The towns of Bracknell and Wokingham have a very different industrial property offer, yet work in perfect harmony together, with steady demand and a rental tone on an upward trajectory.
Our Thames Valley industrial property experts, Charlie Nicholson and David Barden, explore the supply pipeline in both towns, and what we can expect from each, over the next three years.
Bracknell: reaping the benefits of new town status
Whilst Bracknell gained new town status way back in 1949 to alleviate the post-war London housing crisis, it continues to reap the benefits of its new town status to this day.
From that point onwards, it went from strength to strength and by the early 2000s, had become a technology, media and telecommunications (TMT) magnet. Global brands including HP, Dell, and 3M flocked to call this new corporate stronghold home.
Today, it is as popular as ever, attracting a variety of corporate occupiers – from John Lewis and Waitrose HQ on the Southern Industrial Area to more recent additions such as audio-visual technology distributor, Midwich.
The office and industrial markets in Bracknell are necessarily intertwined. It is a strong corporate location which we expect to reassert itself over the next three years.
There is a good level of industrial supply – both for mid-sized and big box industrial units, with around 240,000 sq ft of each.
Chancerygate’s 18.75-acre Network West development, adjacent to the established Western Industrial Area of Bracknell, is currently offering design and build opportunities up to 350,000 sq ft for business, industry or distribution (B1, B2 and B8 uses), or multiple units from 10,000 sq ft.
At Segro Park in Bracknell, 180,000 sq ft of industrial space has been delivered, with Midwich, a distributor of audio-visual technology, leasing a 31,634 sq ft unit in 2017, and leading tyre wholesaler, Bond International, taking a 90,000 sq ft unit in 2019.
Meanwhile, Segro’s purchase of a further 6.5-acre site in Bracknell in 2015 from German pharmaceutical company Boehringer Ingelheim, will see the delivery of a further 200,000 sq ft of urban logistics and light industrial development.
With a good supply of development stock in the pipeline and a designated industrial area around it, Bracknell has room to grow its industrial stock further still.
With the recent increase in industrial rents, employment land in Bracknell and Wokingham can outperform residential and other uses, which will support further industrial development.
Site assembly is also much easier in and around Bracknell, owing to the larger parcels of land available here, as opposed to in Reading, for example, making it the perfect investment opportunity.
The prime sites in and around the M3 and M4 are attracting the larger developers, resulting in land values close to £2 million an acre.
In some cases, industrial and shed developers have won out over residential developers in Bracknell, as was the case when Chancerygate outbid residential developers for the former Hewlett Packard site.
We expect this residential versus industrial land bidding war to continue over the next three years.
Bracknell continues to have high ratio of corporate occupiers who own their own freeholds and, as we come out of the pandemic, we may see some occupiers release value from these assets, either through sale and leaseback or disposal, which will add to land supply.
Design & build potential
For those large corporations wanting to establish an office HQ and logistics function, Bracknell continues to represent the perfect location owing to its plentiful land supply.
Industrial land supply here gives more opportunity to deliver design and builds which could address both office and industrial requirements in one location.
Many corporations wanting to locate here, have both their industrial and office HQ in Bracknell, which offers the benefit of close proximity to the motorway for goods transportation, whilst benefitting from town centre accessibility and amenities for office staff.
There continues to be a flight to industrial quality as occupiers seek a much higher specification of building, between 50,000 and 60,000 sq ft, with the relevant green credentials a must.
Developers need to be mindful of this demand profile and ensure that they are building out industrial units to the right size and specification to meet this.
In doing so, it may be possible to command higher rents because of the blend of office and industrial use, bespoke specification and greater floor area to site area ratio.
However, if delivering this sort of design and build development with higher office content, it is important to future proof the lease documentation to maximise rental values going forwards, at rent review or lease renewal.
Industrial demand has pushed rents on from where they once were, with quoting rents for mid-sized units between 10,000-50,000 sq ft sitting at £13.50 psf, currently.
Over the next three years, with new higher specification industrial developments in the pipeline, it would not be surprising if rents push upwards of £14.00 psf.
With the increase in rental tone, may come the marginalisation of some SMEs from Bracknell, as quoting rents go up. This may leave smaller businesses to rethink their location, perhaps in favour of Wokingham.
This is where Bracknell and Wokingham work in such harmony, with the latter offering a potential industrial alternative for some occupiers.
Current supply is based along Molly Millars Lane and the Fishpond areas of the town, and with a skilled workforce, train services into London and a good standard of smaller unit available, demand is increasing here and we expect this to continue. So too are rents which sit at around £11 psf currently, but it still represents a cost-effective location for the smaller business seeking units between 1,000 and 5,000 sq ft.
We are currently marketing 15 steel-framed units at Meridian Business Park in the town, which are perfect either as trade counter or R&D production, and whilst a more constrained industrial market than Bracknell owing to its size, Wokingham has a lot going for it from an industrial property perspective.
Which one to choose?
Bracknell and Wokingham work together with a good industrial property synergy between them – each offering a different mix of product and price.
Knowing which would represent the right location for your business or the best investment opportunity can be difficult, but our team of experienced industrial property experts can help.
As active property advisers in the Thames Valley market for over 30 years, we know the industrial market here like no other.
Whether you are an occupier looking to lease an industrial unit, an owner occupier seeking a design and build opportunity, or a developer or landowner seeking to deliver a new industrial scheme, our advisers can support you throughout the lifecycle of your property needs.
For more information, get in touch.