south west of england & south wales 2015

Leisure InvestmentIndustrial Retail LandOffice

Market Monitor South West of England & South Wales

2015

Contents

2 Welcome

3 Acrosstheregion

5 Bath

7 Bridgwater

9 Bristol

11 Cardiff

13 Exeter

15 Gloucester

17 Newport

19 Plymouth

21 Swansea

23 Swindon

25 Taunton

27 Truro

29 Aserviceoverview

2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.

AlderKingMarketMonitor20151

2014 Highlights£1.07 billionTotalvalueofSouthWestand

Walesinvestment.

£267.8 millionSaleof50%stakeinCabotCircus,

BristoltoAviva-theregion’slargest

investmenttransaction.

£28.50 per sq ftNewrecordBristolofficerent.

1.75 million sq ftLowestBristolindustrialsupplyfor

11years.

400,000 sq ftQ4Bristolcitycentreofficetake-up,the

highestquarterlytake-upfor20years.

22% upCardiff’sfiveyearaverageofficetake-up.

1 million sq ftBristolcitycentreofficespaceidentified

forresidentialconversionviaPDR.

Welcome

Market Monitor 2015 looks at the occupational and investment markets in the South West of England and Wales over the past 12 months, with data, trends and analysis on 12 key regional centres including, for the first time, Bridgwater, Somerset.Summary

2014 commercial property activity in the South West and Wales was the strongest since the financial crisis, with strong occupational demand driving a buoyant regional investment market and supporting the return of speculative development in a number of locations.

Last year saw a 51% increase in the level of office and industrial take-up - the highest level for seven years. There was a correspondingly sharp drop in supply and, as predicted in last year’s Market Monitor, the majority of centres recorded rental growth over the course of the year.

The region’s new speculative office and industrial developments secured high profile lettings in 2014 with some achieving record rents, confirming occupier appetite for Grade A space. There is now a pressing need to bring forward more speculative development in key locations over the next 12-18 months to replace dwindling stock and meet rising demand.

The year’s very strong performance reflects improved occupier confidence. Notwithstanding uncertainties from the forthcoming General Election and the possibility of interest rate rises, optimism remains high that activity levels can be sustained through 2015.

The South West continues to play to its strengths of financial, professional and creative services, together with engineering, technology, logistics, defence and energy. Predicting and meeting the property needs of these occupiers over the next 5-10 years is essential for the region’s continued success.

The prospect of city and regional devolution, while potentially some way off for the South West, provides a tantalising opportunity for the region to exercise greater control over its economic future, driving investment and creating new jobs.

Simon Price, Head of Agency at Alder King

2www.alderking.com

Industrial

Offices

Across the region

(sqm)sqft

occupational summary

• Take-upincreasedin2014onthepreviousyearinallbutNewportwiththelackofgoodqualitysupplyincreasinglyaconstrainttoactivity.

• Whilesupplyincreasedinsomecentres,thecorelocationshaveseenfurtherdecreasesinavailability.

• Themajorityofcentreswillnowsupportspeculativedevelopment.

• SupplyinBristolisnowatitslowestlevelfor11years.

• DemandisincreasinglyfocusedonbetterspecifiedspacewithnewbuildactivitycurrentlyunderwayinBristol,Gloucester,Wellington,BridgwaterandTruro.

• Withanimprovingnumberofmediumsizedrequirements,occupiersareincreasinglyonlyabletosatisfytheirneedsviathedesignandbuildroute.

• Keyareasofgrowthwillbefromoccupiersinthelogisticssectorandparticularlythoseinvolvedwithinternetfulfilment.

officeheadlinerent£psf

industrialheadlinerent£psf

0

10

8

6

4

2

occupational summary

• 2014sawofficetake-upacrosstheregionincreaseagainwithBristol,Cardiff,Newport,SwindonandGloucesterachievingstrongimprovementsinperformancecomparedwith2013.Inparticularitwastheincreaseintake-upofmodernGradeAspacewhichboostedthemarketinmanylocations.

• Theoverallleveloftake-upinsomelocationsisnowbeingconstrainedbythelimitedsupplyofgoodqualityaccommodationwithBath,ExeterandnorthBristolparticularlyaffected.

• SofaronlyBristolandCardiffhaveseenmajornewspeculativedevelopmentcomeforwardandinBristol,bothcitycentreschemeshavemetwithearlysuccess.

• Supplyoverallhasreducedacrosstheregionagain,duenotonlytostrongoccupiertake-up,butalsothelossoffurtherspaceforconversioninparticularforresidentialuseunderPermittedDevelopmentRights.

• RentalgrowthisnowevidentinanumberoflocationsacrosstheregionwithcentralBristolseeingnewrecordrentallevelsachievedduring2014.Furthergrowthislikelyin2015.

• Theoverallreductioninsupplyisalsoresultinginareductionintheleveloftenantincentivesbeingofferedinmostmarketsacrosstheregion.

Simon Price T 0117 317 1084 E [email protected]

Andrew Ridler T 0117 317 1071 E [email protected]

(172

)16

(18

8)

17.5

Swin

don

0

30

25

20

15

10

5

intown outoftown

Glouc

este

r

(124

)11

.5 (19

9)

18.5

Bath

(226

)21

Bristo

l

(30

7)

28.5

(231

)21

.5

Newpo

rt

(172

)16

(129

)12

Cardi

ff

(237

)22

(129

)12

Swan

sea

(15

6)

14.5

(116

)10

.75

Taun

ton

(18

3)

17(1

78)

16.5

Bridgw

ater

Trur

o

(118

)11

(9

1)8

.5

Exete

r

(16

7)

15.5

(18

8)

17.5

Plymou

th

(16

2)

15

Swin

don

(73

)6

.75

Glouc

este

r

(65

)6

Exete

r

(86

)8

Bath

(86

)8

Bristo

l

(83

)7.

75

Newpo

rt

(43

)4

Cardi

ff

(54

)5

Swan

sea

(45

)4

.2

Taun

ton

(75

)7

Bridgw

ater

(81)

7.5

Trur

o

(75

)7

Plymou

th

(64

)5

.95

Key

(172

)16

(15

9)

14.7

5(8

6)

8


Retail & Leisure Residential Development Land

zoneAheadlinerent£psf

0

100

50

300

250

200

150

outoftownrent£psf

0

20

10

50

40

30

Swin

don

(30

1)2

8

Bath

(377

)30

Bristo

l(3

77)

30Car

diff

(323

)30

Swan

sea

(377

)35

Taun

ton

(20

5)

19

Bridgw

ater

(18

3)

17

Newpo

rt

(26

9)

25

Exete

r

Glouc

este

r

(26

9)

25

Plymou

thTr

uro

(215

)20

• 2014sawanotheryearofGDPgrowthandanincreaseinbothconsumerconfidenceandspending.Whilstthelevelofsalesonthehighstreetincreased,therewasalsoacorrespondingincreaseinonlinesales.

• Improvingsalesfiguresandconsumerconfidencecontinuedthestabilisationofrentsinprimetradinglocationsacrosstheregionand,inalimitednumberofinstances,agrowthinrenthasbeenrecorded.However,therentsinsecondarylocationscontinuetobeunderpressure.

• 2014alsosawareductioninthenumberofvoidsacrossthemajorityofhighstreetsintheregion.However,therewasamarkedpolarisationtowardsprimepitchesanditremainsquestionableastowhetherornotsecondaryandtertiarylocationswillrecover.Alternativeusesmaybethebestsolutionfortheselocations.

Thegrowthinonlinesalesislikelytoexacerbatethesituationovercomingyears.

• Asiscurrentlybeingexperiencedacrossthecountry,newdevelopmentremainslimited.The296,000sqft(27,800sqm)FriarsWalkdevelopmentinNewportisoneofonlytwocentresduetoopenin2015.

• ThefoodstoresectorisdominatedbyLidlandAldi,whichbothhaveaggressiveexpansionplansacrosstheregion.Elsewhere,themajorfoodstorescontinuetodrivetheirexpansionthroughaconvenienceformat,withtheCooperativelookingtobeparticularlyactivein2015.

• StrongdemandremainsfromA3operators,bothinandoutofcentre.Thehotelandpublichousesectorsalsoremainactive.

• Theyearalsosawalimitedbutwelcomeexpansionbyseveralwell-establishedregionalmultiples.

Development land market summary

• Inthefirsthalfof2014wewitnessedincreasedmarketconfidence,arisingvolumeofhousesalesandincreasedlandbuyingactivity.Mostoftheactivitywasfocusedongreenfieldsitesindesirablelocations.

• Wheretherewerecompetitivebiddingsituationsforconsentedresidentialsitesindesirablelocations,generallyanalysisshowedrisinglandvalues.

• Duringthethirdquarterof2014,activityandsalesvolumesweakened,priceincreasesplateauedandinsomecasesslightlyreduced.Inourjudgementthelandmarketisbeingaffectedandthischangeisbeingcausedbyseveralfactorsincluding:

• Thetighteningofmortgagefinanceundernew‘affordabilitytesting’regulations.

• Asignificantincreaseintheavailabilityofresidentialdevelopmentopportunities,asvendorsreturntothemarketfollowingabuoyantQ1andQ2.

• Somedevelopers,havingboughtaggressivelyoverthelasttwelvemonths,havenowestablishedadeliverable‘pipeline’andarebecomingmuchmoreselective.

• Anumberofdevelopersarecurrentlyat‘capacity’deliveringthesitestheyhavesecuredandmaynothavethetime.

• Residualsitevaluesaredrivenmoststronglybytwofactors:changesingrossdevelopmentvalueandbuildcosts.Whilstwehaveseenrisesinsalesvalues,wehavealsoseenasignificantinflationinbuildingcosts,coupledwithdeveloperconcernthatthemajorconstructionprojectatHinkleyPointcouldresultinafurther‘pressure’onthelabourmarketacrossanumberoftrades.

• Despiterecent‘softening’oftheresidentiallandmarketinQ3andQ4,twokeyunderlyingdemandfactorsremainstrong.Firstlythelongtermunder-supplyofhousingintheSouthWestandsecondly,theBankofEngland’srecentcommitmenttokeepthebaserateatitshistoric0.5%lowfor‘sometime’willprovidestabilityandcomforttomortgagelendersandhousebuyersalike.

• Demandforlandandpropertysuitableforstudent,retirementandcarehomeusesremainsstrong.

Charles Russell-Smith T 0117 317 1043 E [email protected]

Chris HaworthT 0117 317 1042E [email protected]

Investment

investment market summary

• 2014wasapositiveandencouragingyearfortheUKcommercialpropertymarket,withIPDtotalreturnsrisingabove20%andcapitalvaluesincreasingby11.6%.

• ConfidencewasevidentacrossallsectorsandthelevelofinvestmentvolumesforJanuarytoNovemberwas£47.7bncomparedto£42.0bnforthesameperiodof2013.Investorappetitehasbeenstrongandcompetitivebiddingsituationshaveoccurredforprimeandgoodsecondaryproperties.

• Thecommercialinvestmentmarketintheregionswasstrongthroughouttheyearwithhighdemandforprimepropertiesandgoodlevelsofdemandforsecondaryproperties.InvestmentactivityoutsideLondoncontinuestogrowasstrongdemandandstiffcompetitionleadinvestorstosearchforbettervalue.

• 2014finishedstronglyandwefullyexpectthismomentumtocarryinto2015withstrongcompetitionforthelimitedattractiveopportunitiesacrossallsectors.Riskappetitehasalreadyincreasedandissettoincreasefurtherasconcerngrowsovermissingthenextmarketcycle.

• TheSouthWestandSouthWalesregionanditsprincipalcentresareperformingwellinaUKcontext,fuellinginvestmentinterestandprovidingattractivecomparativeinvestmentreturns.Thisisfurthersupportedbyclearevidenceofastrongreturnofoccupierdemand,realrentalgrowthandlimitednewsupply.StructuralchangeinsomesectorsneedstobenavigatedwithcareandwhilsttheUKGeneralElectioninMaywillgeneratemuchdebate,itshouldnotderailthenewlevelsofconfidence.

valueofinvestmenttransactions£ms

John Benson T 0117 317 1100 E [email protected]

Bath

Bristo

l

Cardi

ff

Exete

r

Glouc

este

r

Newpo

rt

Plymou

th

Swan

sea

Swin

don

Taun

ton

Trur

o

0

600

400

500

300

200

100

97.

9

Bridgw

ater

31.3

5

26.3

7

17.0

2

13.2

5

209

190

76.5

55

7.4

71.5

52

.3

14.0

5

(1,6

15)

150

Swin

don

(1,0

76)

100

Glouc

este

r

(2,15

3)

200

Bath

(2,15

3)

200

Bristo

l

(Cab

ot C

ircus

)

(59

2)

55

Newpo

rt

(2,4

22)

225

Cardi

ff

(1,0

76)

100

Swan

sea

(430

)4

0

Bridgw

ater

(2,15

3)

200

Exete

r

(1,6

15)

150

Plymou

th

(1,18

4)

110

Trur

o

Taun

ton

(96

8)

90 (3

23)

30

(26

9)

25

4www.alderking.com

Bath

Industrial

Offices Simon Price T 0117 317 1084 E [email protected]


1

demand

• Occupierdemandcontinueditsstrongperformanceofrecentyears.Furthertake-upisnowbeingrestrictedbythelackofavailableaccommodationinthemarket.

