Market Insight

Slough: The changing face of the Thames Valley’s industrial stalwart

Slough has been at the heart of the industrial property market in the Thames Valley since the 1920s when The Slough Trading Company Ltd bought the former military repair depot on the outskirts of the town for £7 million.
July 13, 2021
Today, the site spans some 486 acres with 7.5 million sq ft of accommodation for around 500 businesses, with a working population of approximately 20,000 people.

It has become one of the largest privately owned business parks in Europe and home to the second largest concentration of data centres in the world.

Owned by Segro, a longstanding client of  Vail Williams, Slough Trading Estate has developed a reputation as a world-class location for business and has recently just celebrated its 100th anniversary.

What does Slough have to offer the industrial occupier?

Located at Junction 6, 7 & 8/9 of the M4, Slough is strategically located with ease of access to West London and the Home Counties. This strategic position has enabled it to become the most successful industrial location in the Thames Valley, outside London and the M25.

Slough Trading Estate lies at the heart of Slough’s industrial offering and is one of the reasons for Slough’s success as an industrial location, becoming home to the likes of Mars, Telefonica O2, Ferrari, DHL, Lanes Group and UCB.

Now, as Slough’s industrial demand profile evolves, we are starting to see increased competition in the industrial market here, which is having an impact on the supply pipeline.

One of the UK’s best commuter towns with unrivalled transport connectivity and the benefit of Crossrail, Slough has become a data centre hot spot, which is proving to be a huge success story for the town.

With its own power station and multiple power sources, Slough Trading Estate ticks all the boxes for data centre occupiers.

How has its success impacted rental tone and land values?

As ever, with success always comes the potential for challenges, and this can be said for the ‘traditional’ industrial occupiers in Slough. Data centres are now competing with traditional industrial land supply and this is impacting industrial stock supply, rental tone and land values.

Rents have hit a record new high in Slough in recent months and we anticipate they will continue to increase and break the £20.00 psf threshold in the next 12-24 months.

Meanwhile, land values have also surpassed expectations at £3 million per acre, with developers like Panattoni finding themselves in competition with residential developers to buy sites like the former AkzoNobel manufacturing site north of the town.

The 30-acre site will be developed out as a mixed-use industrial and residential development, creating competition for Slough Trading Estate. However, industrial supply is still expected to remain tight for the foreseeable future.

Given where rents are and where they are likely to reach, it is not inconceivable that we could see secondary out of town offices redeveloped for industrial/data centre stock, like we have seen with the Hewlett Packard site in nearby Bracknell, such is its ability to compete in the market.

What does the future hold?

Over the years, Slough’s industrial offering has matured from demand for low eaves post-war manufacturing units, to becoming a mid to large box industrial location to meet occupier needs. But this demand profile is evolving again.

Slough has, and always will be, an integral part of the Thames Valley’s industrial property market, and together with the town’s exciting regeneration plans, the town is well placed to continue to excel.

But the industrial market here is changing. Occupier needs are evolving and developers will need to continue to deliver a good balance of industrial stock across a range of sizes and specifications, to ensure that Slough retains its crown as the region’s industrial stalwart – well into the future.

For more information about industrial property opportunities in Slough, whether as an occupier, investor, developer or landlord, get in touch.