated to what extent the short-term behavioural impacts of
Alongside this, we are already seeing an increased focus on building The region’s most significant transactions of 2020 included Amazon’s Online spending continues to grow month on month, with fitness the pandemic will play out in the longer term. Evidence suggests that
quality – a shift towards slightly less space but space of a better 2.3 million sq ft robotic logistics centre at Symmetry Park in Swindon equipment and DIY standing out as people spend more time in investor appetite remains for the very highest quality buildings and a
quality/specification. Increased awareness of workplace health and and Bart Spices’ and Wincanton/EDF’s acquisitions in Avonmouth their homes. balanced occupier position.
wellbeing is also resulting in a much greater focus on design, amenity and Portbury. Gloucestershire saw higher than average take-up for
and enhanced M&E systems which is evident in the latest new office manufacturing space with some significant deals while in Exeter Stovax Occupiers across the board are seeking increased lease flexibility Events accelerated ongoing structural change in the retail and leisure
schemes now being promoted and in some locations constructed by committed to a new 190,000 sq ft manufacturing facility at SkyPark. so they can assess their trading figures without having to make markets which were disproportionately affected by the pandemic and
developers. a long term commitment. The turnover-based approach is also therefore least favoured by mainstream purchasers.
The majority of centres are supporting speculative development, with becoming ever more popular, allowing tenants to manage overheads.
Alder King Market Monitor 2021
Alder King Market Monitor 2021
The very limited level of supply in some of the region’s key centres St. Modwen, Chancerygate, Mountpark, Panattoni, Summerfield, Tristan, Severe short-term impacts on the purpose-built student
including Bristol and Bath resulted in better than expected levels of Canmoor, KMW and Trebor all active across the region. With more redundant retail space across the regions, more landlords accommodation and buy-to-rent sectors will quickly be reversed and
market activity during the latter part of 2020. The ongoing loss of are having to consider repurposing options and alternative uses. we will see continued demand in these and other alternative sectors.
office space for residential conversion and the limited amount of new The mid box market performed well with a surge of activity particularly The introduction of the new Use Class Order has given landlords
build space coming into the market should outweigh the release of in Bristol, Gloucester and Exeter. There is strong potential for pre-lets more flexibility to consider different potential occupiers. Markets were cushioned and negative impacts deferred by strong
occupier ‘grey’ space in most markets. and pre-sales together with design builds with the lack of supply leading liquidity, low interest rates and unprecedented government financial
to improved rentals, lease durations and capital values. Local independent operators continue to take advantage of and policy intervention.
Going into 2021 we believe there is a strong level of pent-up demand previously unattainable property, and the demand for small,
in key locations which will result in a quick rebound from Q2 onwards. For some affordability will be an issue as the rental gap between new well-placed units remains strong. The independent sector is 2021 will present a mixed picture but greater certainty will bring greater
and good quality second hand space has reduced significantly. We becoming increasingly attractive to landlords in comparison to opportunity, with a weight of money looking for attractive returns and
expect further upward pressure on rents, particularly for those facing national brands given they have the ability to adapt quickly to opportunist purchasers looking to exploit market disruptions, high
their first rent reviews on space acquired since 2015. ever-changing government guidelines and consumer demand. liquidity and supportive planning and other policy initiatives.
3 4
Key
Alder King
Transactions 1 1
ACQUISITIONS DISPOSALS
1. 330 Bristol Business Park 1. Unit 3 St. Modwen Park Gloucester
for private investor for St. Modwen
Price £1m, 8.35% NIY Size 73,597 sq ft
Size 5,191 sq ft
2. 2nd Floor, 1 Brunswick Square, Bristol
2. 11-13 Tyndalls Park Road, Bristol for Columbia Threadneedle
for University of Bristol Size 14,198 sq ft
Size 10,376 sq ft
3. DVSA, Quedgeley, Gloucester
3. 26 North Road, Yate for Brabon Properties
for South Gloucestershire Council 2 3 Price £4.625m, 5% NIY 2 3
Price £4.62m, 6.44% NIY Size 1.53 acres
Size 47,685 sq ft
4. The Old Library, Cardiff
4. Former Motus Site, Days Road, Bristol for Cardiff Council
for Travis Perkins Size 1,559 sq ft
Size 30,886 sq ft on 2.7 acres
5. Units A1-A4 Matford Green Trade Park,
5. Short-Term Operating Reserve Exeter for Prego Investments
Gas Facility, Gloucester Size 31,400 sq ft
for Harworth Group
Price £1.2m, 8.25% NIY 6. Unit 18 Access 18, Avonmouth
Size 1.28 acres 4 5 for St. Modwen 4 5
Alder King Market Monitor 2021
Alder King Market Monitor 2021
Size 45,000 sq ft
6. Anson Business Park, Gloucestershire
for Clarkson Evans 7. 48 Lynch Lane, Weymouth for PwC
Price £1.63m Receivers
Size 5.57 acres Size 46,248 sq ft
7. Block D Chocolate Quarter, Keynsham
for St Monica Trust
Size 0.5 acre
6 7 6 7
5 6
Former Motus Site, St Philips, Bristol. Courtesy of Motus. Unit 2 Interplex, Bradley Stoke, Bristol. Courtesy of Mileway.
10 Wapping Road, Bristol. Courtesy of Bellborough.
Bristol Unit 18 Access 18, Avonmouth. Courtesy of St. Modwen.
