Swindon’s commercial property market defied ongoing uncertainty last year to deliver another strong performance across the business space arena, according to a new report from commercial property agents Alder King.
The firm's latest market report said occupier demand for industrial and office space, and developer demand for land remained robust, with many businesses looking beyond short term challenges and pressing ahead with their plans for growth.
Take-up of industrial space in the town totalled 1.04 million sq ft, the highest take-up figure since 2015 and eight percent above the five-year average.
Significant transactions included the 80,000 sq ft and 22,500 sq ft lettings to DHL and Consumables respectively at Ignition at Dorcan, both of which set new record rents of £7.75 per sq ft, and there is strong interest in the speculative 620,000 sq ft proposed unit at Symmetry Park which if let will take out the largest unit currently available in the town.
Swindon is one of the most active markets in the region, with an impressive programme of speculative development including Ignition at Dorcan, Trinity Park at Hillmead and Kembrey Place.
Stock levels have increased for the first time in three years and now stand at 1.3 million sq ft, the highest figure for the town since 2011.
The announcement by Honda that it is to close its Swindon plant will inevitably result in an increase in second-hand stock.
Take-up in the town’s office market also performed well, ending higher than the previous three years, largely as a result of Nationwide’s acquisition of the 76,000 sq ft Trilogy building at Kembrey Park.
Other notable transactions included Thames Water taking 15,000 sq ft of additional space at Kembrey Park and BCS taking 18,000 sq ft at 3 Newbridge Square, the largest town centre transaction of existing stock for many years.
The majority of office transactions were for smaller space around 1-3,000 sq ft, with occupiers looking for better quality space to help with staff recruitment and retention.
Office stock levels fell by 14% last year to 582,000 sq ft, with several office buildings being converted to residential use under PDR including Lenta House, Paxton House and 2 Temple Chambers.
A lack of opportunity dampened activity in the region’s investment market but there were some notable transactions and it continues to be a very attractive market in which, given the opportunity, investors will look to invest. Swindon recorded £88 million of transactions, up 48 percent on the previous year.
Notable transactions included the acquisitions of 12 Murdock Road for £4.35 million by a private investor, and the Keyline Builders Merchants unit acquired by Duncan Investments for £3.1 million.
The retail market generally continues to suffer. Structural changes in the sector and a difficult trading environment have taken their toll as tenants continue to default or rationalise their estates.
However, there are positive signs including the recently signed redevelopment of the Aspen House site to accommodate a £17 million Premier Inn and Hilton are on site on the former Paragon Laundry site.
James Gregory, partner at Alder King in Swindon, says market sentiment is high: “The decisive outcome of last year’s general election has given much-needed clarity and confidence to the market and the outlook for the coming year is positive.
“However, occupiers and investors will find the market highly competitive and will have to plan much further ahead to satisfy their requirements, particularly when considering lease end and break options.”
“While the announcement that Honda planned to close its Swindon operation was of course extremely disappointing, it does provide the town with large scale future opportunities and, importantly, time to plan ahead. Swindon continues to punch above its weight, remaining a popular destination for occupiers, investors and developers.”
The full report can be read at https://www.alderking.com/wp-content/uploads/2020/01/Alder-King-Market-Monitor-2020.pdf