Following what was a quiet summer of activity in the office and industrial market, the end of 2019 witnessed a flurry of deals across the board, despite the uncertainty that had prevailed over the last 18 months which had negatively impacted market confidence.
With new developments in the pipeline and increasing take up across Surrey, we take a look at the state of the property market there, as activity begins to gather pace in 2020.
Good levels of office supply remain in Surrey, particularly in Staines, Weybridge and Woking, where there is approximately 500,000 sq ft of available office space currently.
In 2019, some 300,000 sq ft of office space was taken up across the county, and we are seeing demand for high quality office space continue to rise into 2020.
Whilst office demand has been inconsistent due to the political environment, occupier activity is still being driven by lease events, with additional pressure on supply from residential redevelopment, especially within Woking town centre.
Woking is a hugely up and coming area and one which is undergoing significant regeneration, with lots of general development underway, including significant investment from Woking Borough Council which is helping to provide good quality office stock in the town.
With its excellent transport connectivity and town centre facilities, Woking is very much the emerging office market as an increasing number of occupiers come out of other Surrey towns due to poor accessibility, transport issues or a lack of investment in the town centres.
However, supply of top-quality grade A buildings is still limited here and will diminish as take up continues to exceed availability.
Rising demand for office space in Woking has been underpinned by several larger deals at Dukes Court and Space in Woking, which have driven absorption.
Woking has also enjoyed great success over the past twelve months with over 115,000 sq ft of Grade A space which was taken by three main occupiers:
- McLaren: Already located in the outskirts of Woking, have now come into the town centre, taking Victoria Gate/Aviva where 65,000 sq ft was available and has been let at £33.00 psf.
- Regus: Took 38,000 sq ft at Spaces, Woking One, at £31.00 psf.
- Astellas Pharmaceuticals: Took 12,000 sq ft at Space Woking at £35.00 psf in October 2019.
Meanwhile, two large office schemes, One Forge End & Forge, are currently undergoing significant refurbishment, with substantial capital expenditure on the scheme.
And with various other large occupiers about to complete relocations to Woking, there is no shortage of pipeline transactions here.
Over the past 18 months, co-working providers have been the main drivers in the take up of space in towns and cities, and we believe this will provide further opportunities in Woking, as we look ahead.
The property market in Weybridge and the surrounding areas has continued to see high demand from local occupiers wishing to acquire property in the area in 2019.
We have seen positive activity and impressive lettings at Bourne Business Park, including 10,950 sq ft to Schindlers, 13,700 sq ft to Mundays, nearly 25,000 sq ft to Devonshire Business Centre, and 55,190 sq ft let to Astellas Pharmaceuticals.
The Heights at Brooklands has also witnessed some exciting activity, firstly with the sale of the 350,000 sq ft investment to Kennedy Wilson in January 2020, and with AXA taking 17,711 sq ft, and Dairy Crest taking 19,500 sq ft too.
Recently, Dakota was refurbished and remodelled to provide stunning Grade A accommodation and Vail Williams acted on behalf of RO Real Estate to secure the lease of 9,397 sq ft and 3,131 sq ft there to YoooServ and Robert Half, respectively, proving once more, that Weybridge remains a popular office destination.
Staines upon Thames
The Staines market remained stable in 2019, with new occupiers moving to the area and lettings totalling some 100,000 sq ft, including a large pre-let to Gartner at One the Causeway.
Total take up of over 5,000 sq ft there, totalled 118,100 sq ft in 2019, including:
- IFS (26,300 sq ft), Bourne House, £29.00 sq ft
- Tenable Software (12,100 sq ft), 5 Pinetree’s, £35.50 sq ft
- Hitachi 15,500 sq ft, 5 Pinetree’s, £35.50 sq ft
- Gartner (46,000 sq ft Pre-let), One the Causeway, £37.50 sq ft
Vail Williams also completed several key deals in the town, including acting for London & Marlborough on the lease of 7,680 sq ft to a pharmaceuticals company at Waterfront, achieving a record rent for the area.
We also concluded the lease of 10,600 sq ft to Ricoh on behalf of Legal and General at Lotus Park at £32.00 psf.
Since the beginning of 2020, Synamedia has also taken a new lease on 23,000 sq ft at One London Road, Staines.
Such levels of activity indicate improving confidence in the Surrey office market and landlords are having to work much harder to provide something different to attract high quality tenants – from impressive technology to Fitwell certification.
Industrial supply remains stable in Surrey, but stock is still limited.
The industrial market is currently fluctuating and given a lack of industrial supply here, prices are being driven up in general across the South East.
This is evident from a new scheme in Chertsey which we are currently marketing. The project, known at Chertsey Industrial Park, comprises eight brand new B1/B2/B8 units spanning 1,485 sq ft – 18,869 sq ft. Completion is due in April and we will be quoting rents of £17.50 psf – more akin to the outskirts of London, pushing rent to all time high here.
With the return of market confidence, we expect to see pressure on supply going forward.
This demand is still mainly event driven, however, we are also seeing the first signs of expansion as occupiers begin to look for better quality industrial accommodation.
So, with all this in mind, within the South-East, and particularly Surrey, we remain cautiously optimistic for what the rest of 2020 has in store.
As details of transitional trade negotiations with the EU become clearer, and with more political and economic stability, we should see Surrey market confidence continue to prosper 2020.
If you have a lease event in the next 18-24 months and would like strategic property advice to help you make informed real estate decisions, don’t hesitate to get in touch with our agency team.