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Kent, Surrey & Sussex Commercial Property News - Thursday, November 16, 2017

Issue #54

Transport THE KEY

Kent, Surrey & Sussex News

As in other parts of the south of the UK, the new emphasis on road improvements is proving to be a boon to commercial property in the three counties.

At the moment this is the one certainty for the slowing UK economy, partly because of the worries about Brexit which appears to have taken a toll on new commercial construction.

Commenting on recent poor construction statistics, Blane Perrotton of Naismiths said: “Demand for commercial property construction has taken a substantial hit as larger companies activate Brexit contingency plans and smaller firms hold off on plans to scale up their premises.

On the frontline, we are seeing a spike in the number of developers seeking to convert office buildings into residential units”.

He highlights the growing reluctance of banks to lend on property development but also the higher inflow of foreign investment because of the weaker pound. The number of new road schemes is impressive and will open up new areas for development.

The main schemes are:  Bypass around the bottleneck of Arundel costing £135-£260 million;  Further along the A27, upgrading junctions and parts of the road between Worthing and Lancing;  On the eastern section of the A27 between Polegate and Lewes a variety of improvements costing £75 million. Like all the schemes there will be improved cycling facilities;  The all important M23 will become a smart motorway between the M25 and Gatwick, adding an extra lane in each direction;  One major road improvement that is already open is the dual carriageway between Tonbridge and Pembury which will help communications to Hastings and the East Sussex coast which has been a major hindrance to growth and development for decades.

The importance of new roads is illustrated by Gidds Pond Way which opens up the next phase to be developed on the eastern side of the 92,900 sq.metres (1 million sq.ft.) Kent Medical Campus. Gary Watson of JLL who advises on the campus said: “It’s great to see the road open as it demonstrates our commitment to bringing health, science and education jobs to Maidstone. Investment in roads will help us to reach our target for making the campus home for up to 4,000 new jobs”.

Watson added that there had been an increase in enquiries in the past few months for space on the campus, which aims to be the UK’s first academic, health and science centre aimed at life science companies, specialist residential and rehabilitation care as well as higher education training facilities.

HERE COMES IKEA

Kent, Surrey & Sussex News

One significant new development planned in West Sussex is for a 32,000 sq metre (344,445 sq.ft.) IKEA store in a £1,150 million mixed use scheme at Monks Farm, Lancing.

Interestingly, the developer of New Monks Farm Development is a subsidiary of Brighton & Hove Albion FC. Its plans include 600 homes (30% of which would be affordable), a primary school, and a community hub as well as the IKEA store.

The store would provide the full range of IKEA products alongside a restaurant, créche and children’s play area and it aims to create 430 jobs.

IKEA’s Tim Farlam said: “This presents a great opportunity given its scale, accessibility and location”.

The site is close to Shoreham Airport which has a reasonable amount of commercial properties and which could be underpinned by the new scheme (including training pitches for Brighton & Hove FC as well as a country park and new roundabout on the A27). If the scheme is approved then construction could start in 2019.

BESIDE THE seaside

Kent, Surrey & Sussex News

For years the viability of property in the UK’s seaside resorts has been questioned because of the flow of people holidaying abroad.

Yet here we have the 26 bedroom Georgian Burlington Hotel, Worthing selling through Christie & Co for £1.5 million.

It has been run by the present owners for the past 15 years and has now been bought by a local hotel operator.

Andrew Moore of Christie said: “The Burlington Hotel has a fabulous location, enviable reputation and beautiful period building which has been subject to much investment and improvement in recent years. We received significant interest as the hotel market remains buoyant across the south east and there is a huge demand for similar freehold properties”.

InBrief #1

Kent, Surrey & Sussex News

One of the business parks where SHW is letting agent (together with Hunt Commercial) is Eastside Business Park, Newhaven. The first phase with two 1,115 sq.metres (12,000 sq.ft.) warehouses is close to completion.