OFFICES Take-Up
INDUSTRIAL & LOGISTICS *Take-Up
Simon Price T 0117 317 1084 E sprice@alderking.com 000s sq ft Andrew Ridler T 0117 317 1071 E aridler@alderking.com 000s sq ft
1,250 5,000
Despite the challenges resulting from Encouragingly for 2021 there are several Take-up in 2020 amounted to 2.285 million box enquiries which resulted in the take-up
4,500
1,000 4,000
1,091
1,039
Covid-19, the Bristol office market delivered significant active requirements in the sq ft*, an increase of 55% on the 2019 figure of any overhang in supply. This is perhaps
939
931
a robust performance in 2020, with take- 30 – 80,000 sq ft size range and, with 18% 750
of 1.474 million sq ft and approaching the 10 best demonstrated by Peugeot’s 45,000 sq ft 55% 3,000
764
2,902
up boosted by a very strong Q1 and a very limited good quality Grade A existing stock 500 year average of 2.5 million sq ft. leasehold acquisition at Access 18, lettings of 2,000
2,285
encouraging Q4 which saw the completion available, some are having to consider pre-let 32,000 and 42,000 sq ft to SIG and Network
1,606
250 1,000
1,474
of several significant deals negotiated over opportunities. The professional and financial Take-up for H1 2020 stood at 621,000 sq Rail at More + on Severnside and 62,992 sq ft
the summer. services, TMT and the public sector remain 0 ft, with the largest building acquired being to Argos at Horizon 38, Filton. 0
the most active sectors in terms of take-up 16 17 18 19 20 70,000 sq ft in Weston-super-Mare. H2 16 17 18 18 20
The lack of supply in both the city centre and current active enquiries. take-up amounted to 1.663 million sq ft In addition over 220 acres of land was let or
and out of town markets meant that, at the Supply with three deals accounting for 647,000 sq sold for development and occupation with Supply
end of the year, headline rents had held their With the completion at the end of 2020 of 000s sq ft ft. These were Bart Spices’ acquisition of notable transactions including the letting 000s sq ft
pre-Covid levels. In fact Bristol city centre set RLAM’s Distillery scheme on Avon Street, 1,250 Barwood Capital’s 139,000 sq ft Junction of the Former Honda Distribution Centre at 4,000
a new record rent of £38 psf at One Portwall One Portwall Square is the only brand new 1 and Wincanton/EDF acquiring Logicor’s Avonmouth (56,000 sq ft on 63 acres) to
1,000
Square. However incentive levels have Grade A space due to complete during 248,000 sq ft WA 248, both on Severnside, BCA. 3,000
3,000
increased in both the city centre and out of 2021. However, new build schemes including with EDF also acquiring 260,000 sq ft at
850
5% 750
50%
2,750
town markets. Assembly Phase 2, Welcome Building, EQ Royal Portbury. In Avonmouth, Trebor’s 150,000 sq ft 2,000
735
725
700
700
500
and Halo are all due to complete during Portside scheme at Kings Weston Lane has
1,500
1,500
Unlike some other regional cities across 2022/2023. The volume of transactions increased from now completed and Mountpark is on site 1,000
1,250
250
the country, Bristol has so far only seen 154 in 2019 to 159 in 2020 with approximately with a speculative 360,000 sq ft building.
0 0
a very limited release of occupier ‘grey’ Q4 2020 also saw the completion of a 16 17 18 19 20
66% of disposals involving property below St. Modwen has planning permission for 16 17 18 19 20
space. Whilst many occupiers are reviewing number of high quality refurbishments 10,000 sq ft. its 220,000 sq ft five unit Phase 6/7 with
Alder King Market Monitor 2021
Alder King Market Monitor 2021
head count and their exact future size including Gilbert House/41 Corn Street and planning submitted for a further 885,000 sq
requirements, there is a developing trend 10 Wapping Road, all of which are attracting Headline rent In the same period the supply of industrial ft. Tristan Capital is planning the next phase Headline rent
towards slightly less space (commonly by good occupier interest. £psf space decreased to approximately 1.5 million of More + which will provide 385,000 sq ft. £psf
40 10
10 – 20%) but better quality space so that sq ft, the lowest level for three years. For **
10
9.75
38
when staff and clients do return to offices We do anticipate greater focus during 2021 context, the city’s built industrial stock is The continuing supply issue for Greater
9.50
37.5
1.3% 8
8.75
34.5
8.5
30
the overall impression is improved. We are on Bristol as a potential relocation/expansion between 65 and 70 million sq ft. Bristol is that the bulk of development land
32.5
28.5
also seeing much more occupier focus on location as more London occupiers in city centre is located on Severnside, Avonmouth with 2.5% 6
23.5
20
23
22.5
environmental credentials, building amenity, particular seek to grow their hub and spoke Despite the Covid-19 situation, a key feature of an extremely limited supply in central, north
22
21.5
4
M&E specification and individual building model. 2020 was the increase in activity relating to and east Bristol, Yate and Thornbury where
10
community and culture. 2% e-commerce, largely driven by the pandemic strong unsatisfied demand exists. 2
0
forcing businesses and private individuals to 0
16 17 18 19 20 buy online, and in addition the return of mid *SW IAS 2020 16 17 18 19 20
out of town
city centre out of town **
for sub-10,000 sq ft
7 8
“The highest
volume of
transactions
was in the office
sector despite the
challenges presented
by the pandemic.”
2620 Aztec West.
Planet Ice, Cribbs Causeway. Courtesy of Baylis Estates/Planet Ice.
Bristol Halo, Finzels Reach, Bristol. Orpen Park, Bristol.
RETAIL & LEISURE Zone A headline rent
INVESTMENT Value of investment transactions
Rebecca Harries T 0117 317 1086 E rharries@alderking.com £psf John Benson T 0117 317 1100 E jbenson@alderking.com £ms
300 1,000
Oli Stretton T 0117 317 1121 E ostretton@alderking.com
300
300
300
250
2020 was a challenging year for retailers There have been a number of new openings 800
845.4
across the country. Encouragingly though, across the Bristol independent food and 200 As expected, there was a reduced volume of transactions in 2020. There was strong demand
657.9
0% 200
19% 600
200
200
200
200
Bristol saw sales growth above the national beverage sector. On Whiteladies Road, Boston for industrial/logistics, albeit a very limited number of opportunities, and also for assets
180
180
150
170
170
170
533
average and footfall levels remained Tea Party has relocated to larger premises
150
150
offering long secure income. The highest volume of transactions was in the office sector 400
475.3
420
100
consistent prior to the November lockdown. and Italian restaurant Number Fifty has taken despite the challenges presented by the pandemic.
200
the former Mary Janes café. Eat a Pitta has 50
Vacancy rates in some areas of the city are opened its fifth Bristol site in Clifton Village. 0 Halo, Finzels Reach. Tesco Pension year was this single-let distribution unit 0
increasing. Queens Roads in Clifton and The Red Church has opened in St George 16 17 18 19 20 16 17 18 19 20
Investment acquired Halo in Bristol for sold by Jetstorm Properties to Columbia
Broadmead in particular have seen closures and Bristol Loaf, incorporating its organic £70m. This 116,000 sq ft building is being Threadneedle in September for £24.75m,
of several outlets where national brands have sourdough bakery, Hugo’s Greengrocer, Two- Out of town headline rent built speculatively by Cubex/Fiera with 6.29% NIY. The building is 182,500 sq ft and Prime yields
made the decision to close some sites within Belly Cheesemonger and The Bristol Vine £psf the majority let to Osborne Clarke and is let to Next Plc for a further six years. %
their portfolios. have opened in Bedminster. 30 circa 42,000 sq ft remaining to let. Given 8
30
30
30
25 the current economic backdrop, this 2620 Aztec West. This freehold single-let
Cabot Circus saw the closure of DW Sports The larger stores in out of town locations significant transaction which completed in office building was sold by Aviva Investors to 7
25
25
20
recently due to the company entering into are performing better, due to the benefit of June demonstrates a big vote of investor M7 Real Estate in July for £21.2m, 6.8%. The
administration. The Samsung Experience ample car parking and the ability for people
0% 15
confidence in the Bristol office market. building totals 76,240 sq ft and is let to EE 6
Store and German restaurant/bar to social distance. 10 Ltd for a further seven years.
