Kent, Surrey & Sussex

Property News Index

Read about the latest news, views and developments in the commercial property world from our industry expert.

Change UNDERWAY
Back ON TRACK
InBrief #1
Tackling THE PROBLEM
Speeding UP
InBrief #2
Brighton HAS AMBITIONS
Setting THE PACE
Knight Frank Henry Adams

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Kent, Surrey & Sussex Commercial Property News - Friday, March 22, 2019

Issue #58

Change UNDERWAY

Kent, Surrey & Sussex News

Like all regions in the UK, the three counties face a period which is changing the shape of the commercial property industry.

For a start the traditional High Street is under pressure as shopping habits change which has also impacted on the warehouse and logistics markets as retailers respond.

As part of the ongoing story of change, offices are also in the midst of a revolution with the move to flexible space and innovation around the office model.

John Williams and James Rankin of Instant Offices highlight the shift of business to the service based model which is coming from digital innovation with its impact on costs and business structures. They said: ”Many industries are now unrecognisable from their previous iteration only a decade ago“.

Business planning is now based on shorter periods with the time frame shortening all the time, bringing its own challenges to the commercial property business.

All of this is taking place within a business world where SMEs are playing a bigger role because of their ability to react quickly to change.

An analysis by Opus Energy said that UK SMEs plan to increase their headcount by 21% over the next 12 months, another factor in the demand for flexible commercial space, whether it be industrial or offices. Oddly enough, half of the retailers in the survey also planned to increase the number of people they employed.

` Nikki Flanders of Opus commented: ”The growth predictions may come as a surprise to some, given the current political climate and economic trends“.

Another change is the way local authorities are using the cheap finance available to them through the Public Works Board to buy commercial property using the rental income to offset the decline in direct government funding.

Ian Mercer of Bruton Knowles understands that the public sector has played an active role in regenerating town centres, but asks is there more they can do? With some reports suggesting that 100,000 shops could be left empty within the next decade Knowles suggests that ”the public sector has a fantastic opportunity to lead the way by putting a clear strategy in place and regenerating town and city centres“.

Knowles argues that the public sector also has to put in place integrated transport systems, including trains, buses and trams ”which all need to be readily available to allow easy access to the area“.

Brighton & Hove City Council clearly believes in Knowles’ views and has paid RO £6.8 million for Phoenix House in Brighton, advised by Knight Frank and Womble Bond Dickinson.

Back ON TRACK

Kent, Surrey & Sussex News

After a quiet period, the development pace is picking up in Dartford with Tritax Big Box Reit and its development partner, Bericote Properties, at the 118 acre Littlebrook site.

It now has planning permission for a 41,827 sq.metres (450,240 sq.ft.) crossed deck logistics facility. Tritax said this is one of London’s largest big box sites.

At The Bridge, Dartford, Buccleuch Property and Wrenbridge and have started construction of a speculative scheme of 4,212 sq.metres (45,338 sq.ft.) industrial scheme to be called the Quadron. Jeff Wilson of Wrenbridge said: ”The proposed unit sizes are exactly what markets need at the moment“.

InBrief #1

Kent, Surrey & Sussex News

Kent based agents Watson Day are celebrating their 30th anniversary at the end of March having been awarded EGI’s Kent’s Most Active Agents for both 2018 and 2019. Over the last 12 months, Watson Day has transacted approximately 500,000 sq.ft. of commercial space, an increase of 25% on the previous 12 months.

Overall, the market in Kent has experienced strong take up with limited stock leading to a highly competitive market and a number of new speculative schemes. Rental values have risen by up to 100% over the past 5 years.

A landmark has been passed with the completion of the core structures in the world’s tallest modular towers of 38 and 44 storeys by Tide Construction in Croydon. Christy Hayes of Tide said: ”It is clear that modular is the future as this method of construction can quickly instal units of high quality architectural design in a safe and controlled environment“.

Tackling THE PROBLEM

Kent, Surrey & Sussex News

West Sussex has embarked on an initiative to rejuvenate and revive its towns.

This is being spearheaded by West Sussex County Council Leader Louise Goldsmith with a wide range of organisations, including the Local Enterprise Partnership and business groups. She said: ”We have got some amazing historic towns across the county and a wonderful city in Chichester, but things are changing for towns and we need to make sure we are in the fore to bring vibrant towns“.

The problem in places like Worthing and Bognor is clear cut, with an increase in the number of empty shops over the past five years. This leads to dereliction and a loss of confidence that fuels the decline. So a major task of revival.

In contrast, industrial property demand is buoyant. Two warehouses of 8,018 sq.metres (86,305 sq.ft.) and 4,164 sq.metres (44,819 sq.ft.) together with a 0.67 acre plot at Chichester Business Park, the former RAF fighter base of Tangmere, have been sold through Lambert Smith Hampton and Flude Commercial to Aberdeen Standard for £16 million.

