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

A BOOST FOR Brighton
Gatwick RENTS RISING
InBrief #1
ENTERPRISING North Kent
ASSESSING Ashford
PROPERTY profile
InBrief #2
ANOTHER TRADING estate booms
USE IN Camberley
InBrief #3
Prospero Redhill Flude

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Kent, Surrey & Sussex Commercial Property News - Friday, June 23, 2017

Issue #53

A BOOST FOR Brighton

Kent, Surrey & Sussex News

Inspired by the momentum that is flowing from the Northern Powerhouse concept, the Brighton & Hove Council Leader, Warren Morgan, is pushing for a southern version of the economic initiative.

Morgan argues that the region needs to improve its performance and compete more strongly on the national stage.

The idea is being backed by the Greater Brighton Economic Board as well as other local government leaders in Sussex.

Councillor Dan Humphreys, Chairman of the Greater Brighton Economic Board and Leader of Worthing Borough Council, said: “It is now time to increase our ambitions to work with government to ensure that businesses and residents in Sussex are able to keep playing their vital role in the national economy”.

Cllr Morgan’s view is that the Southern Accelerator could help bring improved rail and road communications and speed the development of biotech, digital, engineering and other areas “where we aim to compete globally”.

While this is a logical concept, there is still the problem of a shortage of Grade A office and industrial space. After letting space to a local travel company, 15below, Emma Hands of Stiles Harold Williams said: “It’s great to see a local company growing in Brighton but thi s letting highlights the lack of stock in the city because 15below has been looking for more space for some time”.

What is available in Brighton is relatively small office space, such as 714 sq.metres (7,685 sq.ft.) in the newly refurbished Locks View, Brighton Marina.

Obviously, the city is attractive to investors and Savills’ Charities Property Fund has paid £11.2 million to Aviva for International Hous e, Queens Road, adjacent to Brighton railway station. The yield is 6.1% for the multi let building.

The Fund’s Angy Benitz said: “Brighton has lost approximately 74,320 sq.metres (800,000 sq.ft.) of office space since 2013 through conversion to residential use and this has put upward pressure on office rents”. In the adjacent Aspect House, also owned by the Fund, rents have risen by 30% within the past year.

There are, of course, some new schemes, such as the Eastside Business Park at Newhaven where Westcott Leach is building two 1,115 sq.metres (12,000 sq.ft.) buildings in the first phase.

Letting agents SHW and Hunt Commercial said there has been considerable interest in the properties, the first scheme in the port for years.

David Martin of SHW said: “The new Enterprise Zone covers this site and has helped attract businesses with the prospect of rates assistance over the first five years of occupation”.

Gatwick RENTS RISING

Kent, Surrey & Sussex News

The industrial market in the region has been hot for some years with a steady flow of lettings, such as UK Commercial Property Trust (UKCPT) getting four new occupiers taking 8,361 sq.metres (90,000 sq.ft.) at Gatwick Gate.

Advised by Standard Life Investments, UKCPT has achieved higher rents through lettings to airport related companies, such as Airbase Interiors and International Logistics.

Will Fulton of Standard Life commented: “These lettings have not only achieved higher rents and increased lease commitment to Gatwick Gate, but they are clear signs of the ongoing demand for logistics space in the UK”.

A further example of the strength of the market is that Goya Developments’ speculative Gatwick 55 scheme of 5,232 sq.metres (56,316 sq.ft.) was fully let ahead of its completion this March.

Nearby Crawley is celebrating the 70th birthday of the creation of the Crawley Development Corporation (a new town) and can boast the highest employment rate in the UK and the third highest wages. Like Brighton, it is losing a lot of office space to residential conversion typified by the auction sale of Stoner House for conversion.

However, the town has a number of new developments, including 5,110 sq.metres (55,000 sq.ft.) of speculative offices at the ever successful Manor Royal Estate. In the town centre, Queens Square, the historical heart of Crawley, is being refurbished.

Another town getting a makeover is Bognor Regis and after years of various ideas and proposals for regeneration, the council now has a masterplan that includes new development sites and work to upgrade civic spaces. Previous detailed plans for regeneration were hit by the economic recession of 2007.