David Martin of SHW said: “This is the first new scheme in Newhaven for a number of years”.

PLEA FOR more space

Kent, Surrey & Sussex News

Like so many cities and towns in the UK, Brighton & Hove have the major problem of a lack of prime office space.

Stiles Harold Williams, which was founded in 1798 and has branches across the south east, including Brighton, Crawley and Croydon, is re-branding as SHW.

Managing Partner, Martin Clark, said: “Having a strong commercial management business is a great advantage for the firm, giving us a solid foundation”. The firm manages a commercial portfolio of £1.6 billion which provides half its annual turnover of £12 million.

SHW have analysed the current market in the context of “Brighton & Hove being a vibrant commercial city restricted by a lack of new space”.

SHW makes the following points:  There is about 445,920 sq.metres (4.8 million sq.ft.) of office space in the city of which 13,935 sq.metres (150,000 sq.ft.) is vacant, much of which is of low quality so the real vacancy rate is near 3%;  Space on the periphery of the city is vulnerable to residential conversion;  Planning permission has been given for 5,574 sq.metres (60,000 sq.ft.) of Grade A space to be built by McAleer & Rushe, who have already chalked up one newsuccesswith City Viewadjacent to the railway station. That was the first speculative scheme in 20 years. Rents for Grade A are £301.28 a sq.metre (£28 a sq.ft.);  Aberdeen Asset Management has refurbished 3,716 sq.metres (40,000 sq.ft.) at Mocatta House, Trafalgar Place.

SHW’s Emma Hards said: “The office market in Brighton is strong with a real variety of occupiers looking for new space but there is a lack of good quality offices and if more were available there are the occupiers to take it”.

What has happened is that companies like Spaces (the creative arm of IWG, formerly Regus), have opened up in the city. Spaces has opened in the refurbished Mocatta House. The company’s Richard Morris commented: “The centre has been designed to cater to the varying needs of Brighton’s professionals and provides a range of space for meetings, networking and so on”.

PUSHING GARDEN towns and villages

Kent, Surrey & Sussex News

Otterpool Park, Kent is one of the recipients of a £2.5 million government fund to underpin the building of garden towns and garden villages in the UK.

It is one of a number being built in the south east in such places as Didcot, Bicester and Basingstoke.

The aim is to provide 220,000 new residential units.

The government money is to help local authorities and communities to speed up the development process which will also bring new community, leisure and commercial schemes.

PUSHING GARDEN towns and villages Commercial Property Register November 2017 - March 2018 www.compropregister.com

Salmon Harvester LANDS TENANT

Kent, Surrey & Sussex News

In the heart of East Sussex near Uckfield, Salmon Harvester has secured a pre let for a 1,858 sq.metres (20,000 ft) industrial building.

The warehouse has been taken by Gunnebo, a safety equipment supplier, at Ashdown Business Park, Maresfield on a 15 year lease. The building will be completed in mid 2018.

Doug Stewart of Salmon Harvester said: “This is an example of our knowledge of the occupational market combined with our ability to source first class products off market”. Fraser Whyte and Hoddell Stotesbury Morgan advised Salmon.

Ashdown Business Park is at the junction of the A272 and A22 providing links to the coast and south east.

PROPERTY profile

Kent, Surrey & Sussex News

Cummings House, Wotton Road, Ashford, Kent TN23 6LN Description: Detached industrial premises with offices and yard.

Location: The property is situated only 2 miles from Ashford town centre. Ashford is one of Kent’s designated growth centres.

Access: Cummings House is only 1.5 miles from Ashford International Railway Station and the Channel Tunnel terminal is 14 miles away.

Junction 10 of the M20 is 3 miles away. The area has a fine communications network via the A20/M20 and mainline railways.