• Majordealsin2014includedtheacquisitionof10,000sqft(929sqm)atCambridgeHousebyMaplecroft,8,523sqft(792sqm)at29/30MonmouthStreetbyShiftActiveMediaandfurtherexpansionbyBritishMaritimeTechnologyatTheSquareonLowerBristolRoad.

• MostactivitycontinuestocomefromtheTMT,serviceandprofessionalservicessectors,withanumberofservicedofficeoperatorsalsoactivelyseekingspaceinthecity.

supply

• Totalavailabilitywithinthecitycentrereducedfurtherin2014.ThelasttworemainingGradeAsuitesattheSouthGatedevelopmentletduringthesecondhalfoftheyear,leavingnoavailablebrandnewGradeAsupply.

• Supplyhasalsobeenimpactedbythelossofanumberofexistingbuildingstoalternativeuses,mostcommonlyhotels,studentandprivateresidential.

• Asmallnumberofnewdevelopmentsarenowbeingconsidered.EdistonRealEstateandEuropaCapitalhavesubmittedaplanningapplicationfora113,000sqft(10,498sqm)speculativedevelopmentat1Pinesgate.

headline rent

• ThelackofavailablenewGradeAspecificationaccommodationhashadtheeffectofholdingbackrentalgrowthatthetopendofthemarketoverrecentyears.

• Intheshorttermthiswillcontinuetobethecaseduetothelackofsupply,butat20ManversStreet,acomprehensiverefurbishmentoftheentirepropertycomprising45,660sqft(4,242sqm)isbeingofferedatquotingrentsupto£24psf.

• Thecontinuingreductioninavailabilityhasresultedinreducedincentivelevelsbeingofferedtosecureoccupiersacrossallqualityranges.

demand

• Goodfreeholdowneroccupierdemandremains,albeitwithlimitedopportunities.

• Thelackofgoodqualitymodernspaceisholdingbacktake-up.

• Thereisincreasedinterestinthecityfromtradeandroadsideuses,asevidencedbyScrewfix’sacquisitionof6,000sqft(557sqm)atPinesWay.

supply

• Supplyisstilllimitedtosecond-handstockbutincreaseddramaticallywiththeavailabilityoftheHermanMillerbuildingwhichcomprisescirca65,000sqft(6,038sqm)andwillappealtoanumberofexistingBath-basedoccupiers.

• Nospeculativeindustrial/distributiondevelopmenthastakenplaceinBath.

• Notwithstandingtheincreaseinsupply,thereisstillanegligibleamountofgoodqualitystockandtheshortageofmodernspaceissettocontinue.

headline rent

• Headlinerentallevelshaveincreasedto£8psf(£86.09psm).

(sqm)sqftKey

Alder King Market Monitor 20155

demand000ssqft

50

0

100

125

150

2010 2011 2012 2013 2014

75

25

65(6)

92(8.5)

82(8)

90(8)

68(6)

supply000ssqft

200

0

400

500

600

2010

2011 2012 2013 2014

2011 2012 2013 2014

300

100

350(33)

360(33) 305

(28)240(22)

145(13)

headlinerent£psf

30

0

40

2010 2011 2012 2013 2014

2011 2012 2013 2014

20

10

(215

.27

)20

(19

9.13

)18

.5

(226

)21

(226

)21

(226

)21

demand000ssqft

10

0

20

25

30

15

5

headlinerent£psf

4

0

8

10

6

2

2010

(64

.58

)6

(67.

28)

6.2

5

(75

.34

)7

(81)

7.5

(86

)8

supply000ssqft

20

0

60

80

100

40

2010

50(5)

30(3)

30(3) 20

(2)

85(8)

citycentre

20(2)

20(2)

25(2.3)

7.5(0.7)

15(1.4)

2010 2011 2012 2013 2014

1. SouthGate Centre. Courtesy of SouthGate Limited Partnership.

2. ScrewFix, Pines Way Industrial Estate, Bath. Courtesy of ScrewFix.

3. The Vaults, Bath. Courtesy of Queensberry Real Estate.

Investment

Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]

John Benson T 0117 317 1100 E [email protected] Stretton T 0117 317 1121 E [email protected]

2 2

zone A headline rent

• Bathcontinuestoattractmajornewretailerstoitscentralcore.In2014AnthropologieopenedinNewBondStreetandPrimarkinStallStreet.

• Conveniencestorescontinuetothrive.MorrisonshasopeneditsthirdstoreinWidcombeHillandTesco,itseighthstoreinSouthgateStreet.

out of town rent

• ThefutureoftheformerBathPresssiteremainsuncertain.Tescoiscurrentlyreassessingitsoptionsforredevelopmentofthesite.

• ThelongawaitedLidlstoreonLowerBristolRoadiscurrentlyunderconstructionandduetoopenearlyin2015.

leisure headline rent

• 2014sawtheopeningofmanynewbrandsincludingCowshedintheParagon,TurtleBayinNewBridgeStreet,GrillstockattheVaultsandCauinMilsomPlace.

• TwonewrestaurantopportunitiesarebeingmarketedonGrandParadebyBathCityCouncil.

• DeeleyFreed’splansatSawCloseareprogressing.OccupiersincludeacasinooperatedbyGroupPartoucheandZHotels.

value of investment transactions

• ThetotalvalueofinvestmenttransactionsinBathfor2014is£13.25m.Thisissignificantlylowerthanthe2013figureat£123.98m.However,the2013levelwasthehighestlevelinthelastsixyearsandaconsiderableproportionofthis(£101m)wasfromonetransaction,a50%shareintheSouthGateretailcentre.Theaveragetotaltransactionvaluefrom2010to2014is£44.5m.

prime yields

• Ourcurrentviewofprimeyieldsisasfollows:

- Industrial 6%

- Office 6%

- Retailhighstreet 4.5%

- Retailoutoftown 5.25%

investment by sector

• Lookingatthehighstreetretailsectorwhichdominatedthe2014investmentvaluetotal,23-26UnionStreetsoldtoCBREGlobalInvestorsfromSalixTrustfor£8.9m,5.20%NIY.Theunit,locatedinaprimeretaillocationonUnionStreet,islettoBananaRepublicona10yearleasefrom2010witha5yearbreakoption.11ArgyleStreet,lettoPhaseEightuntil2023,soldtoapropertycompanyfor£650,000,6.10%NIY.

• Intheindustrialsector,EuropaCapitalPartnersandStCongarLandpurchasedtheBittonPaperMillsiteinaJVfor£3.7m.Thesitetotals17acresandisnotoccupied.

3

6www.alderking.com

28%

50

100

125

150

175

75

25


150

0

250

300

2011 2012 2013 20142010

200

100

50

(2,6

90

.88

)25

0

(2,4

21.9

0)

225

(2,4

21.9

0)

225

(2,15

3)

200

(2,15

3)

200

outoftownrent£psf

20

0

40

60

2010 2011 2012 2013 2014

30

10

50

(430

.54

)4

0

(430

.54

)4

0

(376

.72

)35

(323

)30

(323

)30

leisureheadlinerent£psf

0

10

20

30

60

2010 2011 2012 2013 2014

cinema health&fitness A3/A4

50

40

(139

.93

)13

(139

.93

)13

(96

.87

)9

(96

.87

)9

(96

.87

)9

(322

.91)

30

(15

0.6

9)

14

(15

1)14

(15

1)14

(118

)11

(118

)11(3

34

.45

)32

(376

.72

)35

(376

.72

)35

(376

.72

)35


0

2010 2011 2012 2013 2014

25 22.5

37.57

123.98

13.25

5

3

7

8

6

4

investmentbysector

2010 2011 2012 2012 2014

primeyields%

industrial

office

retailhighstreet

retailoutoftown

industrial

retailhighstreet72%

Bridgwater 1

Industrial

Offices

(sqm)sqft

Andrew Maynard T 01823 444879 E [email protected]


demand

• Whileimproveddemandandtransactionlevelsattheendof2013rolledoverintoQ1of2014,enquiriesfortheremainderoftheyearweretypicallyforsmallerspacesaveafewlargerandyettobesatisfiedrequirements.

• RequirementstendtofocusonproximitytotheM5atjunctions23or24andgoodqualityaccommodationwithamixtureofopenplanandcompartmentalaccommodation.

• 2014sawtheopeningofAvon&SomersetPolice’snewoperationalcentreandpolicestationonExpressPark.

supply

• TheconstructionofanewInnovationCentreatWoodlandsBusinessParkwillincreasesupplysignificantlyinMay/June2015andislikelytocapturedemandfromHinkleyPointCsupplychaincompanies,shouldthemainconstructionprojectcommenceintheyear.

• Thereislittleavailabilityofaccommodationabove5,000sqft(464.5sqm)withinthetown,duetothenatureofthemarkethistorically.

headline rent

• Rentsremainedatsimilarlevelsthroughout2014,althoughsmallersuitesattractedapremium.

• Itislikelythatrentswillimprovein2015,especiallyforgoodqualityaccommodationlocatedclosetotheM5.

demand

• Therehasbeensustainedgrowthinlevelsofdemandthroughouttheyear.

• HinkleyPointCisyettohaveadramaticeffectonlevelsoftake-up,althoughenquirylevelsstartedtoriseinthefinalquarterof2014.

• Demandispolarisedwithgooddemandforsub5,000sqft(464.5sqm)andalsoforover20,000sqft(1,858sqm).

• SignificantlettingsincludeGeoPost’sacquisitionof36,500sqft(3,391sqm)atWoodlandsBusinessPark.

supply

• Newbuildhasincreasinglybeenasolutiontotheunder-supplyofexistingpremiseswithinthetown.

• Thepaucityinsupplyisparticularlyevidentforpremisesof20,000to50,000sqft(1,858to4,645sqm),althougharguablyunder-supplyisevidentacrossallsizes,especiallyforgoodqualityspace.ThispositionwillremainandundoubtedlyworsenifandwhenlevelsofdemandfromHinkleyPointCmaterialisein2015.

headline rent

• Rentswererelativelystablethroughout2014andindeedtherewereearlysignsofrentalgrowthinQ42014.

• Withfurthernewbuildlikelyin2015,thereisthestrongprospectofheadlinelevelsincreasing.

• Rentsforsecondaryaccommodationwillalsoimprovein2015iftheimbalancebetweendemandandsupplyisexacerbatedbydemandfromHinkleyPointCsupplychaincompanies.

Key


2011 2012 2013 2014 2011 2012 2013 2014

outoftown

headlinerent£psf

0

10

15

20

5

2010

demand000ssqft

20

0

60

80

40

2010

supply000ssqft

20

0

40

50

60

30

10

55(5)

2010

demand000ssqft

100

0

200

250

300

150

50

239(22)

225(21)

2010

supply000ssqft

100

0

300

400

500

200

365(34)

2010

headlinerent£psf

0

8

10

12

2

4

6

2010

2011 2012 2013 2014

2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013

(81)

7.5

2014

65(6)

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towncentre outoftown

(86

)8

(15

9)

14.7

5

1. GeoPost, Woodlands Business Park, Bridgwater.

2. Bridgwater Hospital, Bridgwater.

3. CGI of the Low Carbon Energy Innovation & Collaboration Centre, Woodlands Business Park.2 3

Investment

Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]

John Benson T 0117 317 1100 E [email protected] Maynard T 01823 444879 E [email protected]


• Afterasuccessfulfirsthalfoftheyear,demanddippedinthe3rdand4thquartersandthevacancyraterosetoalmost15%bytheendof2014.

• TheLocalAuthorityhascommencedworktoimprovetheEastoverareaaspartofitslongtermvisionforthetowncentre.

• LargerformatunitshavebeenmorepopularandtheformerArgosstoreinBinfordPlacehasfinallybeenletfollowingclosurebackin2009.

• ZoneArentshavechangedlittleintheprimeandsecondaryareas.

out of town rent

• Thereisactivedemandfromanumberofdiscountchainstogetherwithsomeconvenienceformatsupermarkets.

• Therewaslittleactivityduring2014afterseveralnewstoreopeningsin2013.


• DueprimarilytotheprospectofHinkleyPointC,thereisincreasinginterestinthetownfromhoteloperators.Constructionofan80bedroom4starhotelonEastover,whichreceiveda£4.5mcashboostfromtheGrowingPlacesFund,isduetocommenceimminently.

• A3/A4demandwillincreaseinthetownduring2015/16asmorelandisbroughtonlineandthetown’spopulationgrows.


• Thevalueofinvestmenttransactionsin2014was£31.35m,withthemajoritybeingintheretailwarehousesector.

prime yields


- Industrial 6.75%

- Office 7%


- Retailoutoftown 6%


• ThelargestdealintheoutoftownretailsectorwasLIM’spurchaseofBridgwaterRetailParkinMay2014fromCornerstoneRealEstate.The112,600sqft(10,461sqm)parkismulti-lettoNext,Wickes,Argos,PetsatHomeandLidl.Itsoldfor£26.13m,5.90%NIY.

• MetricIncomePluspurchasedTheRange,BristolRoadfor£3.67m,6.8%NIY.The33,715sqft(3,132sqm)newunitislettoTheRangefor20yearsfromFebruary2013.

• Intheofficesector,KingcastleLimitedpurchasedRoyalClarenceHouse,HighStreet,amulti-letofficetotalling14,350sqft(1,333sqm)for£1.55m,£108capitalvaluepsf.