Klosterhaus by D&D London are now both 5
5 Orpen Park, Bradley Stoke. Orpen Park in
open and trading and Lego has recently The Mall at Cribbs Causeway has also Almondsbury, a circa 80,000 sq ft multi- 100 Bristol Business Park. This newly
0 4
announced it will be opening a new flagship experienced some issues this year with the 16 17 18 19 20
let industrial estate was sold by Longmead developed freehold single-let office building 16 17 18 19 20
Cabot Circus store soon. Oh La La Ice Cream collapse of Intu and some store closures. Capital to M7/Blackstone for £9.6m, 5.6% was sold by Abstract Securities to Aviva
Alder King Market Monitor 2021
Alder King Market Monitor 2021
& Desserts also opened in the centre in However John Lewis and Marks & Spencer NIY. Investors in August for £55.2m, 4.6% NIY. industrial 4.25%
August 2020. continue to trade well and medical operator Leisure headline rent The building totals 132,000 sq ft and was pre- office 4.75%
Therapie Clinic UK hopes to take over the £psf retail high street 6.5%
Clifton Down Shopping Centre, Clifton. let to Babcock for 15 years. retail out of town 6.75%
40
Demand remains steady for well-placed former Bose store, subject to planning. Baylis This freehold multi-let shopping centre was
small to medium sized units that offer lower Estates’ nearby leisure complex is making acquired by Sovereign Housing Association First Avenue, Portbury. This freehold single-
35
35
35
35
30
32.5
occupational costs. There is an increased good progress, with Planet Ice rink due to from Blackrock UK Property Fund in October let industrial unit was sold by Euro Property
demand from start-ups and independent open in Spring 2021. 0% 20
for £27.2m. The site offers medium-long Investment to South Gloucestershire Council
and regional operators who are becoming term potential for redevelopment for a major in January for £6.2m, 5.73% NIY. The
increasingly more attractive to landlords. mixed use development. building is 53,733 sq ft and is let to A-Gas Ltd
15
15
15
15
15
10
12
12
12
12
12
until 2033 subject to a tenant break option
0
Next Distribution, Western Approach. in 2028.
16 17 18 19 20 The largest industrial transaction of the
9 10
The Old Library, Cardiff.
Cardiff 3 Ipswich Road, Cardiff. Courtesy of Springfall Properties.
OFFICES Take-Up
INDUSTRIAL & LOGISTICS Take-Up
Owen Young T 029 2038 1996 E oyoung@alderking.com 000s sq ft Owen Young T 029 2038 1996 E oyoung@alderking.com 000s sq ft
800 1,000
Unsurprisingly, there was a sharp fall in Other notable deals last year included As with the rest of the UK, Cardiff’s industrial To its detriment, Cardiff’s employment land 800
704
880
600
685.6
demand for office space as a result of the Starling Bank taking 14,075 sq ft at Brunel and logistics market outperformed other allocation is relatively limited with new
pandemic and occupiers’ reassessment House and Target Group taking 12,300 sq ft 14.5% sectors, even during lockdown, and especially opportunities quickly being snapped up 24% 600
499
400
595
515
of future working practices and space at Eastern Business Park. for units below 5,000 sq ft where demand for higher value residential or mixed uses.
499
400
477
357
requirements. is very strong, accounting for 59% of deals Notable exceptions are Proco Developments
305
200
200
The refurbishment of Hodge House on St last year. who recently constructed and sold all eight
Take-up for 2020 was 45% down on the Mary Street is now complete with further 0 units ranging from 1,440 to 3,140 sq ft on 0
five year average of just over 550,000 refurbishments ongoing at Fusion Point on 16 17 18 19 20 Freehold properties are becoming scarce, Lamby Way. Fairfield Industrial Estate in 16 17 18 19 20
sq ft. A suspected increase in demand for Dumballs Road, Alexandra House on Tyndall accounting for few transactions in 2020. We Taffs Wells released six new build units last
out of town accommodation, as a result of Street and Dumfries House on Dumfries Supply predict an increase in freehold opportunities year and successfully let the majority before Supply
companies seeking accommodation closer Place, each with the intent of increasing the 000s sq ft during 2021 once the lending institutions are practical completion. The units ranged from 000s sq ft
to their homes, did not transpire and city city’s larger floorplate Grade A offer. 800 free from repossession restrictions. 980 to 1,500 sq ft, again evidencing strong 1,200
centre accommodation dominated activity, demand for smaller units where occupiers
788
1,150
1,000
721
710
707
especially in and around Central train station. Supply decreased slightly and is now just Interestingly, units between 5,000 and were not afraid to pay as much as £10 psf.
692
600
800
For example, the BBC has now completed its below 700,000 sq ft. Around 38% of this is 10,000 sq ft have tended to attract less
845
839
relocation to Central Square and HMRC is Grade A accommodation of which 25% is
4% 400 interest, which could be as a result of smaller Headline rents have once again increased
36% 600
finalising relocations into the 270,000 sq ft located in the Bay area. businesses finding it difficult to make the to over £6 psf due to the demand for good 400
515
472
200
recently completed William Morgan House, jump to this level, creating more availability in quality and well positioned industrial stock.
200
also on Central Square. Headline rents for the city remain at £25 this size range. Overall supply has increased This is evident as a result of lettings such
0 0
psf achieved from the lettings at the 2 16 17 18 19 20
by 36% due to a surge of available properties as 5,831 sq ft let to Cardiff & Vale University 16 17 18 19 20
The big letting for 2020, and one which Central Square office building to law firm between 20,000 sq ft and 60,000 sq ft. Health Board for £6.17 psf at Parc Ty Glas,
Alder King Market Monitor 2021
Alder King Market Monitor 2021
accounts for 45% of the year’s take-up, was Hugh James and Cardiff University School Llanishen.