Amenities:  All mains services  T5 Energy Saving Lighting throughout  Phase 3 Power  Wet radiator gas heating system to offices  Gas warm air heating to industrial space  Minimum height to eaves: 12 ft  Side loading access to factory  New CCTV System  New Alarm System  EPC: C (56) Specification: 13,500 sq.ft. factory 1,696 sq.ft. offices Car park Terms: Leasehold - £97,500 pa Freehold: Guide Price £975,000 For further details and viewings, please contact sole agent: Richard Stafford, Stafford Perkins 01233 613900 richard@staffordperkins.co.uk

HIGHER AND HIGHER in Croydon

Kent, Surrey & Sussex News

Surely the symbolismof developing the UK’s tallest residential tower of 68 storeys linked to another of 41 graphically illustrates that Croydon has moved up a gear as an urban entity.

The scheme at One Lansdowne Road,which has planning permission, is by Guildhouse-Rosepride and apart from 794 homes it will have 34,838 sq.metres (375,000 sq.ft.) of offices.

However, this is not the only major tower scheme to come forward recently in Croydon because Tide Construction wants a build-to-rent tower close to East Croydon railway station. It will have 546 residential units in a 38 and 44 storey tower.

It will be the tallest modular tower in the world with Tide using off site manufacturing systems. On top of this MiFlats has submitted plans for a 34 storey residential tower with 296 so called ‘microflats’ aimed at young professionals. In Phase 2 of the project (the first phase saw the conversion of Canterbury House, a 12 storey office) half the units will be affordable. Oddly enough, research by online estate agent eMoov has revealed that Croydon tops the list for London as being the capital’s wealthiest borough for property. The analysis is on the basis of surface area.

Elsewhere in Croydon, Linton Group, in a joint venture with Henika Group, has bought two properties at 9-11 Wellesley Road totalling 5,574 sq.metres (60,000 sq.ft.) in the heart of the town’s regeneration area.

Gary Linton commented: “This is an opportunity to get involved in Croydon’s far reaching regeneration programme. We fully believe in the potential of the borough as one of London’s leading commercial and residential hot spots”.

Also in Surrey, Schroders Regional Office Fund has paid £11.5 million for the 3,252 sq.metres (35,000 sq.ft.) London Court

Sold OUT

Kent, Surrey & Sussex News

Proof of the buoyant industrial market along the south coast is provided by Glenmore going for further expansion at its business park in Chichester after all 37 units were let or sold.

The units at Glenmore Business Park, Portfield Works were built speculatively and have all gone in six months.

Planning permission is now in place for a second phase, adding 40 small units although there will be three detached larger units of 1,010 sq.metres (10,870 sq.ft.), 1,467 sq.metres (15,794 sq.ft.) and 2,093 sq.metres (22,534 sq.ft.).

Letting agents are LSH, JLL, Henry Adams and Michael Jones & Co.

Guy Jackson of LSH said: “The speed with which these units have been leased or sold, along with the prices they are fetching, demonstrated that the confidence is well placed”.

Also in Chichester, Flude has sold Midland House, Southgate which has offices and two retail units, for £2.2 million.

OPENED IN Guildford

Kent, Surrey & Sussex News

The fact that some of the leading property advisory businesses are expanding their network in the three counties indicates the quality of the business being transacted.

In Guildford, Hurst Warne has opened a new office because of increasing activity in the town.

Hurst Warne’s Mark Leah said: “We have concluded over 23,225 sq.metres (250,000 sq.ft.) of property transactions in Guildford in the last two years”.

“Coupled with the town’s excellent economic prospects, we felt the time was right to create a permanent base”.

Guildford has recently seen the emergence and clustering of high tech innovative industries such as gaming, satellite technology, healthcare and bioscience.

The need for regional expansion also motivated SHW to open an office in Bromley.

MAKING Discovery Park WORK

Kent, Surrey & Sussex News

From the depths of despair when Pfizer decided to cut its vast business park at Sandwich the mood has moved to total optimism as the new owners have revitalised it as Discovery Park, an appropriate name.