InBrief #1

Kent, Surrey & Sussex News

Flude Commercial acted for Silvercoin Investments in the acquisition of the former nightclub site at 78 West Street, Brighton, which has been mainly vacant for the last 10 years. Planning consent for a 133 bed hotel was granted in 2016 and work should be completed over the next 18 months.

ENTERPRISING North Kent

Kent, Surrey & Sussex News

Belvedere and Erith are two areas of North Kent that are emerging as favoured locations for industrial development.

Buccleuch Property has bought a 3.8 acre site at Belvedere Industrial Estate through Wrenbridge with the intention of building a 6,039 sq.metres (65,000 sq.ft.) unit with a value of over £15 million. The estate already hosts a Lidl distribution centre and other occupiers such as Amazon and Travis & Perkins.

Ewen McLeod of Wrenbridge said: “Belvedere is quickly becoming the ‘go to’ industrial location and this development will further enhance the area’s appeal to investors and occupiers alike”.

Neil Finnie of Buccleuch said: “There is strong demand for this sort of industrial accommodation and we continue to seek new investment and development opportunities of this type across the UK”. Buccleuch were advised by CBRE and Harrisons Chartered Surveyors acted for the vendor.

In Erith, London & Scottish Property, asset manager to Regional REIT, has completed the refurbishment of three industrial units at Manor Road.

Meanwhile, the North Kent Enterprise Zone has opened for business with the objective of stimulating growth and the creation of new jobs, partly through lower rates. Since the area has considerable growth prospects this is important for three schemes at Ebbsfleet Garden City, Kent Medical Campus and Rochester Airport Technology Park.

Chairman of the Enterprise Zone Strategic Board, Bernard Spring, said: “With excellent connections to London and continental Europe, our three schemes will help innovative businesses to thrive. We are particularly hoping to attract companies in medic al technologies, advanced manufacturing, engineering and digital creative sectors”.

Paul Wookey, Chief Executive of Locate in Kent, commented: “The development of the zone will give investors and businesses a great platform from which to grow and develop”. Included in the mix for growth in Kent is the enterprise zone at Discovery Park, which is separate from the NKEZ.

Kent Medical Campus has planning permissi on to develop 97,549 sq.metres (1.05 million sq.ft.) for science and academic health users while Ebbsfleet Garden City has plans for 8,397 sq.metres (903,840 sq.ft.) metres of commercial and innovative space with the first coming onstream at Northfleet East where detailed outline plans are with Ebbsfleet Development Corporation for approval.

Rochester Airport will bring another 46,981 sq.metres (505,720 sq.ft.) for high tech engineering and manufacturing.

ASSESSING Ashford

Kent, Surrey & Sussex News

Ashford Borough Council is heralding the success of its five year corporate plan in delivering economic investment and growth.

The assessment has been made at the halfway stage of the plan but increasing growth is coming through such projects as the Commercial Quarter and the leisure complex at Elwick Place. Apart from anything else, there are substantial housing schemes, such as the 5,750 units at Chilmington Green. This mixed use scheme echoes the historical garden city concept.

Another major scheme is Clarion Housing Group’s plans for a 31 acre site at Conningbrook Lakes. Cllr Gerry Clarkson of Ashford Borough Council commented: “Conningbrook Lakes Country Park is a project to gradually transform the former quarry site next to the Julie Rose Stadium into a family orientated country park”.

Apart from a steady flow of new housing, Ashford is also seeing new commercial developments, such as Salmon Harvester’s Axiom at Orbital Park, where Howden has taken one of the units in the 5,106 sq.metres (54,916 sq.ft.) scheme which is close to the M20.

PROPERTY profile

Kent, Surrey & Sussex News

Prospero, 73 London Road, Redhill, Surrey RH1 1LP.

Location: The property is situated in Redhill’s prime office location fronting the A23 and close to the town centre and railway station.

Access: Prospero is only 30 minutes from central London by rail and 26 miles by road. Gatwick and Heathrow Airports are only 7 and 36 miles away respectively.