Tom West of Seaward Properties, joint venture business partner at the park, said: ”We will re-invest the money raised in the park, where we have already secured a pre-let to JRP Distribution and will soon be submitting a planning application for a new phase of industrial and warehouse units“.

Jerry Vigus of LSH said: ”The new owners were undoubtedly attracted to the park’s growing reputation as one of the best sites in West Sussex for industrial distribution and logistics. Investor confidence remains high and continued demand for industrial investment opportunities“.

One new arrival at the park is Leki Aviation, a Danish company which is relocating from Lavant after buying a 2,626 sq.metres (28,270 sq.ft.) building that was formerly occupied by Carte Blanche.

Mark Minchell of Flude said: ”Leki has been looking for a relocation for some time and we are pleased they have chosen Chichester Business Park. Leki plan further development on the site“.

Speeding UP

Kent, Surrey & Sussex News

Rail transport is an important factor in development in the three counties so the £67 million upgrade of the main line to Brighton, giving better services, is important to the city’s ambitions.

An example of the improved outlook in Brighton is that construction has started on two warehouses totalling 729 sq.metres (7,850 sq.ft.) by Endeavour Holdings in Portslade, the first speculative scheme in the area for 15 years.

David Martin of agent SHW said: ”It is the first new scheme in the area since St Joseph’s Business Park in Hove and the level of interest shown reflects the extreme shortage of high quality industrial and warehouse stock in Greater Brighton. Brighton has been the poor relation in terms of new development, despite almost doubling industrial rents“.

SHW, together with Vail Williams, is also the agent for Tungsten Park, Handcross being developed by Tungsten Properties in a 7,800 sq.metres (83,965 sq.ft.) project, half of which has been pre-sold to Pets Corner and the rest sold to a private investor.

Tim Hardwicke of SHW said: ”Demand for high quality units in the south east continues to be high while a combination of factors has resulted in wholly inadequate supply“.

Stephen Oliver of Vail Williams commented: ”Pets Corner is seeking opportunities for high quality industrial and warehouse property in the area“.

InBrief #2

Kent, Surrey & Sussex News

Lansbury Business Estate in Knaphill, Woking has been busy strengthening its links to local businesses through the local newsletter as well as hosting a lunch where local businessmen could voice their concerns regarding the coming European political changes to Woking MP, Jonathan Lord.

The Estate has had some important new lettings, including Paul Fassam Geomatics establishing their UK base there and High Level Photography moving to a 2,000 sq ft suite on the Estate from Fairoaks airfield.

Brighton HAS AMBITIONS

Kent, Surrey & Sussex News

Brighton is going through a period of real debate about development and is assessing major plans for future growth.

The long term view is coming through a partnership between Design South East, Brighton and Hove City Council and Design Brighton. This forum brings together architects, planners and others to consider the future shape of the city.

Design Brighton plans a week long event in early 2020 celebrating the city’s built environment and to promote Brighton’s global reputation as a city that has design and diversity at its core.

That means showcasing the city’s designers, producers and educators to provide a strong network for local businesses and communities.

One of the problems the city has encountered in the past is a lack of new commercial development, either offices or industrial at a time when it has a vibrant media and tech sector. On the other hand the vacancy rate in the city retailing is below the national average at around 10%.

The challenge of meeting the demands for new commercial space at a time of insatiable demand for housing is illustrated by a planning application for a former industrial park near Hove railway station into an urban village.

The plan comes from a joint venture of Moda Living and Apache Capital Partners, together with LaSalle Investment Management.

This is the city’s largest brownfield site and will be a £262 million development with 800 homes and commercial space as well as new open areas and nature trails that will tie into the wider area for residents.

Once completed, the scheme on the nine acre Sackville Trading Estate and goods yard, will be a multi generational community joined by a series of new streets and squares. This is a well established model in the United States, where renters and retirees live alongside each other in garden communities.

The commercial space totals 5,388 sq.metres (58,000 sq.ft.) and includes retailing, leisure and live-work units. In addition there will be health and wellbeing facilities.

Tony Brooks of Moda commented: ”This project is a major step in developing our brand nationally and in the south of England“.

Setting THE PACE

Kent, Surrey & Sussex News

Ashford is basking in a strong economic performance and a string of eulogies from leading magazines and newspapers.

They all give credit to the astute business approach of the council in pushing commercial property development and transforming the town in a way few other urban centres in the UK are matching.

Both the Economist and the New York Times (yes) praise how the council’s policies are accelerating economic growth that has stimulated private investment in key schemes.

Such is Ashford’s pride in its achievements that, together with Caxtons Chartered Surveyors, and utilising information from the Kent Property Market Report, it has published its own market review.

Proof of the impetus that resulted from the investment of £520 million is that some office and retail rents have risen by 11% in the past year. On top of this residential values have jumped by 26%.

What has helped Ashford is the international railway station for Eurostar and high speed trains.

Later this year Junction 10a on the M20 motorway will open, further improving road access.

Perhaps the key scheme was the development of Elwick Place in a joint venture by the council and Stanhope with a cinema, Travelodge hotel and restaurants.

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