|
|
 |
|
|
 |
Commercial Property News For The North West - November 2011
|
To view our extensive range of commercial Office and Industrial properties
that are available to buy, lease and rent in the North West area click here:
|
|
|
|
Holding up
|
 |
|
| It may surprise the more
pessimistic forecaster in the UK,
but the regional commercial
property market is holding up
well and is set to at least match
last year’s outcome.
Among the major cities,
Manchester has the best balanced
market, helped by the scale of
its economy and strong entrepreneurial
spirit as exemplified by
Media City and Spinningfields.
What is happening is that the
downturn in the UK economy is
providing a test for all regional
economies and markets and
those with the greatest resilience
are emerging as stronger entities.
To some extent the fierce
competition between
Manchester’s two football
teams illustrate that spirit.
Analysing the first nine
months’ figures for regional
office markets, Jones Lang
LaSalle (JLL) expects aggregate
take up by the year end to equal
2010. JLL notes that in the third
quarter rents in Manchester
increased by 5.3% on the
previous three months and the
Grade A vacancy rate is only
2.1%. Given the tough market,
those are impressive figures.
Even so, Peter Skelton of
Lambert Smith Hampton said:
“The market is extremely quiet
and it appears that a short term
approach has returned bringing
a lack of decision making.
That contrasts with the start
of the year when there was
expectation that we were
overcoming the financial
problems in the UK.”
In his view, the office market
lacks direction and there is no
confidence that it has reached
the bottom. One of the future
problems could be the amount
of property that will be released
by the banks holding it because
of bad loans.
So far, financial institutions
have been unusually careful in
the release of this property but
some is being filtered out,
notably from Irish sources.
In fact, the overall picture of
the market can be painted in
brighter colours because of
planned new development and
demand from large companies.
An indication of the demand
is that there are requirements
for at least 27,870 sq.metres
(300,000 sq.ft.) of Grade A offices,
led by BUPA with a need for
13,006 sq.metres (140,000 sq.ft.).
The impetus is that a majority of
its leasing contracts end in 2015.
Another major requirement is
from Jacobs Engineering for a
regional headquarters of 9,290
sq.metres (100,000 sq.ft.). In
this case there is the question of
whether the company takes
existing space or goes for the
option of design and build. Also
in the market for a large office is
the insurance company Aviva. |
| Top |
|
Attracting investors
|
 |
|
| F&C Reit Asset Management has
bought the 7,060 sq.metres
Boulton House, Chorlton Road,
Manchester. F&C’s Daniel
Plummer said: “We recognise
Manchester attracts top inward
investors and is a continuing base
for existing businesses resulting
in a strongly performing
occupational market.” Greg Ball of
Jones Lang LaSalle, letting agents
on the property, added that F&C
“take a competitive approach to
quoting rentals and offer flexibility,
as we intend to subdivide one
floor into small suites.” |
| Top |
|
Going bust
|
 |
|
| Judging from the latest figures
for business failures, the
economy is having a hard time
picking up speed in the region.
According to Equifax, the failure
rate of businesses in the North
West increased by 9.1% in the
third quarter compared with the
same period of 2010. In fact,
that is half the national rate.
To some extent the figures
should not surprise since
retailing has had a bad period
with a 41.8% rise in failures.
Mark Nuttall of Equifax
commented: “The North West
has seen failures creep up by
10%, which highlights the
overall UK picture and suggests
that businesses everywhere
need to remain cautious. The
reality is that businesses are
continuing to find it much
harder to keep their heads
above water as the economy
fails to pick up.” |
| Top |
|
Axa build
|
|
|
| Axa Real Estate Investment
Managers are likely to be one
of the gainers from the current
market having received planning
permission for the £50 million
office scheme at St Peter’s Square.
It manages this property on
Dickinson Street, fronting
St Peter’s Square, for the
Co-operative Insurance Society
and will now develop a property
with a 12 storey structure of
10,033 sq.m. more than double
the existing building. WHR and
CBRE are lettings agents for
a project that apparently
depends on a pre let to trigger
construction. The property will
meet the top BREEAM standards
on sustainability. Axa’s Dorrien
Thomas said: “In recent years,
Manchester has firmly established
itself as England’s premier
business location outside London
and we are confident that the
new development’s prime city
location, together with the quality
of the space, will make it an ideal
destination for local, national or
international businesses.” |
| Top |
|
In Brief #1
|
 |
|
| In the largest letting in Sale
this year, Smooth Financial
Consultants Ltd have taken
14,242 sq.ft. (half a floor) in
Jackson House. Canning O’Neill
are joint agents with Savills
and the landlord is Commercial
Estates Group. Conrad O’Neill
commented “Smooth wanted
to stay in Sale and Jackson
House enables them to get
everyone on a single floor,
ideal for their telesales style
operation and it also gives
them good expansion options.”