8www.alderking.com


30

0

50

60

2010 2011 2012 2013 2014

40

20

10

(430

)4

0

outoftownrent£psf

10

0

20

30

2010 2011 2012 2013 2014

15

5

25

(18

3)

17


0

5

10

15

20

2010 2011 2012 2013 2014


(129

)12

(86

)8

(16

1)15


20

0

40

50

2010 2011 2012 2013 2014

30

10

31.35

investmentbysectorprimeyields%

6

4

8

9

7

5

2010 2011 2012 2013 2014

industrial

office

retailhighstreet

retailoutoftown

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

Not

pre

viou

sly

repo

rted

office

retailoutoftown

5%

95%

Bristol 1

Industrial

Offices

(sqm)sqft

Simon Price T 0117 317 1084 E [email protected]


demand

• Occupierdemandgatheredmomentumduringtheyearwiththeendofyeartotalthehighestlevelsince2007.Bothcitycentreandoutoftownmarketsperformedsignificantlyaheadofthefiveyearaverage.

• Notabledealsin2014includedtheacquisitionof28,276sqft(2,627sqm)byPwCat2GlassWharf,KPMG’sacquisitionof52,000sqft(4,831sqm)at66QueenSquareandinNorthBristol,TSB’sacquisitionof63,858sqft(5,933sqm)atKeyPoint,Almondsbury.

• ThemostactivesectorscontinuetobefinancialandprofessionalservicesandtheenergyandTMTsectors.

supply

• Inthecitycentre,lessthan200,000sqft(18,580sqm)ofnewGradeAspaceisimmediatelyavailable,withlessthan10,000sqft(929sqm)availableinNorthBristol.

• TwonewspeculativeGradeAdevelopments-SalmonHarvester/NFUM’s2GlassWharfandSkanska’s66QueenSquare-willcompleteinJanuaryandJune2015andhavealreadysecuredlettings.

• TherehasbeenasharpreductionintheavailabilityofGradeBspace.Approximately1msqft(92,902sqm)ofcitycentrespacehasbeenidentifiedforconversiontoresidentialviaPermittedDevelopmentRights.

headline rent

• ThelettinginOctober2014duringconstructionat2GlassWharftoPwCsetanewrecordrentinBristolforGradeAaccommodation.Thiswasfollowedbythepre-letinDecember2014toKPMG.

• Theincreasedleveloftake-upofGradeBspacehasresultedinrentalgrowthinanumberofsizerangesduringtheyear,asaresultofreducingsupply.

• Thelevelofproposedconversion,asaresultofPermittedDevelopmentRights,hassignificantlyreducedsupplyatthebudgetendofthemarket,whererentalgrowthisalsonowevident.

demand

• Therehasbeenareturnofmid-rangerequirementsinthe15,000–75,000sqft(1,394–6,968sqm)sizerangewithlimitedavailabilitytriggeringdesignbuildactivity.

• SignificantdealsincludeTheRange’sleaseholdacquisitionofthe385,000sqft(35,768sqm)formerMorrisonsRDCatCribbsCausewayandFarmFoods’newbuildacquisitionof175,000sqft(16,258sqm)atCentralPark,Avonmouth.

• Thereisincreaseddemandfromowneroccupiersforfreeholdspacewithlimitedopportunities.

supply

• Thereisanegligibleamountofgoodqualitystockandshortagesofmodernspaceareimpactingontake-up.

• Thecity’sfirstspeculativeindustrial/distributiondevelopmentcomprisingfiveunitstotalling15,000sqft(1,394sqm)isclosetocompletionatCaxtonBusinessParkwithfourbuildingspre-sold.

• Thecitycouldsupportfurtherspeculativedevelopment,particularlyprovidingbuildingsinthe1,000-3,000sqft(93-279sqm)and25-100,000sqft(2,322–9,290sqm)sizeranges.

headline rent

• Thereisnonewspaceimmediatelyavailableandweanticipatethatrentalsofcirca£7.75-£8psf(£83.40-£86psm)couldbeachievedforaccommodationbelow10,000sqft(929sqm).

• Rentsformodernandmid-rangebuildingsremainat£6.50psf(£70psm).Goodqualitysecond-handbuildingsarecommandingrentsofaround£4.75-£5.75psf(£51.11-£61.88psm).

• Withthereducedlevelsofgoodqualityavailablestock,rentalincentivesforprimespacehavereducedwithleasedurationsextending.

Key


2010 2011 2012 2013 2014

demand000ssqft

400

0

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 2014

600

200

860(80) 700

(65)658(61)

735(68)

1,250(116)

supply000ssqft

1,000

0

2,000

2,500

3,000

3,500

4,000

1,500

500

2,650(246)

2,550(237) 2,380

(221)2,350(218)

1,650(153)

headlinerent£psf

15

0

25

30

2010 2011 2012 2013 2014

20

5

10

(29

6)

27.5

(29

6)

27.5

(29

6)

27.5

(29

6)

27.5

(30

7)

28.5

(226

.03

)21

(226

.03

)21

(231

)21

.5

(231

)21

.5

(231

)21

.5

citycentre outoftown

demand000ssqft

1,000

0

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

1,500

500

2,400(223)

2,400(223)

2,600(242)2,325

(216)2,200(204)

supply000ssqft

2,000

0

3,000

4,000

5,000

7,000

2010 2011 2012 2013 2014

1,000

6,000

headlinerent£psf

3

0

5

8

2010 2011 2012 2013 2014

4

2

1

6

7

(80

.73

)7.

5

(80

.73

)7.

5

(80

.73

)7.

5

(81)

7.5

(83

)7.

75

4,500(418)

4,500(418)

3,750(348)

2,750(255)

1,750(163)

1. 66 Queen Square, Bristol. Courtesy of Skanska UK.

2. 2 Glass Wharf, Bristol. Courtesy of Salmon Harvester/NFUM.

3. Caxton Business Park, Warmley. Courtesy of Axten and Blue Marble Properties.3

Investment

Retail & Leisure Charles Russell-Smith T 0117 317 1043 E [email protected]

John Benson T 0117 317 1100 E [email protected] Stretton T 0117 317 1121 E [email protected]


• Throughouttheyear,voidshavecontinuedtoreduceinboththecitycentreandTheMallatCribbsCauseway.

• NewopeningsincludePullandBearandLloydsBankatCabotCircus,Sainsbury’sLocal,BakersDolphin,EccoandPoundlandinBroadmeadandJoules,Superdry,JackWills,LakelandandBoseatTheMall.

• THATGroupandAcornareprogressingplansforanewmixedusedevelopmentinCliftonVillagetoincludeshops,restaurantsandapartments.

out of town rent

• Sainsbury’shasopenedanewfoodstoreinPortishead.

• WaitrosenowtradetheformerCo-opsiteinBroadmeadLane,Keynsham.

• Discounteractivityremainsstrong.AldihasopenedinLongwellGreenandLidlhasannouncedproposalsforanewstoreinHorfield.


• NewrestaurantopeningsincludeWagamamasandFiveGuysinCabotCircus,CauandByrononQueensRoadandRosemarinosinthecitycentre.

• TheredevelopmentofAshtonGatehasstartedwiththedemolitionoftheWedlockStand.Dueforcompletionin2017,thestadiumwillprovide27,000seats,conferencefacilitiesandanhotel.

• BristolCityCouncilisprogressingplansforanew12,000seatArenaclosetoTempleMeadsstation.SMGandLiveNationhavebeennamedaspreferredoperators.TheArenaisduetoopenin2017.


• ThetotalvalueofinvestmenttransactionsinBristolin2014was£557.4m.Thisisanincreaseofcirca75%onthe2013totalof£319m.TheBristolfiveyearinvestmentvalueaverageis£374m.

prime yields


- Industrial 5.75%

- Office 5.75%




• 54%ofthetotalvalueofinvestmenttransactionsinBristolismadeupbythesaleofa50%stakeinCabotCircus.Thisstakeinthe1.3msqft(120,774sqm)centralBristolshoppingcentresoldfor£267.8m,6.30%NIYtoAviva.

• ThelargestofficedealwasTheParagon,VictoriaStreetpurchasedbyLothburyfor£29.5m,5.93%NIY.This75,000sqft(6,968sqm)officeismulti-lettotenantsincludingEYandMercer.

• ThemostsignificantdealintheretailwarehousesectorwasthepurchaseofCentaurusRetailParkbyNFUMutual.This81,000sqft(7,525sqm)multi-letretailwarehouseparksoldfor£47.1m,5.53%NIY.

2

10www.alderking.com

200

400

500

600

700

300

100

8%

24%

54%

14%


0

50

150

250

350

2010 2011 2012 2013 2014

Broadmead TheMall CabotCircus

100

200

300

(1,9

91.2

5)

185

(1,8

83.

70)

180

(1,8

83.

70)

175

(1,8

84

)17

4

(1,8

30)

170

(3,3

36.6

9)

310

(2,15

2.7

0)

200

(3,2

29.2

0)

300

(3,2

29.2

0)

300

(3,2

29)

300

(3,2

29)

300

outoftownrent£psf

20

0

40

50

2010 2011 2012 2013 2014

30

10

(430

.54

)4

0

(376

.72

)35

(323

)30

(323

)30

(48

4.3

6)

45


0

10

20

30

50

2010 2011 2012 2013 2014


40

(16

1.45

)15

(139

.93

)13

(322

.91)

30

(16

1.45

)15

(139

.93

)13

(322

.91)

30

(16

1.45

)15

(16

1)15

(16

1)15

(129

.16)

12

(129

)12

(129

)12

(322

.91)

30

(323

)30

(323

)30


0

2010 2011 2012 2013 2014

349

49

2

155

.19

319

55

7.4

primeyields%

5

3

7

8

2012 2013 20142011

6

4

2010

investmentbysector

industrial

office

retailoutoftown

other industrial

office

retailhighstreet

retailoutoftown

(2,15

2.7

0)

200

(2,15

3)

200

(2,15

2.7

0)

200

(2,15

2.7

0)

200

Cardiff 1

Industrial

Offices Owen Young T 029 2038 1996 E [email protected]

Owen Young T 029 2038 1996 E [email protected]

demand

• Take-uphasremainedhealthyandconstantthroughouteachquarterandhasresultedina24%increaseonthefiveyearaverageof427,000sqft(39,669sqm).

• Outoftownandbusinessparkdemandimprovedin2014.

• Dealsbelow5,000sqft(465sqm)accountedfor30%oftake-up,amarkedcomparisonto80%in2013.

• NotabledealsincludedInternationalBaccalaureateOrganisationtaking48,500sqft(4,506sqm)andSSEtaking46,851(4,353sqm)atCardiffGateBusinessPark.

supply

• Supplyhasremainedconstant,againcomprisingmainlysecondarystock.GradeAstockisextremelylow,withlessthan30,000sqft(2,788sqm)availableinthecitycentre.

• Thetake-upofspacebystudentofficeconversionsislikelytocounteracttheAdmiralInsurancerelocation,fromvariouscitycentrelocations,intoitsnew220,000sqft(20,439sqm)building.

• Over300,000sqft(27,871sqm)isforecastforconstructionoverthenext15monthswithinCardiff’s‘FinancialServices’CityEnterpriseZonewhereJRSmart’s80,000sqft(7,432sqm)CapitalQuarter2iscurrentlyunderconstruction.

headline rent

• HeadlinerentismaintainedinthecitycentrebutisexpectedtogrowtofacilitatenewGradeAofficedevelopment,particularlyatRightacresCentralSquarewhereBlakeMorganhaspre-let28,077sqft(2,608sqm).

• Over200,000sqft(18,581sqm)oflettingsinoutoftownlocations(excludingCardiffBay)haveresultedinoutoftownheadlinerentsremainingconstant.

• IncentivescontinuetotightenbutweexpectsubstantialrentfreeperiodswillbeofferedonnewGradeAdevelopmentstoencouragerentalgrowth.

demand

• DemandincreasedslightlyfromlastyearandincludesPinewoodStudio’smovetothe177,000sqft(16,444sqm)buildingformerlyoccupiedbyG24i.

• Theyearshowednoslowdowninthemarketfordealsbelow10,000sqft(929sqm)withtransactionsofthissizeaccountingfor80%ofalldemand.

• CapitalBusinessParkaswellasthesouthernpartofCardiff,willbeenhancedwiththeconstructionoftheEasternBayLinkRoadcommencingin2015.

supply

• Supplyhasreacheditslowestlevelinsixyearsinlinewithincreaseddemand.

• Manytransactionshavebeenfreeholdcontributingtolevelsofsupplyinthissectordecreasingforthesixthsuccessiveyear.

• Supplylevelsareexpectedtodeclinefurtherasaresultofcontinuedlimitedspeculativedevelopmentandthereducinglevelsofqualitystockcomingtothemarket.

headline rent

• Headlinerentshaveremainedunchangedat£5psf(£53.82psm).

• Incentivesarestillverymuchinplaceforsecondarystockwhileprimespaceincentivesarehardeningandleasedurationslengthening.

