The once dynamic Thames Valley office market is on course for a slow recovery after a difficult performance in 2009 when take up was the lowest since 2001 and 52% down on 2008. But it is a mixed picture with Reading continuing to languish but Bracknell on course for a strong showing as companies seek space.

Cushman & Wakefield calculate the 2009 take up at 82,774 sq.metres (891,000 sq.ft.) but added that "the outlook for 2010 is brighter with the market expected to stabilise with the amount of office space likely to fall towards the end of the year."

The result of the tough 2009 was that average rent has dropped by 11.6% to £257 a sq.metre (£11.90 a sq.ft.), the lowest level since 2004. Given the fact that the Thames Valley office market is the second largest in the UK, this means that tenants are in prime position for deals. That may not last because new development has dried up.

It is also worth noting that according to C&W total requirements are 22,7612 sq.metres (2.45 million sq.ft.). The firm's Charles Dady said: "When we look back in a year's time, the first quarter of this new decade may well be regarded as the turning point of the cycle. The recovery will be gradual but areas where supply is most constrained the main CBDs, for example, will see a quicker turn around in fortunes as confidence returns."

To put it in context, there are three speculative developments in the area totalling 21,060 sq.metres (227,191 sq.ft.) and this should be compared with 18 buildings totalling 106,839 sq.metres (1.15 million square ft) in 2009. C& W reckon "the funding wheels will start to turn during this period and the next cycle may be closer than we think." So that is encouraging. In the past the Thames Valley has gained with the recovery of central London, which is well under way. The hope now is that it will be an increasing influence.

Construction has started on the £450 million 'Heart of Slough' regeneration programme which will replace the bus station. The development is the key to improvement in Slough and will give:

• 1,600 residential units;
• Over 33,987 sq.metres (365,840 sq.ft.) of offices;
• A new bus station;
• A hotel;
• Public library and road and public realm improvements.

Michael Garvey of Stupples said Slough had been more active this year and his firm had completed two lettings in Beechwood House to Zenos, a training company, and F&C Reit.

He said: "Slough has become more active and there are other deals in solicitors' hands."

Garvey is also Stupples' point man for High Wycombe where he said there was a shortage of good quality industrial properties which was particularly damaging to the small business sector.

The steady development of SEGRO's IQ Farnborough is continuing with the prospective sale of a 15 acre site to TAG Aviation.

As the owner of the nearby Farnborough Airport, TAG is looking to develop an office and airport facilities scheme as part of a policy of operational expansion at the airport. The SEGRO site has planning permission for a 26,570 sq.metres (286,000 sq.ft.) office complex.

In nearby Aldershot, the plan for an expansion of the town by the Homes and Communities Agency (HCA), in conjunction with Defence Estates has moved a step nearer with developers being invited to bid for the site.

The plan is for a mixed use scheme of 4,500 residential units with a whole range of other facilities, such as local centres and leisure facilities. The site has been released as part of the Strategic Defence Review.

Drivers Jonas Deloitte will be the adviser for the sale. DJD's Alex McKinlay said: "The Aldershot Urban Extension is the most significant MOD property to be sold outside London in the last decade. We expect competition to be fierce among the leading players in the development field."

Kevin Bourner of the HCA said: "We will ensure that the new development serves the people of Aldershot and invigorates the town centre. The winning bidder will have to achieve high standards of sustainability and design."

On the basis of a number of substantial requirements and an increase in enquiries, it looks as if Bracknell could be the most active town in the Thames Valley this year.

The buoyancy has certainly provided a lively start to Simon Fryer's new agency in the town, Fryer Commercial, in its first few months.

Fryer said: "There is plenty of business in Bracknell with lots of properties on offer. There are seven known and named companies seeking 11,613 sq.metres (125,000 sq.ft.) which has meant a rise in the number of viewings and proposals."

He added that there are another three companies looking at taking offices in Bracknell, including some who have not been located there before. "This is very encouraging," said Fryer, whose firm, together with NB Real Estate, is marketing the 10,223 sq.metres Lakeside office complex owned by Commercial Estate. This was previously owned by Prupim and occupied by Cable & Wireless.

Fryer said: "We are offering highly competitive deals at Lakeside which means tenants have no bills to pay before moving in, no fit out costs and a monthly rent." Commercial Estates is improving the building by adding a gym and shop.

The timing of RO Developments' new scheme for two offices totalling 10,220 sq.metres (110,000 sq.ft.) in Bracknell will, on the basis of recent activity, be spot on. It has detailed planning permission for two buildings, in association with Urban Switch, in Market Street, Bracknell town centre. The largest of these will be 6,968 sq.metres (75,000 sq.ft.) and they are designed to achieve the BREEAM rating of excellent.

ROD's Andy Busby said: "We have secured a number of other town centre sites with generous on site parking and close to main line railway stations to give occupiers and their staff a real choice as to how they travel to work." Bracknell has a well developed road network and is close to the M3 and M4 motorways. Joint letting agents are Knight Frank and Jones Lang LaSalle.

Meanwhile, Bracknell Forest Council has adopted a new Character Area Assessments document that will become one of its Supplementary Planning Documents and a basis for considering future planning applications.

Fujitsu, the Japanese electronics company, wants to move out of its 6,968 sq.metres (75,000 sq.ft.) office in Bracknell because it is reducing its UK work force by 10%. It has told the Prudential Pension Fund of its desire to leave and Lambert Smith Hampton and Strutt & Parker will now market the building.