Legal & General consolidating its two Cardiff of Journalism, Media and Culture. We expect Headline rent Notable deals last year included the BBC Headline rent
offices at Brunel House and Knox Court and this level to remain throughout 2021 but with £psf solidifying its presence in Cardiff, committing £psf
25 6
taking 121,256 sq ft at the £140m Interchange increasing upward pressure on incentives. to 30,553 sq ft at Lakeside on St Mellons
25
25
25
25
25
6
5.80
5.80
building on Central Square. This will also Business Park. The largest deal of the year 5
5.5
20
5.25
provide a new bus station, ground floor retail/ was the letting by Welsh Government to 4
leisure and 300+ build to rent apartments 0% 15 Great Point Studios at Wentloog consisting 3.5% 3
14.5
14.5
14.5
14.5
14
and is due for completion in November 2022. 10
of 177,719 sq ft in Q3.
JR Smart continues speculative construction 2
of the first phase of John Street at Callaghan 5 1
Square releasing 109,000 sq ft expected at 0 0
the end of 2021/early 2022. 16 17 18 19 20 16 17 18 19 20
city centre out of town
11 12
The Hayes, Central Cardiff.
Cardiff Global Reach, Celtic Gateway Business Park.
RETAIL & LEISURE Zone A headline rent
INVESTMENT Value of investment transactions
Owen Young T 029 2038 1996 E oyoung@alderking.com £psf Oli Stretton T 0117 317 1121 E ostretton@alderking.com £ms
250 500
Owen Young T 029 2038 1996 E oyoung@alderking.com
474.5
Uncertainty remains surrounding the The Hayes as well as taking 1,129 sq ft on the 200 400
225
225
225
220
407.2
200
future of retail not only as a result of the ground floor of Capital Tower on Greyfriars The Cardiff market experienced reduced levels of activity but confidence remained in the
pandemic but due to the forced speed in Road. 9% 150
logistics and office sectors. Notable transactions included: 57% 300
the progression towards online sales. At this 100 200
point, it is almost impossible to estimate the The big news is Marston’s taking over the Red Dragon Centre, Cardiff Bay. Global Reach, Celtic Gateway Business
172
169.1
166.7
50 100
effect on headline rents in the city, as it is to operation and leasing the 156 Brains pub Early in 2020, Cardiff Council completed Park. This multi-let office building, enjoying a
predict the short term future. chain, thankfully keeping the Welsh brand 0 the acquisition of the Red Dragon leisure prominent position and excellent car parking, 0
name. 16 17 18 19 20 16 17 18 19 20
scheme from BA Pension Fund to facilitate was acquired by London & Scottish Property
Whilst the closure of Debenhams and a major leisure-led mixed use regeneration Investment Management on behalf of
administrations of Arcadia Group, Bon Other positives include the ever increasing Out of town headline rent scheme. Plans are for the existing 13 acre 16 Regional Reit for £8.40m, 8.90% NIY. Prime yields
Marche, DW Sports, Edinburgh Woollen demand for drive-thrus and discount food £psf unit leisure scheme to be added to existing %
Mill, Peacocks, Go Outdoors and TM Lewin operators remain hungry for new sites. 40 land interests and redeveloped to provide a Service Area, Cardiff Gateway Business 8
40
40
40
40
40
dominated headlines, there were still some Even Metro Bank has opened a drive-thru £500m mixed use development anchored by Park. In a surprise off market transaction,
positive stories, with Hollister seizing the on Newport Road. Furthermore, in July, 30 a new 15,000 person capacity indoor arena. Newcore Capital Management purchased the 7
opportunity to move to a larger store in St Starbucks opened a new drive-thru on Cardiff Council was reported to have paid petrol filling station service area and ancillary
David’s shopping centre and new stores for Culverhouse Retail Park. It’s ironic that
0% 20 £54.60m. retail from Cardiff Gate Business Park Ltd for 6
Hotel Chocolat, Levi’s, ECCO, FatFace and the city is set to open its first drive-thru a reported £10.0 m, 4.79% NIY.
Skechers. Coronavirus testing centre in Whitchurch. 10 5
4 Capital Quarter. Demonstrating continued
confidence in the city centre office market,
0 4
As CVA’s become more prevalent, we predict 16 17 18 19 20
JR Smart sold this prime multi-let office 16 17 18 19 20
a trend towards pop-up shorter term stores investment to Greenridge Regional UK
Alder King Market Monitor 2021
Alder King Market Monitor 2021
and turnover rents, which will make for some Property for £33.40m, 5.47% NIY. industrial 5%
interesting future valuations. Leisure headline rent office 5.5%
£psf retail high street 6.5%
retail out of town 7%
40
Restaurants and leisure companies have been
40
40
40
40
40
hit hard but there is no doubt this sector will
30
bounce back with several brand operators
already inquisitive for the better located, 0% 20
soon to be vacated stores. Evidence of this is
Kiln and Ilk opening a new 1,133 sq ft site on
13
13
13
13
13
10
11
11
11
11
11
cinema
health & fitness 0
16 17 18 19 20
A3/A4
13 14
CGI of the Stovax Heating Group building. Courtesy of St. Modwen.
Kestrel GTX, Sowton Industrial Estate, Exeter.
Courtesy of Staunton Property.
Exeter Units A1-A4 Matford Green Trade Park. Courtesy of Prego Investments. Exeter Trade Park, Marsh Barton, Exeter. Courtesy of Graftongate.
OFFICES Take-Up
INDUSTRIAL & LOGISTICS Take-Up
Noel Stevens T 01392 353093 E nstevens@alderking.com 000s sq ft Noel Stevens T 01392 353093 E nstevens@alderking.com 000s sq ft
200 800
200
199
758
The occupation of office space changed Although there is an increase in supply, we 150
The industrial property market was once At Mercury Business Park in Cullompton, we 600
167
dramatically in 2020. With many staff having have yet to see downward pressure on rents. again the best performing sector in the are offering small industrial units both for
144
barely set foot in buildings since the end of Incentives have moved out but landlords and 21% 100 region. While some transactions were delayed sale and rent. Interest has been very strong 38% 400
114
March, the temporary impact on the market developers are holding firm at the moment. and a few aborted at the start of lockdown 1, with half the units in the first phase under
355
has been huge. The longer term impacts will We expect this position to remain for quality businesses in the industrial and warehouse offer months ahead of completion. Units start
277
50 200
273
take several years to be fully understood due space. In secondary locations and where sector adapted and in some cases thrived in a from 753 sq ft at £150 psf.