(sqm)sqftKey


demand000ssqft

0

200

300

400

500

600

700

2010 2011 2012 2013 2014

100

437(41)

639(59)

380(35)

300(28)

531(49)

supply000ssqft

400

0

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 2014

600

200

1,200(111)

1,200(111) 1,100

(102) 1,000(93)

1,000(93)

headlinerent£psf

0

5

10

15

20

25

2010 2011 2012 2013 2014


(226

.03

)21

(215

.27

)20

(236

.81)

22

(237

)22

(237

)22

(15

0.6

9)

14

(139

.93

)13

(139

.93

)13

(129

)12

(129

)12

demand000ssqft

0

400

600

800

1,000

2010 2011 2012 2013 2014

200

516(48)

518(48)

572(53)

763(71)631

(59)

supply000ssqft

0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014

1,894(176)

1,467(136) 1,368

(127)1,094(102)

1,986(184)

headlinerent£psf

0

2

3

4

5

6

7

2010 2011 2012 2013 2014

1

5.5(59.20) 5

(53.82)5

(53.82)5

(54)5

(54)

1. Central Square, Cardiff Masterplan. Courtesy of Rightacres Property Co Ltd.

2. Caradog House, Cardiff.

3. Castle Arcade, Cardiff.2 3

Investment

Retail & Leisure Owen Young T 029 2038 1996 E [email protected]

John Benson T 0117 317 1100 E [email protected] James Nicholas T 029 2038 1994 E [email protected]


• HeadlinerentshavereducedslightlybutshouldremainstablewithcontinuedlettingsinStDavid’sIItoBlott,TigerStores,Mac,OtherUKandCastleFineArt.

• QueenStreetremainspopularwithanewPrimarkstoreattheformerBHSandanewMatalanintheformerPrimark.

out of town rent

• Activityremainsquietandisstilldominatedbydemandforconveniencestores.

• ThereareplansfortheformerCometonNewportRoadtobecomeadiscountfoodstore.


• TherehasbeenahighlevelofactivityintherestaurantandA3sectorwithmultiplelettingstogoodcovenantsacrossthecity,mostnotablyinTheHayesarea.NewoccupiersincludeWahaca,Burger&LobsterwhicharebothadjacenttothenewMiller&Carterrestaurant.RickSteinalsohasarequirementinCardiff.

• MoorfieldGroup(Moorfield)andPlusShopsRetailhaveagreedtotakea25yearleasefromPremiereCinemastore-openthefive-screencinemaatCardiff’sCapitolShoppingCentre.The£1mrefurbishmentiswellunderway.


• ThetotalvolumeofinvestmenttransactionsinCardiffincreasedby59%onthe2013figures,risingfrom£131.33mto£209m.

prime yields


- Industrial 6.5%

- Office 6.25%




• Themulti-letCapitalShoppingParkwaspurchasedbyReAssureLtdfor£59.6m,5.20%NIY.

• Inthehighstreetretailsector,10TheHayeswaspurchasedbyHendersonUKPUTfor£14.8m,5.75%.TheunitislettoTXMaxxforafurther7years.

• ThelargesttransactionintheofficesectorwasthesaleofCricklewoodHousefor£40.5m,5.36%NIY.Thiscirca100,000sqft(929sqm)officebuildingislettotheNationalAssemblyofWales.

• TheCastleQuarterPortfolio,acollectionoflistedVictorianretailarcadeswithassociatedoffice,residentialandleisureusestotalling125,000sqft,waspurchasedbyMansfordRealEstatefor£21.375m,7.65%NIY.

12www.alderking.com

2%

34%

60

120

150

180

210

90

30


0

100

150

200

250

300

2010 2011 2012 2013 2014

50

outoftownrent£psf

25

0

35

40

2010 2011 2012 2013 2014

30

20

15

10

5

(322

.91)

30

(322

.91)

30

(322

.91)

30

(323

)30

(323

)30


0

10

20

50

2010 2011 2012 2013 2014


30

40

(139

.93

)13

(139

.93

)13

(139

.93

)13

(14

0)

13

(14

0)

13

(10

7.6

4)

12

(10

7.6

4)

12

(322

.91)

30

(322

.91)

30

(322

.91)

30

(118

)11

(118

)11

(431

)4

0

(431

)4

0


0

2010 2011 2012 2013 2014

129.6

204.36

78.43

131.33

209

primeyields%

5

3

7

8

2012 2013 2014

6

4

20112010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

18%

9%

37%

(2,

475

)23

0

(2,

422

)22

5

(2,

422

)22

5

(2,

422

)22

5

(2,

69

0.8

8)

250

industrial

office

retailhighstreet

retailoutoftown

other

(118

.40

)11

Exeter

Industrial

Offices

(sqm)sqft

Noel Stevens T 01392 353093 E [email protected] Collison T 01392 353091 E [email protected]

Noel Stevens T 01392 353093 E [email protected] Collison T 01392 353091 E [email protected]

1

demand

• Thereisstrongdemandforsmallersuitesinthecitycentrewithclientsbreakingupfloorplatestosatisfydemand,AtriumandTheSenatebeingprimeexamples.

• Thereisatrendtowardsowneroccupiersseeking5,000sqft(465sqm)stand-alonefreeholds.

• Demandisnotbeingmetbystandingstockandhighprofileoccupiersarestrugglingtofindsuitablespace.

supply

• Thereiscontinuedpressureonsecondarystockforredevelopmentforalternativeusessuchasstudenthousingorresidential.

• Therehasbeennonewbuildduringthedownturn,severelylimitingGradeAavailability.

• Wepredictacontinuedlackofsupplyofmodernpremisesforthenextthreeyearswhilstthedevelopmentpipelinecatchesup.

headline rent

• ThelettingtoBlurGroupat£17.50psf(£188psm)in2013hasyettobebeaten.

• Newbuildofficesarenowbeingpricedat£18psf(£194psm)leaseholdand£235psf(£2,530psm)freehold.Weexpectthesepricestorisetokeeppacewithconstructioncostinflation.

• Valuesforsecondarystockarealsorisingduetothelackofsupplyandcomparativecostofnewbuild.

demand

• TheindustrialsectoristhestrongestinExeterwithgooddemandparticularlyfrominternetfulfilmentcompanies.

• Occupiersarefocussingontransportlinksandbroadbandcapacitywhenselectingpremises.

• WecontinuetoseestrongdemandforcarshowroomsatMatfordGreenBusinessParkwithToyota/Lexusbuyingtwoacrestorelocatefromtheirexistingpremises.

supply

• Supplyhasseenaconsiderabledecreasetoits2009level.Limiteddevelopmentsince2007meansoccupiersareforcedtotakeolderbuildings.

• Constructionof40,000sqft(3,716sqm)ofnewspacewillbeginatHillBartonin2015wherepre–letsareagreed.

• Theavailabilityofexistingbuildingsabove10,000sqft(929sqm)isextremelylimitedwithdemandunsatisfied.

headline rent

• £8psf(£86psm)hasbeenachievedfornewbuildpremisesinExeterbut£7.50psfislikelytoremainastheheadlinerentforinstitutionalspecificationpremises.

• Landvaluescontinuetorisewith£460,000peracrebeingpaidinSowtonandlandatMatfordGreenbeingofferedat£600,000plusperacre.

Key


demand000ssqft

50

0

100

125

150

175

200

2010 2011 2012 2013 2014

75

25

150(14)

150(14)

140(13)

100(9)

135(12)

supply000ssqft

100

0

200

250

300

400

450

2010 2011 2012 2013 2014

150

50

350

215(20)

310(28.8)

350(33)

410(38)

325(30)

headlinerent£psf

6

0

10

12

14

16

18

2010 2011 2012 2013 2014

8

2

4


(177

.60

)16

.5

(177

.60

)16

.5

(177

.60

)16

.5

(178

)16

.5

(16

7)

15.5

(177

.60

)16

.5

(177

.60

)16

.5

(177

.60

)16

.5

(18

8)

17.5

(18

8)

17.5

demand000ssqft

200

0

400

500

600

700

800

2010 2011 2012 2013 2014

300

100

200(19)

310(29)

600(56)

310(29)

330(31)

supply000ssqft

200

0

400

500

2010 2011 2012 2013 2014

300

100

390(36)

305(28)

300(28)

300(28) 250

(23)

headlinerent£psf

3

0

5

8

2010 2011 2012 2013 2014

4

2

1

6

7

(67.

27)

6.2

5

(64

.58

)6

(64

.58

)6

(75

.34

)7 (8

6)

8

Investment

Retail & Leisure Lee Southan T 01392 353090 E [email protected]

John Benson T 0117 317 1100 E [email protected] Scott Rossiter T 01392 353089 E [email protected]

3

1. Sandy Park, Exeter

2. CGI of Alphington Retail Park, Exeter

3. The Senate, Exeter2


• DemandfromcelebritychefscontinuestoboostExeter’sprofile.JamieOliverhasconfirmeditwillopenaJamie’sItalianinPrincesshay.

• ThePrincesshaydevelopmentremainsstrongwithlimitedavailability.Theplannedmixedusedevelopmentoftheneighbouringbusstationsitewillboostfootfalltothecitycentre.

out of town rent

• ThefinallettingtoDreamscompletesthelineupatAlphingtonRetailParkwhichstrengthenstheappealofAlphingtonasanoutoftownretaildestination.

• Secondaryretaillocationshaveperformedverywellinsomecases.TheStThomasCentresawarecordrentagreedof£55.00psf(£592psm)althoughthisisn’trepresentativeofthewidermarket.Therehasbeenunprecedenteddemandfrombookmakersandtakeawaysinlocationswithgoodparking.

• TheIKEAeffecthasyettobefeltasconstructionhasnotyetbegunbutalargeincreaseinvisitornumbersisexpected.


• WorkhasstartedattheIntercountysitewithFrankie&Benny’s,ChiquitoandKFCconfirmedatheadlinerentsof£38psf(£409psm).

• TheStAustellBrewery’sredevelopmentofformerbondedwarehousinghasfurtherenhancedExeter’sQuayside.

• ThecontinuedexpansionandadditionofconferencefacilitiesatExeterChiefs’homegroundatSandyParkarewelcomeimprovements.


• Thetotalvolumeofinvestmentactivityin2014was£190m,comparedtojustover£50min2014.

• Theaveragevalueoverthepastfiveyearsis£85.7m.

• 33%ofthetotalismadeupbyonetransaction,the50%saleofthePrincesshayShoppingCentrefor£127.9m,5.6%NIY.

prime yields


- Industrial 6.25%

- Office 6.25%




• ThelargesttransactionoftheyearwasHenderson’spurchaseofa50%stakeofthePrincesshayShoppingCentrefor£127.9m.

• Intheretailwarehousesector,AberdeenAssetManagementpurchasedacirca30,000sqft(2,787sqm)assetonSowtonRetailPark,lettoDunelmandFurnitureVillageforanaverageunexpiredtermof11.25years.Thepurchasepricewas£6.88m,6.25%NIY

• Intheofficesector,ClarendonHouse,WesternWaywaspurchasedfor£3.7m,7.60%NIY.TheofficeislettotheMinistryofPublicBuildingswith19yearsunexpired.

14www.alderking.com

100

150

200

250

50


0

10

20

30

50

2010 2011 2012 2013 2014

40

(18

2.9

9)

17

(18

3)

17

(18

3)

17

(86

.11)

8

(86

)8

(10

8)

10

(18

2.9

9)

17

(430

.54

)4

0

(431

)4

0

(431

)4

0


0

2010 2011 2012 2013 2014

63.3640.42

52.85

190

82.03

primeyields%

5

3

7

8

2012 2013 2014

6

4

20112010

outoftownrent£psf

10

0

20

30

2010 2011 2012 2013 2014

15

5

25

(26

9.0

9)

25

(26

9.0

9)

25

(24

7.5

6)

23

(30

1)2

8

(323

)30


150

0

250

2010 2011 2012 2013 2014

200

100

50

(2,15

2.7

0)

200

(2,15

2.7

0)

200

(2,15

2.7

0)

200

(2,15

3)

200

(2,15

3)

200

HighSt.

investmentbysector

industrial

office

retailhighstreet

retailoutoftown


(118

.40

)12

(86

.11)

8

(29

6)

27.5

(118

.40

)11

(86

.11)

8

office

retailhighstreet

retailoutoftown

other

5%4%

3%

88%

Gloucester 1

Industrial

Offices

(sqm)sqft

Adrian Rowley T 01452 627133 E [email protected]

Adrian Rowley T 01452 627133 E [email protected]

demand

• Take-upduringtheyeartotalled150,000sqft(13,935sqm),up25%onthepreviousyear’sdemand.

• Thelargestandmostsignificanttransactioncomprisedthepre-letof1420GloucesterBusinessParktoHorizonNuclearPowerServiceswhichwillprovide52,000sqft(4,831sqm)withthecapabilitytoexpandto67,000sqft(6,225sqm).

• Demandremainsfocusedonwell-locatedGradeAspace.

supply

• Supplyremainsatexceptionallylowlevels.

• Thisshortageofsupplyispresentinbothprimeandsecondarysectors.

• Thereisnowadistinctabsenceofspaceover5,000sqft(464sqm)andoflargersinglefloorplateoptions.

headline rent

• Theheadlinerentforoutoftownspacehasincreasedto£18.50psf(£199.14psm).

• Theheadlinerentfortowncentrespacehasremainedconstantat£11.50psf(£123.79psm).

demand

• Take-upduring2014totalled400,000sqft(37,160sqm).

• Thefigurerepresentsasubstantialincreaseoverrecentyearsandequalsthefiveyearhigh.

