Office Letting in Thames Valley Rising

The recent JLL research on the M4 western corridor office market reveals that office lettings in the first half of 2019 topped 1m sq ft – the third successive year that take-up volume has increased.

A large proportion of the moves agreed to summer 2019, came in west London, which accounted for 433,000 sq ft of deals. The rest of the Thames Valley accounted for 567,000 sq ft of office transactions. Reading was the most active market with 225,000 sq ft of take-up, followed by Basingstoke (130,000 sq ft) and Hammersmith. Virgin Media, Sanofi and Ericsson all moved to Reading in 2018. There were 70 medium/large office moves in the wider Thames corridor in the first 9 months of 2019.

Large deals signed included Sovereign Housing Association taking 65,000 sq ft in Basingstoke for a new HQ, Bottomline Technologies taking 58,000 sq ft in Reading and Li Fung agreeing a deal for a 50,000 sq ft move to White City, London, W12. There were smaller moves involving Gartner in Staines, GTT Communications, Eteach, MyWorkSpot and Orega. The technology, media and telecom (TMT) sector was the most active with 25% of space taken, while the serviced office sector was relatively subdued.

JLL also draw attention to the growing life sciences sector. The White City area has recently attracted office deals from Novartis, Autolus, GammaDelta and Synthace. Metropolis is tracking up to 20 confirmed and potential requirements in this sector.

Across the Thames Valley, Metropolis is speaking to nearly 900 office occupiers that have lease expiries approaching in west London, Surrey, Berkshire and Buckinghamshire in the next two years.

Just over 800,000 sq ft of speculative office space has been completed so far during 2019, but this compares to over 1.7m sq ft in previous years. In the first half of 2019, some 700,000 sq ft of office space went under construction, although much of this was in refurbishments. Mapletree is speculatively developing 400 and 450 Longwater Avenue, Green Park, Reading, both buildings will each comprise 114,000 sq ft. In addition, there are major refurbishments taking place at Arlington Business Park and Thames Valley Park.

Agents say that the shortage of ready-to-occupy new office space is restricting the number of large office moves in the Thames Valley and is leading to a rising number of pre-lets.