170
to the length of commercial leases. premises may be in need of improvement 0 new restricted trading environment. 0
we expect negotiations to be harder and 16 17 18 19 20 We saw strong activity at the upper end of 16 17 18 19 20
high st
So whilst staff stayed away in their droves, reductions to be given. The supply of suitable premises remains the market in H2 2020. The Stovax Heating
businesses still paid rent and occupied the Supply the primary issue in the market with little Group agreed terms to lease a 196,000 Supply
space, albeit on a much lower density. Some Despite the pandemic, transactions did take 000s sq ft secondary stock coming to market, very sq ft building at SkyPark. Construction is 000s sq ft
obviously took the decision to move out of place, particularly in the first half of the year. 400 limited new build under construction and programmed to begin in summer 2021. 250
251
404
space permanently as we saw an increase Transaction volumes were down but only a development pipeline that won’t provide Lettings at Kestrel GTX and Units A1-
200
225
in stock of 2,000 to 5,000 sq ft coming to by about 30%. Some of these transactions 300 additional supply until Q2 2021. There are A4 Matford Green Trade Park also took
195
market in H2 2020. were already committed. The largest totalling good levels of interest in two schemes under place. These were the largest buildings
272
48% 10% 150
167
165
almost 15,000 sq ft was to the NHS to 200 construction and it is a lack of stock that held on the market and showed the demand
100
197
The accepted wisdom is that businesses will support The Nightingale Hospital and the back take-up last year rather than the wider for space in the 30,000 – 50,000 sq ft
179
162
reduce the amount of space they occupy. We response effort. 100 economic picture. bracket. Strong rents were also achieved 50
anticipate that demand will exist in 2021 for reflecting the market but also the high
0 0
this newly released space as larger occupiers The second half of the year was slower as 16 17 18 19 20
Exeter Trade Park, located on the former quality refurbishment at Kestrel GTX and the 16 17 18 19 20
who are less quick to act downsize as well. the expected summer return to work didn’t Vospers Ford site in Marsh Barton, will be construction cost inflation impacting new
Alder King Market Monitor 2021
Alder King Market Monitor 2021
materialise. We therefore saw reduced ready for occupation in July 2021. There is builds like Matford Trade Park.
Supply stands at its highest level since 2013. activity across the year but it’s too early to Headline rent strong interest in the six trade counter units Headline rent
This is due to an increase in smaller suites say if this reduction is the start of a trend or £psf which will provide a leap forward in headline With such strong demand from the logistics £psf
20 10
coming to market but also the availability at a short term reaction to the pandemic. rents to north of £12 psf. The Graftongate sector, we expect to see increased demand
20
20
20
19.5
Winslade Park where there is over 100,000 development also offers two larger in 2021.
18.5
8
17.5
17.5
17.5
17.5
17.5
8.90
8.90
8.90
15
sq ft of space across three buildings. distribution units which will meet the strong
8
8
0% 10
demand evident in the market. 0% 6
4
5
2
0 0
16 17 18 19 20 16 17 18 19 20
city centre out of town
15 16
High Street, Exeter.
Exeter Broadwalk House, Southernhay West.
RETAIL & LEISURE Zone A headline rent
INVESTMENT Value of investment transactions
Noel Stevens T 01392 353093 E nstevens@alderking.com £psf Oli Stretton T 0117 317 1121 E ostretton@alderking.com £ms
250 200
Scott Rossiter T 01392 353089 E srossiter@alderking.com
In the current climate it is very difficult There is also demand from operators of drive- 200
177.7
150
210
210
210
210
210
to comment on the retail sector without thru restaurants, whether it be fast food or Investment activity in Exeter mirrored activity nationally with a lower volume of transactions
focusing too much on retail closures and coffee. Both saw strong trading as soon as 0% 150
generally but with a number of notable transactions either side of the mid-year period. 59% 100
changes in buyer behaviour. In Exeter the restrictions were lifted. Many benefitted from 100
81.8
closure of high street retailers has been a slimmed down menu and reduced staff as Exeter Retail Park. Early in 2020 Patrizia Sowton Industrial Estate. During the course
72.4
29.6
50
22.7
50
underway for several years as online only the drive-thru was open. This helped Immobilien AG acquired from Aviva Investors of 2020, a number of transactions occurred
spending increased. generate income at a time when restrictions 0 Pensions this multi–let retail park for on Sowton Industrial Estate including the 0
prevented some competitors from opening. 16 17 18 19 20 16 17 18 19 20
£23.70m, 9.27% NIY. disposal by Fiera Real Estate of the Giant
In the early days of Amazon and its Booker Unit to Urban Logistics Reit Plc for
competitors, we saw backfilling of the retail Where there is interest in the market, Out of town headline rent Broadwalk House, Southernhay West. £5.1m, 8.0% NIY. Prime yields
voids by the food and beverage sector. Exeter whether it be on the high street or out £psf The Crown Estate disposal of this well %
had large scale expansion in Princesshay and of town within retail parks, we are seeing 40 located multi-let office building attracted 8
The Guildhall with a focus on experiential occupiers looking for more flexible leases, strong interest for existing office use and
38
38
38
35
35
retail and café culture. These brands took allowing them to dip a toe into the water 30 the opportunity to reposition. Castleforge 7
on large national expansion programmes without long term lease commitments. Partners acquired it for circa £13.0m, 5.0%
and were already suffering badly before Turnover rents are also far more popular
0% 20 NIY. 6
the pandemic. The lack of trade from Q2 enabling occupiers to balance property costs
10 5
2020 onwards only served to hasten further against returns, rather than creating larger Exeter Gateway. The Church Commissioners’
closures in a declining sector. The full impact fixed overheads. patient investment in the Exeter Gateway
0 4
on the city centre will only become clear 16 17 18 19 20
prime logistics development resulted in two 16 17 18 19 20
as we review the all-important Christmas significant forward funding transactions
Alder King Market Monitor 2021
Alder King Market Monitor 2021
trading period and head through 2021. following single unit lettings having been industrial 4.75%
Leisure headline rent agreed with Amazon Logistics and DHL. office 5.75%
This situation has served to polarise the £psf retail high street 6.5%
Urban Logistics Reit Plc committed at £11.2m retail out of town 6.75%
50
market. There is strong demand from the and £8.5m respectively representing a
convenience sector with the likes of Co-Op 40 reported 5.3% NIY.