• Significanttransactionsincludethepre-saleofa35,000sqft(3,252sqm)manufacturingbuildingatQuedgeleyWesttoVisionProfilesandatotalof164,000sqft(15,236sqm)intwolettingsatBarnwoodPoint.

supply

• Supplyhasdroppedto250,000sqft(23,225sqm).

• Thisisthelowestlevelexperiencedoverthelastfiveyearsandcomprisespredominantlysecondarystock.

• TwonewspeculativeGradeAbuildingshavebeencompletedcomprisingabuildingof28,000sqft(2,601sqm)atQuedgeleyWestandabuildingof22,000sqft(2,044sqm)atWaterwellsBusinessPark.

headline rent

• Theheadlinerenthasremainedconstantat£6psf(£64.59psm).

• Therecontinuestobeanupwardpressureonrentsduetotheshortageofstockandthepredictedincreaseindesignandbuilddevelopmentactivity.

Key


demand000ssqft

50

0

100

125

150

175

200

225

2011 2012 2013 20142010

75

25

200(19)

100(9)

95(9)

120(11)

150(14)

supply000ssqft

100

0

200

250

300

350

400

2010 2011 2012 2013 2014

150

50

150(14)

250(23)

200(19)

120(11)

150(14)

headlinerent£psf

10

0

20

25

30

2010 2011 2012 2013 2014

15

5

(123

.78

)11

.5

(123

.78

)11

.5

(123

.78

)11

.5

(123

.78

)11

.5

(123

.78

)11

.5

(18

8.3

6)

17.5

(18

8.3

6)

17.5

(18

8.3

6)

17.5

(18

8.3

6)

17.5

(19

9)

18.5


demand000ssqft

200

0

400

500

600

700

2010 2011 2012 2013 2014

300

100

400(37)

400(37)

300(28) 275

(26)

300(28)

headlinerent£psf

2

0

4

5

6

7

2010 2011 2012 2013 2014

3

1

(64

.58

)6

(64

.58

)6

(64

.58

)6

(65

)6

(65

)6

supply000ssqft

400

0

800

1,000

1,200

2010 2011 2012 2013 2014

600

200

450(42) 350

(33) 275(26)

625(30)

250(23)

1. Porsche dealership, Tewkesbury.

2. Tewkesbury Trade Park.

3. Gloucester Quays. Courtesy of Peel.32

Retail & Leisure John Hawkins T 01452 627135 E [email protected]

Investment John Benson T 0117 317 1100 E [email protected] Adrian Rowley T 01452 627133 E [email protected]


• TheopeningofTKMaxxwithinthecoveredEastgateStreetremainsimminentandwillprovideawelcomeboosttothecitycentre.

• TheStanhoperedevelopmentofKingsSquareandthebusstationcontinuestotakeshape,andwillhaveasignificantimpactinrejuvenatingthecitycentreeconomy.

• Demandgenerallyacrossthefourkeygatestreetsofthecitycentre-Eastgate,Westgate,NorthgateandSouthgate-isimprovingwiththenumberofemptyunitsdeclining.

out of town rent

• ThenewMorrisonsstoreandpetrolfillingstationhasfuelledfurtherdemandwithintheoutoftownmarketandaCostaCoffeedrive-thruwillbethefirsttotakeoccupationalongsideMorrisons.

• AnewMcDonaldsrestaurantanddrive-thruhasrecentlyopenedatStOswaldsPark.WrenKitchenswasthelatestretailertoenterthePark,takinghalfoftheformerCometunit.

• AtWhittleSquare,GloucesterBusinessParkthereisjustoneremainingunitof1,000sqft(93sqm),followingthearrivalofAndrewsEstateAgentsandBarnardoswhotookoccupationofadoubleunit.


• TheGloucesterQuayshasexperiencedasignificantupliftindemandandcustomerfootfall,mainlyasaresultoftheopeningoftheCineworld10screencinemawhichhasgiventheDockstheabilitytodrawinmanymorecustomersateveningsandweekends.

• ThenewcinemahasprovidedthecatalystforthearrivalofnewrestaurantsincludingChimichanga,Zizzi’sandEd’sEasyDiner,whichhavefurtherenhancedthenight-timeeconomyofthecitycentre.

• Withinthehealthandfitnesssector,thebudgetgymoperatorsremainactiveandarekeentoacquirealimitedsupplyofsuitableproperties.


• ThevolumeofinvestmentsalesinGloucesterandCheltenhamincreasedsignificantlyto£97.9min2014.

• Themajorityoftransactionswerecarriedoutintheretailsector.

prime yields


- Industrial 6.25%

- Office 6.5%




• ThelargestinvestmenttransactionwasCordeaSavills’purchaseofChurchStreet,BishopsCleeve,Cheltenhamfor£24m,4.25%NIY.ThepropertyislettoTesco.

• Intheofficesector,AvivapurchasedTheQuadranglefor£8.13m,7.64%NIY.TheQuadrangleisamixedusepropertywithretailandrestaurantsonthegroundfloorandofficeson1stto4thfloors.

• TherewereafewdealsintheretailwarehousesectorincludingEasternAvenue,GloucesterwhichsoldtoNewRiverRetailfor£4.25m,8.30%NIY.TenantsareMagnetandPCWorldwithanunexpiredleasetermofcirca8years.

16www.alderking.com


75

0

125

150

175

2011 2012 2013 20142010

100

25

50

15

25

30

35

20

5

10

EastgateSt. KingsWalk

(1,2

91.6

2)

120

(1,2

91.6

2)

120

(1,0

76.4

0)

100

(1,0

76.4

0)

100

(1,0

76)

100

(1,0

76)

100

(1,0

76.4

0)

100

(1,0

76.4

0)

100

(1,0

76)

100

(1,0

76)

100

outoftownrent£psf

10

0

20

25

2010 2011 2012 2013 2014

15

5

(26

9.0

9)

25

(26

9.0

9)

25

(26

9)

25

(26

9)

25

(236

.80

)22


0

2010 2011 2012 2013 2014


(129

.16)

12

(129

.16)

12

(129

.16)

12

(129

)12

(129

)12

(16

1.45

)15

(34

4.4

5)

32

(34

4.4

5)

32

(34

4)

32

(34

4)

32


30

0

60

75

90

105

2010 2011 2012 2013 2014

45

15

57.2

62.98

40.29 41.6

97.9

primeyields%

5

3

7

8

2012 2013 2014

6

4

20112010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

industrial

office

retailhighstreet

retailoutoftown

other

(10

7.6

4)

10

(96

.88

)9

(96

.88

)9

(97

)9

(97

)9

7%

15%14%

41%

23%

Newport

Industrial



1

demand

• Take-upfor2014was47%greaterthan2013and17%abovethefiveyearaverage.

• Therehasbeenanoticeableshiftindemandtowardsbusinessparklocations.

• 46%oftransactionswerelessthan5,000sqft(465sqm).

• NotabletransactionsincludeWelshWatertaking35,000sqftat(3,252sqm)at28West,CelticSpringsandAquisInsuranceManagementtaking14,000sqft1,301sqm)atIntegraHouse.Bothwerefreeholdpurchases.

supply

• Supplyhasremainedconstantduetoalackofnewdevelopmentandthebetterqualitynewlyavailablestockbeingtakenuprelativelyquickly.

• CrownBuildings,ClarenceHouse,MillStreetandChartistToweraccountfor48%ofavailablestock.

• ThereisarealshortageofGradeAstock.

headline rent

• HeadlinerentsremainconstantduetoalackofGradeAstockandlimitednewdevelopment.

• Incentivesarehardeningandwillcontinuetodosothroughout2015,especiallyonthebetterqualitystock.

demand

• Take-updecreasedsignificantlyfrom2013,reachingitslowestlevelinsixyears,withanumberofoccupiersunabletosatisfytheirrequirements.

• 84%ofdealswerelessthan10,000sqft(929sqm)astheinfluenceofSME’scontinuestogrow.

• Conversely,therehasbeena50%increaseinthenumberofactiverequirementsforunitsinthe+100,000sqft(9,290sqm)range.

• Notabledealsincludethelettingof86,000sqft(7,990sqm)atLeewayIndustrialEstatetoFoxHeavyHaulageLimited.

supply

• Totalsupplyincreasedonlastyear’sfigureswithavailabilityatImperialParkand163,970sqft(15,231sqm)atQueenswayMeadows.

• Owneroccupierscontinuetosearchforgoodqualityfreeholdopportunitiesastheamountofgoodqualitystockremainssuppressed.Unitswithyardsareinscarcesupplyandcommandpremiums.

• 66%ofstockcomprisesunitsoflessthan10,000sqft(929sqm),10%downon2013figuresastenantdemandincreasesforunitsofthissize.

headline rent

• Headlinerentsremainedconstantat£4psf(£43.60psm).

• Weexpectupwardspressureonrentallevelsforbetterqualitystock.

Key (sqm)sqft


demand000ssqft

100

0

200

250

2010 2011 2012 2013 2014

150

5043(4)

80(7)

172(16)

78(7)

115(11)

supply000ssqft

200

0

400

500

2010 2011 2012 2013 2014

300

100

446(41)

460(43)

386(36) 345

(32)

360(33)

headlinerent£psf

0

5

10

15

20

2010 2011 2012 2013 2014


(172

.22

)16

(16

1.45

)15

(172

.22

)16

(172

)16

(172

)16

(16

1.45

)15

(139

.93

)13

(139

.93

)13

(129

)12

(129

)12

demand000ssqft

100

0

300

400

500

600

700

2010 2011 2012 2013 2014

200

407(38)

404(38)

652(61)

385(36)

220(18)

supply000ssqft

0

500

750

1,000

1,250

1,500

1,750

2010 2011 2012 2013 2014

250

1,080(100)

1,192(111)

1,104(103)

720(67)

1,008(94)

headlinerent£psf

0

2

3

4

5

6

7

2010 2011 2012 2013 2014

1

4.5(48.44) 4

(43.05)4

(43.05)4

(43)4

(43)

1. ASDA Superstore, Caldicot.

2. Artist’s impression of Friars Walk, Newport. Courtesy of Queensberry Real Estate.

3. Unit 103, Wales One, Magor. Courtesy of Charnwood.

Investment



2 3


• Thevalueofinvestmenttransactionsin2014rosesignificantlyto£52.3mfrom£8.9min2013.£32.3mwasfromoneretailwarehousedealandtheremaining£20mfromWPCarey’spurchaseofAdmiralHouse,NewportQueensway,Admiral’snewly-developedcitycentreofficebuilding.

prime yields


- Industrial 7%

- Office 7%




• 62%oftheinvestmentactivitytookplaceintheretailwarehousesectorwithUBSpurchasingthe136,000sqft(12,635sqm)CwmbranRetailParkfromBritishLandfor£32.3m,6.4%NIY.

• TheothernotabledealwastheacquisitionbyNewYork-listedREITWPCareyofAdmiral’snewcitycentreofficebuildingfromScarboroughGroupfor£20m,6.4%NIY.The80,800sqft(7,507sqm)buildingwascompletedinMay2014ona20yearleasewithatenantbreakoptionat16years.ScarboroughGroupisnowconsideringthesecondphaseofredevelopmentoftheCambrianCentreandaimstoapplyforplanningpermissionlaterthisyear.


• QueensberryRealEstatecontinuestoattractnewtenantsatthe390,000sqft(36,232sqm)FriarsWalkscheme.LatestsigningsincludeH&Mwhohavetaken20,000sqft(1,858sqm)aswellastworestaurantchains.Theschemeisnow60%let.

• QueensberrytogetherwithBywaterPropertieshavealsopurchasedtheadjacent250,000sqft(23,226sqm)KingswayshoppingcentrefromUBSTritonFundwhereanchorsincludeWilkinsons,B&MandPeacocks.AnewSainsbury’sisexpectedtobeannounced.

out of town rent

• SpyttyRetailParkcontinuestostrengthenwithanewCafféNeroandHarvester.

• SportsDirecthasbeenrefusedpermissiontotransformthevacantMegabowlontheretailparkintooneofitslargeststoresintheUK.Ithadbeenhopingtorelocatefromitsexistingsiteandbuythefreeholdwithaviewtooccupyingthebuildinginitsentiretyorsub-lettingpartofthesitetoaseparateretailer.


• Inthecitycentre,FriarsWalkhasrecentlyannouncedanewLasIguanasandLeBistrotPierrewhichwillcomplementCineworldCinemas,Nandos,Cosmo,Frankie&Benny’s,PrezzoandChiquitos.AnewgymwillbeopeninginKingsway.

• InSeptember,theNATOsummitwassuccessfullyhostedbytheCelticManorResortwhere7,500delegatesattendedtogetherwith5,000journalists.Theresorthasalsoannouncedplansforanew£60millioninternationalconferencecentrewithcapacityfor4,000delegates.

