Reading: Office take-up jumps 116%
According to statistics published by Hicks Baker, activity in the Reading office market in the first six months of 2011 was up 116% on the corresponding period last year.
However, there are concerns that continuing economic uncertainty and fragile business confidence is slowing down the rate of deals in the pipeline and this means the market may struggle to match the total take-up achieved in 2010.
Analysing office transactions in excess of 5,000 sq ft in the Greater Reading area, 185,052 sq ft (17,191 sq m) was let in the period from January to June. Thus far in 2011 the market has been heavily skewed towards out-of-town lettings with the two major lettings achieved at 1020 Winnersh to Atos (47,186 sq ft) and at 500 South Oak Way, Green Park to PRA International (43,039 sq ft) accounting for almost half of total take-up.
Apart from Commvault’s acquisition of just over 20,000 sq ft at Apex Plaza (Commvault was represented by Hicks Baker), the only other town centre letting of note so far this year was Capita’s 24,040 sq ft acquisition at New Century Place in April.
Reading’s total take-up in 2010 of 327,329 sq ft was boosted by a flurry of deals late in the year including two lettings at Abbots House and Deloitte’s short-term agreement on 41,000 sq ft at Imperium. It will take another major letting or flurry of activity late in the year if 2010 levels are to be sustained.
Whilst this is not impossible, much will depend upon one of the major enquiries known to be in the market coming to fruition; Reading Borough Council and ING are two obvious candidates and agents locally hope that these longstanding and well-documented requirements will come forward.
Reading Borough Council has shortlisted four town-centre options for its 70,000 to 80,000 sq ft requirement; a decision will be made in principle by the Council’s Civic Board in October and is expected to be ratified by the full Council before the end of the year.
Stephen Head, partner leading the Business Space team at Hicks Baker, commented: "The market is relying on at least one of these ‘trophy deals’ to come to fruition in the next few months, otherwise we will fall short of the 2010 figures. However, we have to consider this in context and remind ourselves that the 2010 market was already a considerable improvement and 150% up on market performance in 2009. Whilst the level of demand and pattern of take-up remains erratic, it is reassuring to note that headline rents remain solid particularly in the town centre where there is a continued dearth of Grade A stock in the pipeline. However, the recent volatility in the market is expected to continue for the foreseeable future."
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