42
42
42
42
42
and Tesco keen to open new stores in close
30
proximity to residential development. These 0%
local centres performed very well in 2020 20
as they met the needs of the consumer at a
17
17
17
17
17
local level. 10
12
12
12
12
12
cinema
health & fitness 0
16 17 18 19 20
A3/A4
17 18“Another strong
performance
demonstrates
the resilience of
the Gloucester
market.”
Unit 3 St. Modwen Park Gloucester. Courtesy of St. Modwen.
The completed Ecclesiastical Insurance headquarters,
Gloucester Business Park. Courtesy of Arlington.
Gloucester The GE Aviation/Dowty Propellers building. Courtesy of Arlington.
OFFICES Take-Up
INDUSTRIAL & LOGISTICS Take-Up
Adrian Rowley T 01452 627133 E arowley@alderking.com 000s sq ft Adrian Rowley T 01452 627133 E arowley@alderking.com 000s sq ft
250 800
Through what turned out to be a turbulent Elsewhere in the county, Iress acquired 200 2020 saw another strong performance by St. Modwen has commenced work on Phase
220
705
700
600
650
year for the sector, take-up in the Gloucester some 50,000 sq ft in Formal Investments’ the Gloucester industrial market with total 2 at St. Modwen Park Gloucester to deliver
20% 150
22%
550
office market remained approximately in line Honeybourne Place located in St James take-up of circa 550,000 sq ft. The majority three speculative new industrial warehouse
160
500
400
150
145
140
with the five year norm at 140,000 sq ft. Square, Cheltenham, the most significant 100 of the city’s supply in recent years has come buildings of 36,000 sq ft, 42,000 sq ft and
office building undertaken in Cheltenham for from new build development and this remains 55,000 sq ft, with a targeted completion date 200
50
Perhaps of more relevance was the level many years. the case. of June 2021.
of H2 activity and here there was strong 0 0
take-up and ongoing unsatisfied demand for Supply of available space in Gloucester 16 17 18 19 20 St. Modwen’s first phase at St. Modwen Park Furthermore, Paloma Capital and Chase 16 17 18 19 20
space. Whilst how occupiers use their office remains low and is currently in the region of Gloucester reached practical completion Commercial intend to start on site at Access
space may change in the short, medium or 200,000 sq ft. There seems little prospect Supply at the end of 2019, with the 45,000 sq ft Park, Eastern Avenue, Gloucester with six Supply
long term, this change has brought about of new build speculative office development 000s sq ft building let simultaneous with completion to new industrial buildings from 10,000 sq ft to 000s sq ft
continued demand. coming forward and so new building delivery 200 Adey Innovation. The 56,000 sq ft building 30,000 sq ft. Demolition and site clearance 400
will most likely be in the form of build to suit let to ProCook in June and the 74,000 is due to commence in early 2021 with the
200
180
180
350
350
350
350
During the year, Arlington completed the delivery. Further land remains available for 150 sq ft building was let to Swantex Paper in industrial development to follow. The scheme 300
new 66,000 sq ft headquarters building for this purpose at Gloucester Business Park October. This, together with the letting of also includes consent for 55,000 sq ft of
11%
140
140
0%
250
Ecclesiastical Insurance Group at Gloucester and centrally, Gloucester City Council’s Kings 100 St. Modwen’s last building at Gateway 12 to bulky goods retail space, a drive-thru, pub/ 200
Business Park. This is a stunning building Quarter scheme has provision for new office Advanced Insulation in July, demonstrates restaurant and hotel.
50 100
currently being fitted out for occupation development. the resilience of the Gloucester market.
early in 2021. Gloucester Business Park Elsewhere other schemes set to provide
0 0
remains an attractive out of centre location In Cheltenham, completion of the 16 17 18 19 20
Peveril Securities are scheduled to much needed Grade A industrial space 16 17 18 19 20
and strong interest is present in nearly all of refurbishment of The Quadrangle scheduled commence work at Centre Severn, Barnwood include Chancerygate’s 14 unit 91,200 sq ft
Alder King Market Monitor 2021
Alder King Market Monitor 2021
the vacant office stock. for Q1 2021 will provide some 52,000 sq ft on a new 125,000 sq ft distribution facility on Festival Trade Park at Kingsditch Trading
of office space. This is a landmark building Headline rent a 16 acre site which is being procured on a Estate in Cheltenham. This will be its second Headline rent
Demand for residential conversion centrally located adjoining Imperial Gardens £psf pre-let basis and in Tewkesbury, Moog have development in Cheltenham in as many £psf
25 8
opportunities remains strong and this, and the scheme includes ground floor retail agreed terms for a new 184,000 sq ft unit years, having completed the 92,800 sq ft
together with a further relaxation of planning and restaurant space and a new rooftop 20 with expansion land, again on a pre-let basis. Furlong Park at Bishops Cleeve in 2019 and
7
7
7
21.50
21.50
21.50
6.75
6
policy, is set to deliver more activity in many restaurant. follows IPIF’s second phase of speculative
20
6.5
19
under-utilised city centre buildings. 0% 15 Supply stands at approximately 350,000 sq trade units completed also at Kingsditch 0% 4
10
ft. Available stock will be boosted by much Trading Estate.
11.75
11.75
11.75
11.75
11.75
needed new speculative development starts.
2
5
0 0
16 17 18 19 20 16 17 18 19 20
city centre out of town
19 20“Strong investor
demand remains,
in particular in
the industrial
sector.”
DVSA, Quedgeley. Courtesy of Brabon Properties.
Lidl supermarket, Gloucester. Courtesy of Robert Hitchins.
Gloucester Gateway 12 Business Park. Courtesy of ProCook.
RETAIL & LEISURE Zone A headline rent
INVESTMENT Value of investment transactions
Adrian Rowley T 01452 627133 E arowley@alderking.com £psf Oli Stretton T 0117 317 1121 E ostretton@alderking.com £ms
125 125
Adrian Rowley T 01452 627133 E arowley@alderking.com
123.8
Within the central area, Rokeby Whilst demand for prime high street 100 100
100
100
100
100
100
100
100
100
Developments continues with the major space was challenged through 2020, it is 2020 saw very few transactions in the region. Those opportunities that did present themselves
reconstruction of the historic Downings encouraging that demand for secondary 20% 75
76% 75
80
80
confirmed that strong investor demand remains, in particular in the industrial sector.
68.33
Malthouse building at Bakers Quay, retail space remains good with a significant
62.7
50 50
Gloucester Docks. Not only does this level of take-up occurring in the central area, Wincanton, Brockworth. The largest DVSA Driving Test Centre, Quedgeley.