The investment goes on with the latest proposal for 4,645 sq.metres (50,000 sq.ft.) of laboratory space and the expansion of offices with 5,574 sq.metres (60,000 sq.ft.) of refurbished space.

Additionally, the site’s catering and conference facilities will be revamped to cope with the fact that 150 companies are located there with 3,000 employees.

Toby Hunter, Chief Executive of the park, said: “Our desire is to ensure that the worldwide reputation Sandwich has enjoyed for decades continues into the future.

We have plans to invest in our science offer and enhance facilities across the park”.

Ashford RENAISSANCE

Kent, Surrey & Sussex News

In the uncertain economic climate engendered by the Brexit vote, Ashford, one of the nearest business towns to the Continent, is thriving and has embarked on a long term ambitious expansion plan.

All the ingredients for success are in place, from the international railway station bringing high speed travel, a dynamic local government approach to development and the enthusiasm of local businesses epitomised by the role of Quinn Estates in the transformation.

This is best embodied in the first phase of 7,478 sq.metres, ACQ ONE 38, in the commercial quarter, in partnership with George Wilson Developments, which is now 75% let.

Mark Quinn commented: “Ashford is a really exciting place right now with the commercial quarter 75% let and we are in discussions with financial service groups to take the remaining space”.

“The international railway station is almost adjacent to the development, making this an ideal commuting location. Overall, the project is expected to create 600 jobs for the borough and is the result of the council and ourselves working together to make things happen”.

His optimistic view is endorsed by Cllr Gerry Clarkson, who said “I am confident this will be the catalyst for delivery of new jobs and opportunities that our international town of Ashford needs. This is a key strategic site”.

Ultimately, the commercial quarter will have 54,811 sq.metres (590,000 sq.ft.) of offices and shops.

That is just one part of the retail changes because there are also the 9,290 sq.metres (100,000 sq.ft.) extension of the Ashford Design Outlet which is due for completion in 2019 and already receives 3 million visitors a year.

The Ashford scheme is ideal for Quinn because they specialise in mixed use development and are particularly focused on getting the support of local communities and organisations. For example, in the past three years Quinn has committed to £50 million of community projects including a state-of-the-art facility for Pilgrim Hospice, an apprenticeship centre for Canterbury College and a sports hub in Herne Bay”.

Its flexible policies extend to joint partnerships with local authorities in Kent where it has 8 schemes, including the ACQ ONE 38 office scheme, the largest in the county for 10 years. Another of its developments is to transform Sittingbourne town centre.

In fact, Quinn is involved in 48 sites in the south east which include 22,500 residential plots and 371,600 sq.metres (4 million

Industrial SHORTAGE

Kent, Surrey & Sussex News

The industrial property market in the south east faces a crisis of lack of space as more properties are eaten up for residential use.

That is the stark message from Richard Seton-Clements of Glenny highlighting the fact that “centralised long established industrial areas are being zoned for residential or mixed use development”.

“While planners will argue that their policies ensure that there is no net loss of employment space and job numbers, the creation of retail/office or leisure space is not dealing with an issue that is getting more apparent”.

He added that this brought high land values tempting owners of old industrial estates to sell up, leaving tenants to try and find newaccommodation.

Glenny has witnessed a marked increase in demand for industrial premises, notably freehold, down the M2/M20 corridor.

However, Seton-Clements sees hope in a number of new developments such as Manston Business Parks and the Tavis House scheme of 18 starter units on Orbital Park, Ashford that will be offered for sale. Tavis House Business Centre will offer industrial and warehouse units from 114 sq.metres (1,228 sq.ft.) up to 247 sq.metres (2,659 sq.ft.). The scheme is due to start on site this month and be ready for occupation in spring 2018.