18www.alderking.com

20

40

50

60

70

30

10

38%

62%


75

0

125

150

2010 2011 2012 2013 2014

100

50

25

(1,3

45

.44

)12

5

(1,3

45

.44

)12

5

(86

1.08

)8

0

(59

2)

55

(59

2)

55

outoftownrent£psf

10

0

25

35

2010 2011 2012 2013 2014

15

5

30

20

(24

7.5

6)

23

(215

.28

)20 (29

0.6

1)2

7

(26

9)

25

(26

9)

25


0

5

10

15

25

2010 2011 2012 2013 2014


20

(129

.16)

12

(129

.16)

12

(129

)12

(129

)12

(86

.11)

8

(86

.11)

8

(86

)8

(86

)8

(19

3.75

)18

(19

3.75

)18

(19

4)

18

(19

4)

18

(118

.40

)11

(86

.11)

8

(18

8.3

6)

17.5


0

2010 2011 2012 2013 2014

12.938.30 8.9

52.3

16.65

primeyields%

6

4

8

9

2013 20142012

7

5

20112010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

office

retailoutoftown

Industrial

Offices Noel Stevens T 01392 353093 E [email protected]

Noel Stevens T 01392 353093 E [email protected]

demand

• Demandremainsweak.HoweverlettingsatSuttonHarbourtoaccountantsFrancisClarkandRainConsultingshowthereisdemandatthetopendofthemarket,albeitinlimitednumbers.

• Themajorityofoccupiersarestillseekingcosteffectivespacebelow5,000sqft(464sqm).

• Confidenceisreturningandweexpectanincreaseinrequirementstobeseenin2015.

• FurtherinvestmenttocreateasustainablerailnetworkacrosstheSouthWestpeninsulaisvitaltosupportingbusinessactivity.

supply

• GradeAspaceisavailableonadesignandbuildbasisbutgoodqualityexistingstockisfewandfarbetween.

• Althoughsupplyhasincreasedoverall,theavailabilityofgoodqualitysecond-handstockislimited.Thereareonlyahandfulof10,000sqft(929sqm)plusoptionsavailable.

• TheShipatDerrifordisthelargestavailablespaceoffering51,065sqft(4,774sqm)ofoffices.Itcanbeconvertedtoprovideatotalof115,000sqft(10,684sqm).

• A£1.98mCouncilloantohelpunlockfurtherfundingfortheexpansionofPlymouthScienceParkwasapprovedinlate2014.

headline rent

• HeadlinerentsarebeingdrivenbythelettingsatSuttonHarbourat£16psf(£172psm).

• Themajorityofspaceisavailableinthe£10-£12.50psf(£108-£135psm)range.

demand

• Demandforcost-effectivespacecontinueswithMacfarlanePackagingacquiring12,600sqft(1,171sqm)atDrakeMillBusinessPark.

• Thelargestrecenttransactionwasthefreeholdacquisitionof24,378sqft(2,265sqm)at62ValleyRoad,PlymptonbyWakeman&SonsLtd.

supply

• Thedropinsupplyisattributedtoalackofnewbuildinthemarketanddemolitionofdilapidatedbuildings.

• SupplywillincreaseoverthecomingyearsasspaceatSouthYardbecomesavailable.Giventheproximitytowharfage,thiswillmeettherequirementsfromthemarinesectors.

• Weareseeingtheimpactofalackofdevelopmentreflectedinthequalityoftheremainingstock.

• Thebreak-upoflargebuildingshelpsmeetdemandforsmallerpremises.

headline rent

• Therewasnomovementinheadlinerentsin2014.

• Howeversmallunitsandtradecountersareseekingrentsinexcessof£6psf(£65psm).

Plymouth

(sqm)sqftKey


demand000ssqft

100

0

200

250

2011 2012 2013 20142010

150

50

90(8)

95(9)

145(13)

95(9)

100(9)

supply000ssqft

200

0

400

500

2010 2011 2012 2013 2014

300

100

325(30)

330(31)

360(33) 310

(29)

400(37)

headlinerent£psf

15

0

20

2010 2011 2012 2013 2014

5

10

(16

6.8

3)

15.5

(16

6.8

3)

15.5

(16

6.8

3)

15.5

(16

7)

15.5

(172

)16


(172

.22

)16

(172

.22

)16

(16

2)

15

(16

2)

15

(16

2)

15

demand000ssqft

200

0

400

500

2010 2011 2012 2013 2014

300

100

200(19)

250(23)

500(46)

290(27)

230(21)

supply000ssqft

500

0

1,000

1,250

1,500

2010 2011 2012 2013 2014

750

250

1,000(93)

715(66)

720(67)

550(51)

1,400(130)

headlinerent£psf

2

0

4

7

2010 2011 2012 2013 2014

3

1

5

6

(64

.04

)5

.95

(64

.04

)5

.95

(64

.04

)5

.95

(64

)5

.95

(64

)5

.95

1

1. Plymouth Science Park. Courtesy of Plymouth Science Park.

2. Artist’s impression of South Yard, Plymouth. Courtesy of LHC.2

Investment

Retail & Leisure

John Benson T 0117 317 1100 E [email protected] Rossiter T 01392 353089 E [email protected]


• DemandremainsfocusedaroundDrakeCircuswithnewopeningsfromJackWillsinapop-upstoreandthenewretailofferingfromTheoPaphitis’sbrandBouxAvenue.

• AnewfouracremixedusedevelopmentOceanBoulevardisplannedforPlymouth.Theschemewillinclude37,000sqft(3,437sqm)ofretailcomplementingasupermarket,studentaccommodationandhotels.

• ThehighstreetsawnewlettingstoSaltrock,OpticalExpressandGamesWorkshop.

out of town rent

• RentshaveincreasedwithheadlinefiguresagreedatMarshMillsandBroadwayShoppingCentre,Plymstock.

• Outoftownstockremainedfairlystaticwithnewstockcomingtothemarketatasimilarpacetothatbeingoccupied.

• MutleyPlainsawanumberoflongstandingvoidsfillupin2014.

• Theoutoftownmarketsawanincreaseinfreeholdsales.Bothvacantandinvestmentopportunitiessawanupturnindemand.


• PlymouthremainspopularwithnewrestaurantsincludingTheStable,TheSamphireBushandLeBistrotPierreallopeninglastyear.

• BritishLandannounceditistodevelopDrakeCircusLeisure,acirca100,000sqft(9,290sqm)leisureschemenexttoDrakeCircusShoppingCentre.The£40milliondevelopmentwillincludea12screencinemaoperatedbyCineworld,13restaurantunitsand450carparkspaces.


• Therewasasignificantincreaseininvestmenttransactionscomparedto2013.Thelevelhasincreasedfrom£9.63mtoover£70m.Thisisthehighestlevelsince2010.

prime yields


- Industrial 6.25%

- Office 7%




• Approximately20%ofthedealswereintheindustrialsectorwithlotsizesrangingfrom£1.7mtoover£6m.ThelargestofthesewasthepurchaseofFaradayMillTradeParkbyParabolaCapitalfor£6.3m,11.6%NIY.Thecirca135,000sqft(12,542sqm)tradeparkismulti-lettovarioustenants.

• AnothersignificantdealwastheacquisitionbyOvalRealEstateofLangageOfficeCampusfor£11.56m,7.75%NIY.TheofficeislettoEEwithaleaseexpiryin2028.

• DerrifordHospital,anewlycompleteddevelopment,soldtoAvivafor£22m,6.1%NIYattheendof2014.83%oftheincomeisfromthecarparkandtheremainderfromofficeandretailtenants.

Lee Southan T 01392 353090 E [email protected]

20www.alderking.com

100

200

250

300

350

150

50


150

0

250

2010 2011 2012 2013 2014

200

100

50

(1,8

83.

61)

175

(1,8

83.

61)

175

(1,6

14.6

0)

150

(1,6

15)

150

(1,6

15)

150

outoftownrent£psf

10

0

20

30

2011 2012 2013 2014

15

5

2010

25

(24

2.18

)22

.5

(24

2.18

)22

.5

(24

2.18

)22

.5

(?)

20.5

(26

9)

25


0

5

10

15

20

2010


(139

.93

)13

(10

7.6

4)

10

(19

3.74

)18

2011

(139

.93

)13

(86

.10)

8

(16

1.46

)15

2012

(139

.93

)13

(86

.10)

8

(16

1.46

)15

2013 2014

(14

0)

13

(14

0)

13

(86

)8

(86

)8

(16

1)15

(16

1)15


0

2010 2011 2012 2013 2014

278.2

9.63

71.5

13.62

primeyields%

6

4

8

9

2011 2013 20142012

7

5

2010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown26.33

5%

56%17%

industrial

office

retailhighstreet

retailoutoftown

other

22%

Swansea 1

Industrial



demand

• Take-upremainedatsimilarlevelsto2013andstillsubstantiallybelowthefiveyearaverageof100,000sqftperannum(9,290sqm).

• Therewerelessthan30transactionsthroughout2014,themostnotableofwhichincludedTuiTraveltaking14,500sqft(1,347sqm)atAlexandraHouseandTheNationalAutisticSocietytaking2,559sqft(238sqm)at6PhoenixWay.

supply

• Availabilitydecreasedslightlyduetoalackofnewdevelopmentcorrespondingwithtake-up.

• Over80,000sqft(7,432sqm)ofhighqualitybuildingsstillremainatCruciblePark,SwanseaVale,sincefirstbecomingavailablein2008.

headline rent

• Rentsremaininlinewith2013levels.

• WithlittlemodernaccommodationavailableinSA1andthecitycentre,headlinefiguresshouldbemaintainedinto2015.

• Outoftownrentsandincentivesshouldcontinueatthesamelevelthrough2015.

demand

• 2014sawasubstantialincreaseintake-upincludingthelettingof182,000sqft(16,908sqm)toTrojanElectronics,turningtheformerKingsDockBuildingintoitsnewHQ.

• ExcludingtheTrojandeal,take-upsignificantlyimprovedfromsameperiodin2013.

• Approximately60%oftake-upisaccountedforbyunitsof5,000sqft(465sqm)orless.

supply

• Supplyfellin2014duetoincreaseddemandwhichincludedtransactionssuchasthesaleofthe222,391sqft(20,661sqm)formerSignodeFactoryonFabianWayaccountingfor13%ofthepreviousyear’savailablespace.

• Stockprovidinglessthan10,000sqft(929sqm)accountsforapproximately77%ofallavailablestock.

headline rent

• Overthepastthreeyearsrentallevelshaveremainedunchanged.

• Thehighproportionofexistingsecondarystockandthelimitedamountofnewstockbeingbroughttothemarkethavehinderedrentalgrowth.

(sqm)sqftKey (sqm)sqftKey


demand000ssqft

0

100

150

200

250

2010 2011 2012 2013 2014

50

163(15)

108(10)

68(6)

62(6)54

(5)

supply000ssqft

0

100

200

300

400

600

2010 2011 2012 2013 2014

500566(53)

490(46)

473(44) 430

(40)

521(48)

headlinerent£psf

15

0

20

2010 2011 2012 2013 2014

5

10


(15

6.0

7)

14.5

(14

8)

13.7

5

(15

6.0

7)

14.5

(15

6)

14.5

(15

6)

14.5

(123

.78

)11

.5

(115

.71)

10

.75

(115

.71)

10

.75

(116

)10

.75

(116

)10

.75

demand000ssqft

0

200

400

600

800

1,200

2010 2011 2012 2013 2014

1,000

472(44)

461(43)

795(74)

180(17)

634(59)

supply000ssqft

1,000

0

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

1,500

500

2,755(256)

2,755(258)

2,315(215)

1,724(160)

1,602(149)

headlinerent£psf

2

0

4

5

6

7

2010 2011 2012 2013 2014

3

1

4.2(45.21)

4.2(45.21)

4.2(45)

4.2(45)

4.35(46.82)

1. Salubrious Place, Swansea. Courtesy of Mansford Real Estate.

2. CGI of Parc Tawe, Swansea. Courtesy of Hammerson.

3. CGI of Oyster Wharf, The Mumbles. Courtesy of Nextcolour Developments Ltd.32

Investment




• ThetotalvolumeofinvestmenttransactionsinSwanseafor2014was£26.37m.Thisisareducedlevelcomparedto2013but65%ofthe2013figurewasattributabletoonesingletransaction-M&G’s45yearincomecommitmenttoprovide£32mofdevelopmentfinanceforstudentaccommodationatSwanseaUniversity.

prime yields


- Industrial 7.25%

- Office 7.5%




• Thelargesttransactionduring2014wasintheleisuresector.InFebruary2014,MansfordRealEstatepurchasedSalubriousPlacewhichoffersa116bedPremierInnHotel,aVueCinema,nightclub,casinoandanNCPcarpark,for£24.10m.

• Inthehighstreetretailsector,GreenstoneStirlingpurchased58-60TheKingswayfor£1.77m,8.00%NIY.ThepropertyislettoTheCo-Opforafurther9.5years.

• Lookingattheindustrialsector,Unit1PembertonRetailPark,Llanellisoldfor£500,000,7.10%NIY.TheunitislettoScrewfixona10yearleasefromJanuary2014.


• Theproposedtowncentreregenerationremainsuncertainwhilstanewdeveloperissought.Thishasnodoubthadaneffectondemand.

• YoursClothinghastakenspaceat801OxfordStreetandSweetScentandIcelandhavebothtakenspaceintheQuadrantCentre.

out of town rent

• Hammersonhasgainedconsentfora240,000sqft(22,296sqm)refurbishmentofitsParcTaweschemebutiscurrentlyappealingcertainplanningconditionsinordertofacilitateastartonsiteinsummer2015.

• NextcolourDevelopmentsLimitedhascommencedpreliminaryworksatOysterWharf,Mumbles’waterfrontdevelopmentwhichwillincluderestaurants,newretailstoresandaspa/gym.