37.2
25 25
constitute a significantly important part of the food and drink and leisure sectors being transaction of the year was this freehold Assets with strong defensive characteristics
29.5
Gloucester’s heritage, but the development the most active. Eastgate St 0 single-let industrial unit sold by Railways remain in strong demand. This freehold 0
also provides the link between Bakers Quay 16 17 18 19 20 16 17 18 19 20
Kings Walk Pension Trustees to Exeter Property Group in government-let investment was sold by
and Gloucester Quays. Downings Malthouse is Out of town, at Kingsway, Robert Hitchins September for £23.49m, 6.13% NIY. The unit Brabon Properties to Value & Income Trust
set to provide 72 new residential apartments has successfully completed the development Out of town headline rent is 241,500 sq ft and is let to Wincanton until Plc in November for £4.65m, 5% NIY. The Prime yields
together with additional commercial space of a new 24,000 sq ft food store for Lidl £psf December 2023. building provides a multi-purpose driving %
scheduled for completion later in 2022. together with a new retail/leisure scheme for 20 test centre on a 1.53 acre site and is single- 8
occupiers B&M and Pure Gym. Gateway 12 Business Park. This freehold let to The Secretary of State for Housing,
Gloucester City Council is pressing ahead 15 single-let industrial unit was sold by ProCook Communities and Local Government for 25 7
16
16
16
16
16
with the redevelopment of Kings Quarter. Paloma Capital and Chase Commercial are in a sale and leaseback to Leftfield Capital years subject to a tenant break in 10 years.
Following completion of the new bus station, due on site to commence the redevelopment
0% 10 in September for £5.15m, 5.47% NIY. The Alder King represented the vendor. 6
the demolition of the former Bruton Way of the former Whitbread site in Eastern building is 43,626 sq ft and was let on a new
multi-storey car park has cleared the site for Avenue, this being the prime out of town 5 5
20 year lease.
the next phase of the development linking retail pitch. The scheme includes planning
0 4
into Kings Square. consent for 55,000 sq ft of bulky goods retail 16 17 18 19 20
Regent House, Rodney Road. This freehold 16 17 18 19 20
space together with a pub/restaurant, drive- multi-let office was sold by Accrue Capital to
Alder King Market Monitor 2021
Alder King Market Monitor 2021
thru restaurant and hotel. Cew Capital LLP in March for £4.0m, 5.60% industrial 4.75%
Leisure headline rent NIY. The building provides 10,000 sq ft of office 5.5%
£psf retail high street 8%
refurbished period office accommodation in retail out of town 7.25%
40
the centre of Cheltenham.
30
32
32
32
32
32
0% 20
10
12
12
12
12
12
9
9
9
9
9
cinema
health & fitness 0
16 17 18 19 20
A3/A4
21 22INDUSTRIAL & LOGISTICS Take-Up
Andrew Ridler T 0117 317 1071 E aridler@alderking.com 000s sq ft
80
85
Demand for good quality industrial space Ring Road Corridor from the A4 to the M32, 60
remains strong, with a number of active and Chippenham where St. Modwen has
requirements, particularly for freehold space. recently completed the first building on its 70 25% 40
However options within the city continue to acre St. Modwen Park Chippenham scheme.
be almost non-existent. This will provide 106,000 sq ft with another 20
88,000 sq ft to follow in the autumn of 2021.
10
7.5
15
15
Supply is limited to second hand stock. The balance of the scheme can accommodate 0
There has been no speculative industrial/ buildings up to 800,000 sq ft. 16 17 18 19 20
distribution development in Bath and none
is expected for the foreseeable future with Due to the lack of supply, take-up dropped Supply
alternative uses still able to significantly back on the 2019 figure and was made up of 000s sq ft
outbid industrial and logistics occupiers. a number of smaller transactions involving 80
smaller format secondary space.
Occupiers struggling to find accommodation 60
of a modern specification are therefore The imbalance in demand and supply means
forced to consider locations outside Bath headline rentals for new space of up to 2,000
0% 40
such as east Bristol, particularly along the sq ft are now close to £10 psf per annum.
20
20
10
5
5
5
0
16 17 18 19 20
Headline rent
£psf
10
10
10
9
8
8.75
8.5
CGI of Number 1 Bath Quays.
0% 6
Bath
4
2
St. Modwen Park Chippenham.
Courtesy of St. Modwen. 0
16 17 18 19 20
OFFICES Take-Up
RETAIL & LEISURE
Tom Dugay T 0117 317 1094 E tdugay@alderking.com 000s sq ft Rebecca Harries T 0117 317 1086 E rharries@alderking.com
125
120
In common with the wider regional market, The supply of immediately available, modern, 100 Demand for smaller, lower-cost units in Bath Zone A headline rent Out of town headline rent Leisure headline rent
111
Bath’s office market has been impacted open plan accommodation within the city remains strong, particularly from start-ups and £psf £psf £psf
90
90
75
by the ongoing Covid situation, although a still remains limited. We estimate that total 13% independent operators. Restaurant occupiers
78
consistent level of demand and lack of supply supply stands at circa 94,000 sq ft which 50 are looking to occupy units that were previously 200 40 40
205
205
200
going into the crisis helped limit the effects. represents just over 12 months’ worth of take- unattainable to them, where those landlords
185
185
35
35
35
35
35
25 150 30 30
up based on the five year average. This figure are now considering all levels of covenant.
30
Take-up in Bath in 2020 reached circa 78,000 includes 23,000 sq ft over four floors at Quay 0 Footfall levels are steady and the council has
25
25
25
25
100 20 20
sq ft, circa 13% down on 2019. Take-up was House and 17,000 sq ft over two floors at 16 17 18 19 20 now pedestrianised some areas in the city
Kings Court. centre which has helped the general shopping
15
15
15
15
again partly restricted by the lack of available
14
14
14
50 10 10
11
11
11
space and the uncertainties surrounding the Supply environment. Bristol-based pizzeria Bosco is
pandemic. Available supply is set to increase during 000s sq ft preparing to open in the former CAU restaurant 0 0 0
16 17 18 19 20 16 17 18 19 20 16 17 18 19 20
2021 with the eagerly anticipated completion 125 on Milsom Place. Suit shop Suave Owl has also
cinema health & fitness A3/A4
The TMT sector remains by far the most of the South Quays development. No 1 recently opened on Milsom Street.