Description: Prospero is a new Grade A Headquarters building of 50,373 sq ft over 5 floors providing: l VRV air conditioning l High sustainability with BREEAM Excellent rating l 12 person passenger lifts x 2 l Full access raised floors l Suspended ceilings with LG7 compliant LED lighting l 87 car parking spaces l 44 cycle rack spaces l Changing rooms with showers and lockers l Roof terraces l Following the letting of the entire 3rd floor to Morrisons solicitors, the remaining availability is 3,000 – 40,000 sq ft Terms: Leasehold For further details and viewings, please contact sole agents: Tim Hodges, Altus Group 01737 243328 Rhodri Shaw/Edward Smith, Strutt & Parker 020 7629 7282

InBrief #2

Kent, Surrey & Sussex News

The classic guide to the strength of sentiment in the commercial property market often comes with auction results. So Clive Emson’s results show us what is happening in the south. Its record breaking March results with £22 million raised was followed by an 85% success rate in May.

Auctioneer James Emson said: “The demand for commercial properties continues apace and we are also seeing a growing trend for mixed use buildings as investments”.

ANOTHER TRADING estate booms

Kent, Surrey & Sussex News

While the drive to increase housing has put pressure on commercial property through conversion, in some places it is underpinning the local economy.

This can help the commercial property market, such as in Rustington, where considerable housing development has come with commercial development, such as at Store Property Investments’ Rustington Trading Estate where Topps Tiles has joined the likes of Screwfix and Howden Joinery.

It is close to the expansion of a retail park that has brought in Chandlers, the car dealer, and will also get Next and Aldi at the Manor Retail Park.

David Martin of Stiles Harold Williams said: “The trading estate has been transformed in the last few years into a much sought after trade location”.

One of the strongest residential markets in the south east is also having an impact on commercial property - the Sussex/Surrey border.

Agent Roger Coupe said the market has been “phenomenal since the beginning of the year”.

In a similar vein, the new Elizabeth Line is having a major impact on house prices right across London and is likely to follow the performance of the Jubilee Line which encouraged large scale commercial development.

A few examples of the way house prices have moved illustrate this comparison with prices doubling in Woolwich in the past ten years and close to that in Abbey Wood where one part of the line terminates. The changes in all the towns along the route have been monitored by eMoov and indicate an average increase of 80% in towns on the line.

Maidstone is sure to gain from U+1’s £100 million development of a new community with 310 homes and other amenities. The development on Royal Engineers Road is on brownfield land and includes buildings of 8 to 18 storeys.

USE IN Camberley

Kent, Surrey & Sussex News

At the heart of most town centre regeneration schemes is increased residential accommodation aimed at changing the character of the town.

In the case of Camberley, this means converting two commercial properties owned by Surrey Heath Borough Council (Ashwood House and Pembroke House) in a scheme by Berkeley for 141 new homes and retail space.

Max Poole of the architects Holder Mathias, said: “Our design approach draws inspiration from traditional materials used locally”.

At the nearby Frimley4 Business Park, Deepwater EU, the anti corrosion engineers, have taken a unit as the home for their UK operations.

Geoff Camm of Deepwater said: “It’s a super location and the very high spec of the buildings impressed me. The good road links to the M3, M25 and Heathrow were crucial to us”.

Councillor Muschamp of Rushmoor Borough Council said: “The business park is an important flagship centre for our local economy and is at the heart of the M3 Sci Tech Corridor, an economic asset of national importance”.

Improving the quality of town centres, as Camberley aims to do, is now widespread. In the case of Croydon it has launched a Design Review Panel that mirrors similar initiatives across London.

Fidel Miller of Stiles Harold Williams commented: “Anyone familiar with Croydon’s street scene and skyline would understand why it has joined 12 other London boroughs with established panels”.

Margate is well on its way with its regeneration programme including the investment in the iconic Dreamland Leisure Park where the latest event is the switching on of the lights which adorn the side and front and highlight the opening of the second phase of renovation.

This is simply not just about leisure facilities but together with the Turner Contemporary has increased the business activity in the town centre.

InBrief #3

Kent, Surrey & Sussex News

The Franciscan International Study Centre in Canterbury, which is close to the University of Kent, is being sold through BTF Partnership for £3.5 million.

The 1,394 sq.metres (15,000 sq.ft.) main property is on a 3 acre plot and has a substantial library and meeting rooms. In addition there are five residential units with 43 bedrooms. Canterbury has four universities and 46,000 students, together with language and independent schools.

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