• A3demandremainsstrongwithanewlettingtoLasIguanasreinforcingWindStreetastheprimeleisurelocation

• ThevastmajorityofTheBoulevardscheme,betweentheRiverTawebridgesandPrincessWay,iscomplete.Thiswillgeneratebetterlinksbetweenthecitycentreandthewaterfrontandbecomeafarmorepedestrian-friendlyenvironment.

22www.alderking.com

7%

(1,2

37.8

0)

115

(1,18

4)

110

(1,18

4)

110

(1,0

76)

100

(1,0

76)

100


75

0

125

150

2010 2011 2012 2013 2014

100

50

25

outoftownrent£psf

0

20

50

2010 2011 2012 2013 2014

10

40

30

(376

.72

)35

(376

.74

)35

(376

.74

)35

(377

)35

(377

)35


0

5

10

15

25

2010 2011 2012 2013 2014

cinema health&fitness A3

20

(118

.40

)11

(129

.17)

12

(129

.17)

12

(129

)12

(129

)12

(10

7.6

4)

10

(10

7.6

4)

10

(96

.88

)9

(97

)9

(97

)9(16

1.45

)15

(18

2.9

9)

17

(18

2.9

9)

17

(215

)20

(215

)20


40

0

80

100

120

140

2010 2011 2012 2013 2014

60

20

17.9

113.9

8.65

49.64

26.37

primeyields%

5

3

7

8

2012 2013 2014

6

4

20112010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

2%

91%

industrial

retailhighstreet

other

Swindon

Industrial

Offices

(sqm)sqft

James Gregory T 01793 428106 E [email protected]

James Gregory T 01793 428106 E [email protected]

1

demand

• 2014witnessedthehighestleveloftake-upsincebeforetherecession.

• SignificantoutoftowndemandcamefromNationwidewhichtook29,000sqft(2,694sqm)attheTrilogyBuildingatKembreyParkandSwindonSiliconSystemswhichtook34,000sqft(3,159sqm)atInterfaceHouse,RoyalWoottonBassett.

• Therewasasignificantimprovementinthetake-upofintownofficebuildings,withmanyserviceprovidersfortheelectrificationofthemainlinerailwayseekingrepresentationclosetothestation.Intowntransactionsrepresented30%oftake-up.

supply

• Overallsupplyreducedasaresultofanimprovedlevelofdemandfromofficeoccupiers.

• Therehasalsobeenareductionofsupplyaspoorerqualitystockisconvertedforresidentialuse.Thishasinmostcasesbeenwholevacantbuildingsbutithasledtosomedisplacementofofficeoccupiers.

• Thereisnowaverysmallsupplyofgoodqualitylargerformatofficeaccommodationandthishasledtosomespeculativerefurbishmenttakingplace.

• Supplyisexpectedtocontinuetofallasaresultofimproveddemandfrombothofficeoccupiersandresidentialdevelopers.

headline rent

• Towncentrerentshaveshownasmallimprovementduetoanoverallreductioninopportunitiesforoccupiers.

• Quotingrentsarebeingreviewedinmanycasesaslandlordsseektotakeadvantageofimprovedmarketconfidence.

• Tenantincentivesarereducingaslandlords’confidencebeginstoimprove.

demand

• Demandduring2014wasatitslowestlevelsincebeforetherecessionbutthenumberoftransactionscontinuedatasimilarleveltopreviousyears.

• Therewasanabsenceoflargetransactionsin2014whichhasimpactedannualtake-up.

• Thelargestlettingin2014wasSignallingSolutionsLimited’smovetoDorcanIndustrialEstatecloselyfollowedbyAlditakingtwofurtherbuildingsatSouthMarstonPark.

• Thereareseverallargelongtermrequirementswhichareanticipatedtocometofruitionearlyin2015.

supply

• TherehasbeenalimitedreductionofsupplyastheformerTriumphandTDPackagingbuildings,bothatGroundwellIndustrialEstate,becamevacantin2014.

• ThereisonespeculativenewbuildschemeprovidingvariousbuildingsatthesiteoftheformerFarepakbuildingatWestmeadandthe100,000sqft(9,290sqm)MetroBuildingatGroundwellIndustrialEstateisbeingcomprehensivelyrefurbished.

• Themostactivesectorofthemarketthroughout2014wassub5,000sqft(465sqm)withsome57%oftransactionstakingplaceinthissizebracket.

headline rent

• Therewerecasesin2014wherethequotingrentswereachieved-adirectresultofthelowlevelofgoodqualitystock.

• Incentivessuchasrentfreeperiods,steppedrentalarrangementsandlandlordspayingfortenantfit-outworksarereducing.

• Thereisaclearcorrelationthattenantswillpayforbetterqualityaccommodation.Neworrefurbishedspaceisfindingoccupiersmoreeasily.Poorqualityspaceisincreasinglydifficulttolet.

Key


demand000ssqft

100

0

200

250

300

350

400

2011 2012 2013 20142010

150

50

205(19)

85(8)

170(16)

199(18)

227(21)

400

0

800

1,000

1,200

1,400

1,600

2011 2012 2013 20142010

600

200

1,306(121)

1,320(123)

1,150(107) 1,020

(95)

790(73)

supply000ssqft headlinerent£psf

0

5

10

15

20

2011 2012 2013 20142010


(19

9.12

)18

.5

(172

.22

)16

(172

.22

)16

(18

8)

17.5

(18

8)

17.5

(16

9.5

3)

15.7

5

(16

9.5

3)

15.7

5

(16

9.5

3)

15.7

5

(16

1)15

(172

)16

demand000ssqft

400

0

800

1,000

1,200

1,400

1,600

1,800

2010 2011 2012 2013 2014

600

200

1,823(169)

1,184(127)

986(92)

557(52)

1,043(97)

supply000ssqft

1,000

0

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

1,500

500

2,625(244)

1,900(176)

1,800(167)

1,723(160)

2,302(214)

headlinerent£psf

2

0

5

7

2011 2012 2013 20142010

3

1

6

4

(72

.65

)6

.75

(72

.65

)6

.75

(72

.65

)6

.75

(73

)6

.75

(73

)6

.75

1. Newsquest Offices, Old Town, Swindon.

2. 67K Athena Avenue, Swindon

3. CGI of Regent Circus, Swindon. Courtesy of Ashfield Land.2

Investment

Retail & Leisure James Gregory T 01793 428106 E [email protected]

John Benson T 0117 317 1100 E [email protected] James Gregory T 01793 428106 E [email protected]

3


• ThemajorityoftheRegentCircusdevelopmentopenedinNovemberandDecember;theCineworldisduetoopeninFebruary.Notonlyhastheschemeimmediatelychangedhandswithverystronginvestorappetite,theimprovementtotheimmediatevicinityandoccupierdemandiscleartosee.

• H&Mistakinganew25,000sqft(2,326sqm)storeinTheParadeinthetowncentre.

• FurtherpublicrealmprojectsareplannedforthetowncentreincludingHavelockSquare,demonstratingtheoptimismforthemainretailarea.

out of town rent

• GreatWesternWayhasseenMcDonaldsopenanewtwostoreydrive-thrufacilityandWrenKitchensiscurrentlyonsitecarryingoutacompleterebuildoftheformerFerraricarshowroom.

• WaitroseopeneditsfirstSwindonoperationatWichelstoweandistradingwellaheadoftarget.

• AldihassecuredplanningpermissionforitsfourthoutletinSwindonatShawinWestSwindon.


• TheextensionoftheOutletCentrebyMcArthurGlen/HendersonInvestorsisnowcomplete.Thishasallowedseveralexistingoccupiers,includingMarks&SpencerandNext,toexpandaswellasattractingnewretailers.NewoperatorstothefoodcourtincludingWagamamahavealsobeensecured.

• Followingajointventureagreement,severalleisurefacilitiesownedbySwindonBoroughCouncilarenowtoberefurbishedandrunbyGreenwichLeisureLimited.


• Therewasanincreaseofcirca14%inthevalueofinvestmenttransactionsinSwindonoverthelastyear,£76.5mbeingthehighestvalueoftransactionsseensincepre-2009.

prime yields


- Industrial 6.5%

– Office 6.5%

– Retailhighstreet 6.5%

– Retailoutoftown 5.75%


• OneofthelargestinvestmenttransactionsinSwindonwastheacquisitionatSouthMarstonParkbyLondonMetricinMarchfor£22.1m,6.45%NIY.OakFurnitureLandisthetenantwith8yearsunexpired.Thedistributioncentrehasun-implementedplanningconsentfora150,000sqft(13,935sqm)extension.

• Anothersignificanttransactionwasintheleisuresector.RegentCircuswaspurchasedbyUKCPTLtdfor£40.50m,5.30%NIY.TenantsincludeMorrisonsandCineworld.

• Intheofficesector,DrakesMeadowlettoThringsLLPuntil2021waspurchasedfor£3.8m,10%NIY.

24www.alderking.com


0

5

10

15

20

25

30

2011 2012 2013 20142010


(118

.40

)11

(96

.87

)9

(19

3.74

)18

(118

.40

)11

(96

.87

)9

(19

3.74

)18

(118

.40

)11

(96

.87

)9

(19

3.74

)18

(118

.40

)11

(96

.87

)9

(19

3.74

)18

(16

1)15

(322

.92

)30


0

40

60

80

100

2010 2011 2012 2013 2014

20


150

0

250

2010 2011 2012 2013 2014

200

50

100

RegentSt. BrunelCentre

(1,0

76.3

5)

100

(1,0

76.3

5)

100

(1,8

29.8

0)

170

(1,8

29.8

0)

170

outoftownrent£psf

15

0

25

35

2010 2011 2012 2013 2014

20

5

10

30

(30

1.38

)28

(30

1.38

)28

(30

1.38

)28

(30

1)2

8

(30

1)2

8

primeyields%

6

4

8

9

2012 2013 20142011

7

5

2010

investmentbysector

62.5

3.77

67.2

76.5

38.2 industrial

office

retailhighstreet

retailoutoftown

industrial

office

other

(74

3)

80

(74

3)

80

(74

3)

80

(1,6

14.5

8)

150

(1,6

15)

150

(1,6

15)

150

37%

10%

53%

(97

)9

Taunton 1

Industrial

Offices

(sqm)sqft



demand

• Leaseholdenquirieswererelativelyconsistentthroughout2014.

• Demandfortheoutoftownmarketispolarised,withamajorityatsub3,000sqft(279sqm)andsomefurtherdemandbetween10,000-20,000sqft(929–1,851sqm).

• Localoccupiersareincreasinglyconfidentintheirattitudetowardsrelocationinordertoimprovetheiraccommodation.

supply

• Anumberofbuildingsremainedavailablethroughout2014inboththetowncentreandoutoftownmarket,althoughtheytendtobeoflowerquality.

• Themajorityofaccommodationisstillwithinthetowncentreandisofmixedquality.

• Changesinthepublicsectoraccommodationstrategycouldseefurtheraccommodationenterthemarketin2015.

headline rent

• Nonewbuildswereundertakenin2014,eitherintownoroutoftown.

• Incentivelevelsremainedbroadlysimilarto2013andarestillgenerallylowerintheoutoftownmarket.

• Towncentrerentalscontinuetobedepressedbytheimbalanceindemandandsupply.

demand

• RequirementsfortheM5aroundtheTauntonareaimprovedconsiderablyin2014.

• DemandfromHinkleyCsupplychaincompaniesstartedtoincreaseinQ42014andislikelytocontinuein2015assumingthefinalinvestmentdecisionismadeinQ12015.

• Demandfromlocalcompaniesandthedistributionsectorhasincreasedandsentimentismuchmorepositive.

supply

• SupplyroseslightlyduringtheyearbutthereisstillanundersupplyofaccommodationwithintheTauntonmarket.

• Thisunder-supplyisparticularlyconcerninginthe20,000-50,000sqft(1,858–4,645sqm)sizerange,especiallygiventheincreaseddemandforunitsofthissize.

• SpeculativedevelopmenthasbeenseeninneighbouringtownsbutthereisstillalackofimmediateopportunitiesinTaunton.

headline rent

• Rentsremainedstablewithsomeimprovementforsecondarypropertyrentallevels.

• Itisverylikelythatrentswillincreasein2015asdemandcontinuestooutstripsupply.

• Incentivelevelsarelikelytoreduceascompetitionforpropertiesincreases.

Key


demand000ssqft

50

0

100

125

150

2010 2011 2012 2013 2014

75

25

100(9)

110(10)

90(8)

120(11)

120(11)

supply000ssqft

50

0

100

125

150

175

200

2010 2011 2012 2013 2014

75

25

170(16) 165

(15)156(14)

160(15)

164(15)

headlinerent£psf

6

0

10

12

14

16

18

2010 2011 2012 2013 2014

8

2

4


(18

2.9

8)

17

(18

2.9

8)

17

(18

2.9

8)

17

(18

3)

17

(18

3)

17

(177

.60

)16

.5

(177

.60

)16

.5

(177

.60

)16

.5

(178

)16

.5

(178

)16

.5demand000ssqft

0

100

200

300

400

500

2010 2011 2012 2013 2014

180(17)

200(19)

250(23)

395(37)

160(15)

supply000ssqft

100

0

200

250

300

2010 2011 2012 2013 2014

150

50

250(23)

250(23) 220

(20)

285(26)

270(25)

headlinerent£psf

2

0

4

8

2010 2011 2012 2013 2014

3

1

6

5

7

(64

.58

)6

(64

.58

)6

(69

.96

)6

.6

(75

)7

(75

)7

1. Artist’s impression of Network Rail’s proposed redevelopment of Taunton railway station.

2. Unit 6K6, Blackbrook Business Park, Taunton.

3. Third Way Bridge, Taunton. Courtesy of Graham Shaw.2 3

Investment

Retail & Leisure Andrew Maynard T 01823 444879 E [email protected]

John Benson T 0117 317 1100 E [email protected] Maynard T 01823 444879 E [email protected]


• Occupancylevelsremainrelativelystrongintheprimeandsecondaryareasofthetown.