The Crown Estate has sold half its shareholding in the Westgate Centre, Oxford to Land Securities. This follows the Estate's purchase of the centre from Capital Shopping Centres for £56 million. Land Securities is paying £28 million for the stake, a yield of 6.75%. The attraction for the developer is that a site has been cleared adjacent to the 29,728 sq.metres complex for a new shopping centre of 69,675 sq.metres to be anchored by a John Lewis department store, John Akers of Land Securities said: "In partnering the Crown Estate, we are building on the relationship established at Exeter and based on a shared approach to long term asset management."

Reading has been hit hard in the recession with office lettings down 67% last year to 12,166 sq.metres (130,955 sq.ft.).

The report from Hicks Baker notes that "many of the occupiers with lease breaks or expiries who were expected to fuel demand in 2009 chose to stay with a safety first, do nothing approach coinciding with landlords prepared to be flexible in order to retain them." Stephen Head of Hicks Baker: "There is still a lack of demand and commitment but there is still more chance of trophy deals this year than in 2009.There are some grounds for optimism because Grade A rents have remained robust despite weak demand." The slow market has not deterred either deals or new development proposals. For example, Heineken is considering a mixed use scheme on its 62 acre Berkshire brewery site, which came with its take over of Scottish & Newcastle. Salmon Harvester Opportunity Fund, the joint venture of Salmon Harvester and NF Mutual, has bought the 20,690 sq.metres (222,713 sq.ft.) Stadium Way Industrial Estate, Reading for £17.4 million, a yield of 7.25%.

RO Developments has also continued an active policy and is now marketing its 1,529 sq.metres (16,457 sq.ft.) newly refurbished One Manor Park. ROD has three other adjacent properties on Basingstoke Road, Reading.

A point raised by Cushman& Wakefield's survey is that competition among investors for prime assets has resulted in interest in secondary opportunities, such as the 7,621 sq metres St Georges House, Wimbledon, bought by Threadneedle from Aviva for £21m (Yield 7.84 %).

Activity has picked up in Basingstoke and in a more confident approach a developer is being sought for the 167,220 sq.metres (1.8 million sq.ft.) redevelopment of the Basing View Business Park.

This would be a long term project of up to 15 years and is being promoted by Basingstoke and Dean Council. It wants a mixture of offices (about half the total), a hotel and serviced apartments, residential, shops and leisure.

There is already an approved master plan by Broadway Malyan for the 65 acre site, which was built in the 1970s. The plan envisages several business districts and a pedestrian boulevard linking the park to the town centre through Grosvenor's Festival Place Shopping Centre.

At another business park in Basingstoke, MEPC's Chineham Park, there is an aggressive policy of overcoming the effects of the economic slow down. An example of this is that an enterprise hub for SMEs has been created.

MEPC's Rupert Batho said: "Last year we set ourselves a nine month target to create a small business campus in the Elmwood area of the park. With Basingstoke offering all the requisite elements of an entrepreneurial economy we know there would be a requirement for such a centre."

As part of this project, MEPC has launched 'Greenlite' which is a simple and flexible way to lease office space for companies who employ between 10-50 people."

At the Hatch Industrial Park, Surecalm Healthcare Ltd has taken Unit 6 comprising 853 sq.metres (9,185 sq.ft.). This deal completed in May 2010. Prior to this, Oventrop, a leading manufacturer of valves and controls for the building services industry, purchased the long leasehold interest of Unit 11 comprising 2,090 sq.metres (22,497 sq.ft.).

CBRE's Ruth Tytherley commented: "This sale brings the occupancy rate up to approx 55%, with firm interest being shown in two of the remaining five units."

Having outperformed its historic average in the recession, Staines is set for rental growth this year.

That is the view of Knight Frank in its assessment of the M25 market. The strong performance also applied to Chiswick and Hammersmith.

Looking ahead, Knight Frank predicts that in the next 12-18 months "demand for offices will be driven by lease flexibility and value for money." Before the end of 2012, almost 557,400 sq.metres (6 million sq.ft.) of lease break expiries are anticipated across 19 key towns in the south east. This list includes Reading, Slough and Bracknell.

The agent also anticipates that, as far as the M25 is concerned, (the main part of which covers the top towns in the Thames Valley) take up will increase by 15% this year.

Knight Frank believes that financial and business services will continue to grow rapidly and will account for nearly half the economy in the south east in 20 years' time. On rents, the current year could see further declines but stability will return in 2010.

The fact that the Chiswick Park Unit Trust has now entered a two year liquidation period means that its asset, the 167,220 sq.metres (1.8 million sq.ft.) business park, is likely to be sold. The trust is managed by Schroders, which also owns 20% of the park, with Stanhope and Aberdeen Property Investors. There is a question mark over the attitude of the investors to a sale because some have indicated in the past a desire to extend the life of the trust. It might be sold piecemeal or as a whole, in which case the price tag would be around £360 million.

Perhaps surprisingly the Thames Valley has lacked its usual dynamism in the current recovery from the recession. On the other hand the decline in the property market was less severe than in the dotcom collapse at the beginning of the century.

Some of the stars of the recent period, such as Maidenhead, have lost their sparkle and Reading has certainly been troubled and is still slow. That is temporary because it remains a favourite place for companies and will benefit from the large investment in improving the rail services.

The picture in Bracknell as painted by Simon Fryer is far more optimistic with a spate of deals in the pipeline. This town is a favourite home for some major companies, even if Fujitsu is pulling out as it cuts its UK presence.

Transport links are certainly one of the factors that pull companies into Bracknell with its closeness to two major motorways and modern network of local roads. Staines has also performed well. Some of the towns nearer London, such as Chiswick and Hammersmith, have been less affected by the recession. It is also true that the agents, such as Knight Frank and Cushman& Wakefield, predict an improvement in the Thames Valley market.