100
active sector within Bath in terms of the Bath Quays, the first speculative office
95
94
amount of space taken and the number of development within the city centre for more
15% 75
INVESTMENT
82
individual transactions, with the public sector than 20 years, is set to complete by the
75
70
50
also active. middle of 2021 and will offer 45,000 sq ft of Oli Stretton T 0117 317 1121 E ostretton@alderking.com
Grade A office space. Adjoining this is Newark 25
The most notable transactions of 2020 Works, where 40,000 sq ft will be offered in
0 There were only two investment transactions in 2020, both in the Value of investment Prime yields
included 24,000 sq ft let at Pinesgate, suites ranging from 120 sq ft to 5,000 sq ft. transactions %
16 17 18 19 20 office sector. This is more a reflection of the lack of supply rather than
where Civica and TrueSpeed took just over Completion for Newark Works is expected by £ms
investor appetite which is likely to subsist, albeit mirroring the national
Alder King Market Monitor 2021
Alder King Market Monitor 2021
15,000 sq ft and 9,000 sq ft respectively. The the end of 2021. 200 8
Headline rent trends in terms of sector bias and general flight to quality.
University of Bath also acquired 9,000 sq ft
189
in the ground and first floors of Lewis House Top headline rents in Bath city centre £psf 150 7
40 Queen Square House. This freehold Listed Georgian office building
on Manvers Street. remain at £31 psf. This is set to increase with
was sold by Aviva in May for £3.8m, 4.78% NIY. The building which 100 6
potential lettings at No 1 Bath Quays where a
is arranged over three floors totalling 8,672 sq ft is multi-let with a
107.3
96
30
rent of £34 psf is being quoted.
31
31
31
31
31
WAULTC of approximately 3.25 years off an average rent of £22.70 psf. 50 5
22.9
0%
20.4
20
Grosvenor House, The Square, Lower Bristol Road. This 18,546 0 4
16 17 18 19 20 16 17 18 19 20
10 sq ft single-let office building was acquired off-market by Wesleyan
Assurance in November for £6.75m, 6.18% NIY. It is let to Amdocs Ltd industrial 4.25%
office 4.75%
0 with five years unexpired at £24.00 psf. retail high street 5.5%
16 17 18 19 20
retail out of town 6.75%
city centre
23 24INDUSTRIAL & LOGISTICS Take-Up
Andrew Maynard T 01823 444879 E amaynard@alderking.com 000s sq ft
400
The first three industrial lettings on Progress at Hinkley Point C continues with 300
325
Bridgwater Gateway completed in Q3 and another key milestone reached in 2020 with
Q4 2020, whilst the construction of a the completion of the first of three off-shore 0% 200
Costa Coffee drive-thru at the entrance to tunnels needed for the power station’s
190
the business park also started on site in cooling-water system. The tunnel boring 100
120
November. machine made the 3.5km journey 33m below
105
105
the Bristol Channel to complete the first 0
Infrastructure works began on Peninsula 23, in-take tunnel in December 2020. Generally, 16 17 18 19 20
with planning progressing for the first three activity at the site ramped up significantly in
buildings totalling over 77,000 sq ft, with 2020 and will continue to do so in 2021. Supply
deals agreed with Monmouth Scientific and 000s sq ft
Somerset Willow. Construction is likely to The link road connecting Gravity to the 400
commence in early 2021. The business park M5 is close to completion and will allow the
totals 15 acres and will provide opportunities 625 acre sustainable mixed use scheme to 300
300
for roadside, office and industrial occupiers push forwards.
0%
275
over the next few years.
240
240
200
225
100
0
16 17 18 19 20
Headline rent
£psf
10
8
8.75
8.5
8.5
CGI of proposed Monmouth Scientific building at Peninsula 23.
8
8
3% 6
Bridgwater
4
2
0
16 17 18 19 20
OFFICES Take-Up
RETAIL & LEISURE
Andrew Maynard T 01823 444879 E amaynard@alderking.com 000s sq ft Andrew Maynard T 01823 444879 E amaynard@alderking.com
100
Despite a more challenging office market in Further activity also occurred with 75
The new Aldi store on the Northgate site Zone A headline rent Out of town headline rent Leisure headline rent
2020, the ongoing demand for small office completion of the Phase 2 Enterprise opened in October 2020, with a sale of the old £psf £psf £psf
80
space from the Hinkley Point C (HPC) supply Hub building and Phase 3 buildings at the 40% 50 store agreed some months ago. The expanded
chain maintained a reasonable churn in the Somerset Innovation Centre on Woodlands Bridgwater Retail Park welcomed several new 50 20 20
50
40
market with The Exchange on Express Park Business Park, Bridgwater, which will target occupiers in 2020 with Costa Coffee, The Card
19
19
25 40
17
17
15 15
42
42
42
42
nearing 100% occupancy at the end of the occupiers linked to the energy sector and the Factory, Subway, Consol Tanning Studio and a
25
15.5
15
15
15
15
15
30
15
35
year. The town centre market has also fared HPC project. 0 new Cancer Research UK Superstore opening
12
12
12
12
10 10
11.5
well given the impact of Covid-19. 16 17 18 19 20 on the site. A new Ibis hotel is expected to open
10
20
7.5
7.5
As a result of the reasonable levels of activity in Spring 2021 offering 144 bedrooms on the
7
7
5 5
10
There continues to be demand for freeholds, in 2020, rental levels maintained their 2019 Supply Woodland Business Park in Bridgwater, situated
fuelled in part by developers looking for PDR levels. 000s sq ft next to the Somerset Energy Innovation and 0 0 0
16 17 18 19 20 16 17 18 19 20 16 17 18 19 20
opportunities to satisfy the ongoing demand 100 Enterprise Centres and opposite the new
cinema health & fitness A3/A4
for rental properties to provide short term Peninsula 23 development scheme.
accommodation for workers involved with 75
75
75
HPC.
16% INVESTMENT
70
50
60
60
Oli Stretton T 0117 317 1121 E ostretton@alderking.com Andrew Maynard T 01823 444879 E amaynard@alderking.com
25
0 No transactions were reported last year Value of investment Prime yields
16 17 18 19 20 which we attribute to the pronounced effects transactions %
of Covid-19. £ms
Alder King Market Monitor 2021
Alder King Market Monitor 2021
40 8
Headline rent
£psf 30 7
20
25.6
20 6
21.9
15
11.6
15
15
9.1
14.5
14.5
14.5
10 5
0% 10
0
0 4
8
8
8
8
8
16 17 18 19 20 16 17 18 19 20
5
industrial 5%
office 7%
CGI of proposed Somerset Willow building at 0 retail high street 8%
Peninsula 23. 16 17 18 19 20
retail out of town 7.25%
town centre out of town
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