The thirst for industrial space is demonstrated by the success of Salmon Harvester’s Axiom trade and industrial scheme also at Orbital Park in Ashford. Two more buildings have been let, leaving only three units available. Salmon Harvester Director, Pat Mahoney, said: “We anticipate the estate letting up completely shortly, rewarding our confidence in internally funding the speculative build”.

InBrief #2

Kent, Surrey & Sussex News

Virgin Media is to build an ultrafast broadband and entertainment network in Ashford as part of an investment in 108,000 homes and businesses in Kent. Known as Project Lightning it has the potential to transform the quality of broadband in a county where it is slow.

College OPENS

Kent, Surrey & Sussex News

Being the first major town centre project to be completed, the opening of the £26 million Ashford College reveals the priority given to education in the economic picture.

It has now taken its first intake of 900 students into the 4,715 sq.metres (50,752 sq.ft.) town centre campus which has a range of facilities that will train the future workforce such as fine art studios and teaching kitchens.

Later phases of the college will bring a sustainable technologies block for engineering, plumbing and electrical facilities and motor sport workshops.

Seven key town centre projects: Apart from the new college, there are seven main developments in Ashford that are bringing substantial improvements.

These are: 1. Elwick Place with a 900 seat cinema, a 58 bed Travelodge, 7 restaurants and cafes and 200 apartments, which is opening in 2018/19; 2. Curious Brew, a brewery and eating destination on a 1.6 acre site opening next year; 3. A new Aldi store; 4. Victoria Way East with a 120 bed hotel, 275 homes and 3 retail unit as well as flexible office and retail space being developed by U&I and Carrington Group; 5. Victoria Way West with 635 apartments and 25 houses on a 3.87 hectare site being developed by Quinn Estates, GRE and Neighbour 6. The commercial quarter by Quinn Estates and George Wilson Holdings 7. Ashford Designer Outlet with a new extension to open in 2019.

Pushing ON

Kent, Surrey & Sussex News

The developers and council are not resting on their laurels, as illustrated by the presentation at St Pancras railway station of the “Ashford – Locate, Innovate, Succeed, Live” event.

This brought together many of the people and organisations involved in regenerating the town, from retail giants like Lidl to leisure companies such as Picturehouse and hotels group, Travelodge as well as, of course, the developers like Quinn Estates and the borough council.

What is impressive is the widespread support for the regeneration of Ashford.

Take Phil Hubbard of agent Sibley Pares Taylor Riley who said “We see Ashford as a significant growth town with more development underway than almost anywhere else in Kent and a very progressive and dynamic borough council and their backing and support are key to helping to push the town to reach its undoubted potential”.

Another perceptive view is from Siobhan Wood of agent Smith Woolley who said: “Ashford town centre is on the cusp of being transformed from a traditional agricultural and market town into a more dynamic, modern centre offering a wider diverse range of commercial facilities”.

Pushing ON No slowing IN GROWTH

No slowing IN GROWTH

Kent, Surrey & Sussex News

The key point about the emergence of Ashford as a growing business centre is that the pace of change has been maintained over the past five years.

In a poll conducted by Locate in Kent, two thirds of the respondents of developers, businesses, investors and property professionals viewed Ashford as a good or very good place to do business.

The key findings are:  59% view Ashford as a good or very good business location;  Excellent rail and road links and proximity to continental Europe and London, together with availability of sites, quality of life and a supportive local council are listed as positives;  62% say Ashford has improved as a business destination over the past five years.

This sort of response is unusually positive and some of the comments from businesses leaders underline this - such as “it is economically dynamic and the population has grown enormously” as well as “improved office space and more business parks”.

InBrief #3

Kent, Surrey & Sussex News

Former Taylor Riley Stafford director, Richard Stafford, is celebrating the first anniversary of his own business, Stafford Perkins. Stafford said: “The last 12 months have been incredibly hard work but hugely satisfying.

There was never a doubt that I would choose Ashford as a location. It’s a dynamic and vibrant town that is really going places”.

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