Take up of industrial space across the Thames Valley and Surrey regions continues, with two or three applicants lining up to view the majority of buildings, from a good range of sectors.
There remains a significant level of logistics space under offer across the region at sites including Chertsey Industrial Park where six out of eight speculatively built units have quickly let.
E-commerce and last mile delivery demand remained high, and we do not see this changing as consumer habits continue to feed the industrial sector, with around a third of retail transactions now happening online. However, we are keeping a keen eye on the latest retail trends, which recently reported an 8% drop in online sales.
Over the past six months Yusen Logistics took 31,974 sq ft at Tyson Park near the M3 in Basingstoke on a 10-year lease where new headline record rents are being set, and in Reading, Pulleyn Transport Ltd committed to 29,061 sq ft at Worton Drive. Meanwhile, Mnzies Distribution Ltd committed to 49,811 sq ft of space at Green Lane in Hounslow.
Demand for lab and R&D space has continued to soar, biting into traditional industrial and logistics locations such as Reading, Maidenhead, Slough and Heathrow.
Polaris Medical Services Limited took 16,720 sq ft at Priors Way in Maidenhead on a 10-year lease.
Meanwhile the film industry’s exodus out of West London to the Thames Valley continues, and those who have already located here, are expanding their presence.
Studio 54, which originally took 180,000 sq ft at Winnersh Triangle in Reading are now looking at a 295,000 sq ft pre-let in High Wycombe at Junction 4 of the M40.
Pinewood Group continue their expansion at Shepperton Studios in Surrey. Once complete in 2023, it will be one of the largest TV and film studios in the world, cementing the region as a leading location for the UK and international film industry.
Meanwhile, just north of Maidenhead, plans have been submitted 167,800 sq m Marlow Film Studios, which is expected to create more than 4,000 jobs and attract global investment and prosperity to the area.
Dido Property has submitted the application, through Arrow Planning, to turn a former land infill site alongside the A404 at Westhorpe Junction in Little Marlow into a state-of-the-art film studio development.
However, following a recent study by the British Film Industry in relation to UK independent film, there are concerns that the UK’s independent film sector ‘is inhibited to the point of market failure’ .
We don’t expect this to affect the property market in the immediate term, but it is something that we are monitoring amid rising production and cast costs and crew shortages.
As build costs continue to ruse, we will see rents increase in order to sustain the pricing of constriction and the purchase of land. We are beginning to see some businesses squeezed out of the West London and Heathrow/Park Royal markets towards the Thames Valley as a result.
To date in 2022, record headline rents continue to be achieved, creating an incredibly competitive market in redevelopment / development terms.
There remain pockets of affordability in places such as Camberley/Frimley and north to Wokingham or further west to Newbury and Swindon, however places like Park Royal are seeing rents compete with offices at £30 psf on a par with offices.
Where planning permission has been achieved and schemes are building out, we have seen record rents at places such as Tyson Park in Basingstoke where we are seeing £11.50 psf achieved.
With Revaluation 2023 on the horizon, we are expecting to see a significant impact on industrial occupiers.
We expect some businesses will struggle in certain locations amid rising rents and business rates hikes, so there are choppy waters ahead for some businesses in the industrial sector.
Visit our Revaluation 2023 Hub for more information, and our business rates experts will be able to help.