Muse Developments has
submitted detailed plans for
the first phase of its £220
million Talbot Gateway
scheme in Blackpool, which
includes an 11,613 sq.metres
(125,000 sq.ft.) office for the
council. Other elements in the
project are a refurbished multi
storey car park |
| Top |
|
Catering for the media
|
 |
|
| In the competition to attract new
investment, Manchester has
stolen a march on many cities in
the UK and Europe by having a
major new media complex in
Salford Quays.
The scheme by Peel that has
brought in the BBC and ITV is of
such a size that it has impacted
on the whole UK media industry
to the point where a wide range
of companies catering for media
want to be located in the region.
This potential has prompted
Canning O’Neill to start a new
company focusing on the needs
of the media, a sector of the
economy that was already
thriving in the region with a
considerable history, including
being the most important
newspaper centre in the north
of England for many years
Mark Canning said: “We have
seen a dramatic increase in
enquiries from media companies
and realised there was the
potential for a company focused
on the industry. In my view, this
is the most important trend I
have seen in my 22 years in
Manchester.”
Among the initiatives from
Canning O’Neill is a website
devoted to the media industry
This is not something that has
come out of the blue, because
they already had considerable
experience of dealing with
media requirements.
“We have been involved in
filming, notably at the Soapworks,
and are familiar with the needs
of media companies,“ said Canning.
The creation of a new company
at a time of tough economic
conditions speaks for a degree of
optimism. Another new company
is Capital & Centric which brings
together two North West
developers, Tim Heatley and
Adam Higgins. Both have
considerable experience, with
Heatley having been a director
of Modus while Higgins has been
with Peel, Ask and Manchester
Property Alliance Group.
The company’s strategy is to
build a portfolio organically
without exposure to excessive
debt. Heatley said: “The current
market provides an opening for
companies run by individuals
with extensive experience but
without the legacy of servicing
debt with their portfolio.” |
| Top |
|
Pannone in the market
|
|
|
| Yet another major Manchester
based law firm is seeking a large
new headquarters in the city.
Pannone wants to move out of
its Deansgate building by the
spring of 2014 and is using p3
to find a site of 8,826 sq.metres
(95,000 sq.ft.). It has 620 staff in
Deansgate, Hale, Alderley Edge
and London. Pannone Managing
Partner, Emma Holt, said: “We
have spent a great deal of time
this year finalising our strategic
growth plans to position the firm
to capitalise on opportunities in
the evolving legal market.” She
indicated that Pannone might go
for two properties in the city
centre to cope with its needs. |
| Top |
|
Backing Birchwood
|
 |
|
| Cantt Pak has added to its
holdings in Birchwood Park,
Warrington by buying
Washington House and Allday
House advised by Pin Property
Consultancy, whose MD, Nasira
Majid, won Woman in Property
and Outstanding Business
Woman of the Year awards at
the first North West & Isle of
Man Women in Business
Awards.
The two buildings total
9,755 sq.metres (105,000 sq.ft.)
with Washington House occupied
by URS, an engineering
consultancy, while Allday
House is empty. Imran Younus
of Pin said: “We will soon
announce details of the
refurbishment programme that
will totally transform Allday
House. We have already had
interest from potential
occupiers.” DTZ acted on the
acquisition.
Also in Warrington, Allen &
Appleyard has taken the 1,505
sq.metres (16,196 sq.ft.) Unit 3,
Taurus Park, Europa Boulevard. |
| Top |
|
In brief #2
|
|
|
| At Churchgate House, (part of
the Knowledge Corridor),
owned by CBREGI, London
Scottish Bank has taken 743 sq.m.
through JLL. Ian Harris of CBREGI
said: “We are close to completing
a further letting on the ground
floor and there is further space
of up to £1,858 sq.m. in the
Grade II listed building.” |
| Top |
|
Caudwell joins Prince
|
 |
|
| The role of local entrepreneurs
in regenerating their areas has
been a key factor in many
parts of the UK, not least in
the North West through John
Whittaker of Peel.