• Severalnationalretailersandrestaurantschainsareinadvancediscussionstotakespaceinthetown,whichbodeswellfor2015.

• TauntonRethink,astudytoconsiderthefuturedirectionofthetowncentre,waspublishedatthebeginningof2014.GoodprogresshasbeenmadewithproposalsfortheFirepoolregenerationareatothenortheastofthehistorictowncentre,includingretailandleisureactivities.

out of town rent

• Constructionofthenortherninnerdistributorroadisprogressingandwillimproveaccessibilitythroughthetown,potentiallyopeningupnewopportunitiesaswellasimprovingsomeexistingschemes.

• AplanningapplicationfortherelocationofLidltoanewsiteinCastleStreet(oppositeTesco)islikelytobedecidedinQ12015.Elsewherethesupermarketshavebeenquiet.


• TherehasbeenincreasinginterestinthetownfromA3/A4operatorswithanumberofdealslikelytofallintoplacein2015.Nando’sopenedinForeStreetduring2014.

• FurthernewopportunitieswithinthetownwillonlybepossiblewithlargemixeduseschemesatFirepool,CoalOrchardandtheOrchardShoppingCentre.


• Thetotalvolumeofinvestmenttransactionsin2014fellbycirca21%from£21.45min2013to£17.02m.Theaverageinvestmentvalueoverthelastfiveyearsis£18.93m.

• ThelargestinvestmentdealwasintheretailwarehousesectorwithStJohnsRetailParksellingfor£6.66m.

prime yields


- Industrial 6.75%

- Office 6.75%




• ThelargestretailwarehousetransactionwasthesaleofStJohnsRetailParkinJune2014toThreadneedlefor£6.66m,7.45%NIY.TenantsareGoOutdoorsandDFSwithcirca16yearsunexpired.

• Inthehighstreetretailsector,CBREGlobalInvestorspurchased47-50ForeStreet,lettoWHSmithfor10years,for£2.9m,6.50%NIY.

• Intheofficesector,thecirca63,000sqftRiversideChamberssoldinMarchfor£4.9m,15.6%NIY.

26www.alderking.com

20

30

40

50

10


15

0

25

2010 2011 2012 2013 2014

20

10

5 (129

.16)

12

(129

.16)

12

(129

)12

(129

)12

(10

7.6

4)

10

(129

.16)

12


0

50

75

100

125

175

EastSt. OldMarketCentre

25

(96

8)

90

(96

8)

90

(96

8)

90

(96

8)

90

(96

8)

90

150

outoftownrent£psf

10

0

20

25

20112012 2012 2013 20142013 2014

15

5

201020112010

(20

4.5

1)19

(20

4.5

1)19

(20

4.5

1)19

(20

5)

19

(20

5)

19


0

2010 2011 2012 2013 2014

14.03

21.45

17.02

36.10

6.03

primeyields%

5

3

7

8

2011 2013 20142012

6

4

2010

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

(86

.11)

8

(86

.11)

8

(86

)8

(86

)8(1

61.4

5)

15

(16

1.45

)15

(16

1)15

(172

)16

17%39%

15%

29% office

retailhighstreet

retailoutoftown

other


Truro 1

Industrial

Offices Tom Duncan T 01872 227005 E [email protected]

Tom Duncan T 01872 227005 E [email protected]

demand

• Officetake-upincreasedforthefirsttimeinfiveyearsbutisstillbelow2010levels.

• Asingletransactioncanhaveasignificantimpactonthefiguresduetothesizeofthemarket.

• Themarketisfurtherdistortedbytheacquisitionofsomebuildingsforalternativeuse-whereidentifiedtheseareexcluded.

• Preferenceremainsformoderncitycentreaccommodationwithcarparking.

• DemandatTruroBusinessParkhasimprovedwithanumberoftransactionstakingplace.

• Thereareincreasedfreeholdoccupierenquiries.

supply

• Thesupplyofofficeaccommodationincreasedcomparedto2013.

• Somelargerfreeholdbuildingsreceivedmoreinterestfromapplicantslookingforachangeofuse.

• Therecontinuestobeanover-supplyofsecondaryaccommodationabovegroundfloorwithnoparkinginthecitycentre.

• WhilethereissomenewdevelopmentproposedatTruroBusinessPark,suchdevelopmentisgenerallyonlyviablewiththeassistanceofgrantfunding.

headline rent

• Groundfloorcitycentreofficeswithparkingcanachieveapremiumrentalforcertainoccupiergroups.

• Shorterleasetermswithfiveyearorearlierbreakclausesarebecomingmorecommon.

• Inconjunctionwiththeabove,incentivesintheformofinitialrentfreeperiodsorsteppedrentalarrangementsarestillcommon.

demand

• Demandincreasedslightlyalthoughthefiguresreportedcanbedistortedbyasmallnumberofindividualtransactions.

• DemandremainsfocusedonmodernaccommodationwithgoodaccesstotheA30.

• Demandisoftenlatentandnotapparentuntilaspecificpropertycomestothemarket.

• Unsatisfieddemandexistsinlocationswithalackofsupply,oftenasaresultofageingstockandlimiteddevelopmentoverrecentyears.

• Increasedfreeholdoccupierenquiriesarebeingreceived.

supply

• Supplyhasincreasedfromthepreviousyear.

• Newdevelopmentisgenerallyonlyviablewiththeassistanceofgrantfunding.ThelatestbandofERDFfundinghasended,withfurtheravailabilitynotanticipatedtocomeonstreamuntilmid-2015.

• Thereisanover-supplyofolderaccommodationandanunder-supplyofmodernspace.

• TherehavebeentworecentgrantfundedschemesinCornwall.ThedevelopmentatQuintrellDownsnearNewquayisalltakenbutfurthersupplywillnotbeforthcomingwithoutgrantfunding.

headline rent

• Rentshaveremainedsteadyforprimemodernindustrialaccommodation.

• TenantsaregenerallyrequestingshorterleasetermswithmorefrequentOptionstoBreak.

• Incentivesintheformofrentfreeperiodsorsteppedrentalarrangementsarebecomingmorecommon,especiallyinolderaccommodation,inordertosecurelettings.

• Owneroccupierorpersonalpensionfunddemandforfreeholdsisbecomingmorepopular,especiallyforsmallerbusinesses.

(sqm)sqftKey (sqm)sqftKey


2010

demand000ssqft

20

0

40

50

60

2010 2011 2012 2013 2014

30

10

50(5)

40(4)

25(2)

55(5)

58(5)

supply000ssqft

100

0

200

250

2010 2011 2012 2013 2014

150

50

170(16)

200(19)

200(19)

125(12)

187(17)

headlinerent£psf

4

0

8

16

2010 2011 2012 2013 2014

6

2

(113

.02

)10

.5

(118

.40

)11

14

12

10

demand000ssqft

100

0

200

250

300

350

2011 2012 2013 2014

150

50 60(6)

80(7)

200(19)

217(20)

90(8)

supply000ssqft

200

0

400

500

600

2010 2011 2012 2013 2014

300

100

200(19)

400(37)

480(45)

380(35)

437(41)

headlinerent£psf

4

0

8

10

2010 2011 2012 2013 2014

6

2

(75

.34

)7

(75

.34

)7

(75

.34

)7

(75

)7

(75

)7

(91.4

9)

8.5

(91)

8.5

(91)

8.5


(118

.40

)11

(118

)11

(118

)11

1. Lysnoweth House, Truro.

2. Brunel Business Park, St Austell.

3. Old Vicarage Place, St Austell.2 3

Investment

Retail & Leisure Tom Duncan T 01872 227005 E [email protected]

John Benson T 0117 317 1100 E [email protected] Tom Duncan T 01872 227005 E [email protected]


• Trurovacancyrates–alreadybelowthenationalaverage–droppedinthesecondhalfof2014.

• Primarkconfirmeditwilltake50,000sqft(4,645sqm)inLemonQuay,resultinginotherrelocationsandextensionofthebuilding.

• 3Storehastakentheformergamingshopat6PydarStreet.

out of town rent

• TherewaslimitedoutoftownactivityinTruroin2014.

• AnewWaitroseisnowwellunderconstructionontheeasternsideofthecity.

• HelicalRetailhassubmittedplansfor90,000sqftofnon-foodretaildevelopmentontheTruroCityFootballClubsite.

• Furtherapplications,includingfoodstoreproposals,arebeingconsideredintheThreemilestonearea.


• TheretirementsectorisparticularlyactivewithMcCarthy&Stonewell-progressedwithitsredevelopmentontheformerBrookdaleHotelsite,andChurchillunderwaywiththeredevelopmentoftheformerPoliceStationsite.

• DiscussioncontinuesregardingthepossibleconstructionofaStadiumforCornwallatWestLangarth.


• Thevalueofinvestmenttransactionsfellsignificantlyin2014from£42.75mto£14.05m.However£40mofthe£42.75mtotalfor2013wasmadeupbythesaleofLemonQuay,amulti-letretailparadethatsoldtoCorboLtd.

• Themajorityofthe2014valueisintheretailwarehousesector.

prime yields


- Industrial 6.5%

- Office 7%

- Retailhighstreet 5%



• ThelargesttransactionwasThreadneedle’spurchaseofNewquayRoadRetailParkinJulyfor£10.1m,6.57%NIY.Tenantsatthecirca50,000sqft(4,645sqm)retailparkincludeHarveys,Dunelm,DreamsandHobbycraft.

• TheothertransactionwasColliersCapital’spurchaseof11-12BoscawenStreet.ThetenantisWaterstonesandthepropertywassoldfor£3.95m,6.50%NIY.

28www.alderking.com

10

30

40

50

60

20

outoftownrent£psf

10

0

20

25

2010 2011 2012 2013 2014

15

5

(215

.27

)20

(215

.27

)20

(215

.27

)20

(215

)20

(215

)20

10

0

20

25

2010 2011 2012 2013 2014

15

5

(26

9.0

9)

25

(26

9.0

9)

25

(215

)20

(215

)20

(215

)20



0

2010 2011 2012 2013 2014

14.76

42.75

14.05

6.940

primeyields%

6

4

8

9

2013 20142012

7

5

20112010


75

0

125

175

20102010 2011 2012 2013 2014

100

25

50

150

(1,3

45

.5)

125

(1,3

45

.5)

125

(1,18

4)

110

(1,18

4)

110

(1,18

4)

110

PydarSt.

investmentbysector

industrial

office

retailhighstreet

retailoutoftown

A3/A4

72%

28% retailhighstreet

retailoutoftown

A service overview

Agency & DevelopmentOurAgencyandDevelopmentteamshaveareputationforexcellence,deliveringaproactiveservicetoregionalandnationalclientslookingtoacquireanddisposeofcommercialpremisesandresidentiallandoneitheraleaseholdorfreeholdbasis.WinningEGi’sMostActiveAgentawardbasedonthenumberoftransactionsconcludedintheSouthWestfor13consecutiveyearsistestamenttooursuccess.WeadviseonmanyofthemosthighprofiledevelopmentsintheSouthWestofEnglandandSouthWalesacrossallcommercial,office,industrial,retail,leisureandresidentialpropertysectors.Wearealsowidelyrecognisedasamarket-leaderintheprovisionofdevelopmentviabilityadvice.

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Usingourexcellentcontactsandin-depthmarketknowledge,weadvisepublicandprivatesectorpropertyownersincludinginstitutions,propertycompanies,charitiesandprivateinvestors.Specialistservicesincludeinvestmentacquisitions,disposals,assetmanagementanddevelopmentmaster-planning,viabilityandfunding.

Alder King provides a comprehensive, market-leading and award-winning package of services to clients throughout the UK.


Lease AdvisoryOurLeaseAdvisoryteamprovidesafullrangeofservicesincludingnegotiatingrentreviewsandleaserenewalsacrossallsectorsofthecommercialpropertymarket.Weregularlypresentcasestoarbitratorsandindependentexpertsandoftenactasexpertwitnessesinleaserenewalproceedings.SeniormembersoftheteamactasarbitratorsandindependentexpertsinrentrevieworPACTdisputes.

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Ourproactivemanagementservicesincludetenantmanagement,rentandservicechargereviewsandaccountingsolutions,a24/7FMhelpdesk,energymanagementandbuildingmaintenance/refurbishmentmanagement.

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January2015.ThefiguresandforecastsinthisreportareintendedasageneralguideandalthoughAlderKinghasmadeeveryefforttoensureaccuracy,itcannotacceptliabilityforanyerrorsinfactoropinion.Allrightsreserved.Thisreportisstrictlycopyrightedandreproductioninanyformisprohibitedunlesspermissionisfirstobtained.Thestatedfiguresshouldnotbeusedforvaluationpurposes.

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