Now we have John Caudwell,
who created a successful mobile
phone business employing
thousands in Stoke-on-Trent,
with his involvement in the
conservation and regeneration
of the Middleport Pottery in his
home town.
This has also become another
project for the Prince of Wales’
charity, Tthe Prince’s Regeneration
Trust. The objective is to create
local jobs, attract new business
to the area and ensure that
production of the Middleport
blue and white Burleighware
remains in Stoke.
“In an era of invisible and
largely electronic economy, it
is sometimes forgotten that
everything we know today was
built on an industrial and
manufacturing revolution, which
bred incredible craftsmen and
products and made Britain a
manufacturing powerhouse.
Coming from an engineering
background myself, I really
appreciate the skills required in
making and producing quality
products,” Caudwell said.
He added that “nowhere
on earth are the skills and
craftsmanship of working with
clay, water, heat and colour so
deeply imbedded in the DNA of
the population and it is crucial
that this is preserved in Stoke.”
Stoke already benefits from
the skilled development by
St Modwen, which has now
submitted a planning application
for the latest phase of the Etruria
Valley development, an area
which is at the heart of the city’s
pottery history.
This will see an increase of
16 acres in the Etruria Valley
Business Park, which is part of
the wider Festival Park area,
once the home of the Shotton
Iron and Steel Works. The joint
venture of St Modwen and the
city’s regeneration company
aims to build a mixture of
offices, manufacturing and
storage space.
Since the regeneration plan for
the area was launched in 1988,
there has been development of
125,415 sq.metres (1.35 million
sq.ft.) which has included a large
contact centre for Vodafone and
a new factory for Wade Ceramics. |
| Top |
|
Gateway starts
|
 |
|
| With funding agreed, preliminary
work is starting on the Mersey
Gateway project that will bring a
six lane toll bridge between
Runcorn and Widnes. Steve
Nicholson of Mersey Gateway
said: “The agreement represents
the best possible deal for the
public purse and means that we
can focus on delivering a project
that will bring benefits to local
people, commuters and businesses
across the region.” It comes at a
time of increased development
activity in the area, epitomised by
Peel getting the green light for the
£175 million Trade Centre in the
Wirral Waters scheme at
Birkenhead Docks. Also in
Merseyside, Barnfield Centric, a
joint venture of Capital & Centric
and Barnfield Construction, has
started building the 7,618 sq.m. at
the Estuary Banks Business Park,
Speke, South Liverpool. The scheme
has been helped with £2.54
million from the European
Regional Development Fund.
The twenty hybrid units can be
used for offices, research &
development, light industrial and
warehouse accommodation and
come in a variety of sizes. |
| Top |
|
In brief #3
|
|
|
| Moorfield Group (Moorfield),
on behalf of the Moorfield
Real Estate Fund II (MREF II),
has today announced the
acquisition of The Towers in
Didsbury, South Manchester
for £47m from Wereldhave.
The opportunity was identified
through Moorfield’s joint
venture partnership with
Manchester based Property
Alliance Group, who will
be Moorfield’s property
management partner in the
implementation of the JV’s
business plan. |
| Top |
|
Branson
|
 |
|
| If there is one characteristic
that defines the North West,
then it must be optimism.
While the property professionals
recognise the problems of
overcoming the effects of the
economic downturn, there is an
underlying confidence among
them that this can be done.
Recession or no recession,
Peel went ahead with the
Media City and is now casting
its spell on Liverpool with
the Trade Centre and Wirral
Waters. And how success
breeds success.
Canning O’Neill have seen
such an increase in demand
from media companies to be
near the Peel development
that they have started a new
company to cope with it. In
effect, we are seeing the
emergence of a major new
media cluster. In itself that will
foster expansion and is good
for the property industry as
demand for space increases.
Axa provides an example
of the start of another
development cycle in the
centre, although it says it
needs a pre let before
construction can start. Given the
amount of large requirements
and the low Grade A vacancy
rate, that does not appear to
be too high a hurdle.
It is now more than a
decade ago that the view
started to gain ground in
Manchester that it should forget
about London being its main
competitor and concentrate on
matching continental European
cities. It would appear that it is
achieving this. |
| Top |
|
|
|
|
|
|
|
|
|
|