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Confirming the broadening of foreign investment throughout the

country, the Singapore-based Frasers Centrepoint is expected to

purchase Farnborough Business Park for around £170 million with a

yield of 7%.

The 51,467 sq.metres (554,000

sq.ft.

) park is owned by Harbert and XLB

and is on the former defence and aircraft testing site. It was put on the

market through CBRE in June 2017. They paid SEGRO £80 million for it in 2012

when the vacancy rate was 24% (it is now full) and have sold some of the 18

acres of development land that came with it.

The partnership also speculatively developed 9,290 sq.metres (100,000

sq.ft.

) on its own behalf - so a good deal for them. The deal would bring

Frasers’ total spending in the UK to over £900 million, mainly on business

parks such as the five it is buying from Oaktree Capital Management and

Patrizia.

Three of those parks are in the Thames Valley at Chineham Park,

Basingstoke, Winnersh Triangle, Reading and Watchmoor Park, Camberley.

Farnborough Business Park

Broadly speaking, Colliers

International considers that

performance in the Thames

Valley will be moderate as

pricing remains pressured and

rental growth modest.

It adds that “on the upside the

market will become less volatile,

offering attractive, stable returns for

investors”, said Mark Charlton. He

believes the competitiveness of Sterling

will attract new entrants to the

investment market which will top

£50 billion.

As far as the Thames Valley is

concerned, the Colliers International

analysis points to a development

potential that will result in new Grade

A properties. The argument is that the

search for yield will draw investors

towards non core locations and regional

markets but also that industrial property

will be the top performing sector.

Of some significance is that Colliers

International expects UK institutions

to become net purchasers of property

after some years of being sellers, and

that must mean something in their

favourite Thames Valley towns such

as Maidenhead, Reading, Slough and

Bracknell. One interesting point made

by Colliers International that applies

to the Thames Valley is that the

competition between industrial and

residential developers for sites will

lead to the first truly integrated mixed

use scheme between the two this

year. To be fair, that was normal in

the 19th and early 20th centuries.

Walter Boettcher of Colliers

International summarised the Brexit

influence by saying: “While official

Brexit negotiations have floundered,

investment in the UK property

markets has, by and large, continued

to press on with business as usual.

This has been, and will continue to

be, driven by the sheer weight of

capital with global institutions

targeting 10% plus allocation to

real estates, equivalent to around

$5 trillion”.

MORE

stability

Commercial Property Register

February - June 2018

www.compropregister.com

5

A more cautious mood has crept

into the commercial property

market in the region as the

economy slows and problems of

a shortage of stock undermine

some towns.

Even so, most forecasters view

the market as sound with a good

level of demand but also feel that

major changes in the economy will

have an effect on the outcome.

Of specific interest to the high

tech companies in the Thames

Valley are the pressures on business

to invest in new computer and

information systems in the face of

sophisticated cyber attacks. There is

also the challenge for logistics and

distribution companies of the shift

to online buying, though this may

surprise someby reachingasuddenpeak.

Mark Clancy of London Clancy

said of the M3/M27 corridor that:

“2018 will be a challenging year

but also one for optimism given the

surprisingly strong resilience and

outperformance shown during the

past 12 months”. He is not

concerned about the impact of

Brexit on the region but feels it

may help if “if the way forward

becomes more clear”.

Clancy anticipates that the

shortage of industrial/logistics and

office stock will put pressure on

rents, with the upper part of the

region reaching £118.36 a sq.metre

(11 psf) for industrial property and

£258.24 a sq.metre (£24 psf) for

offices in Basingstoke. The shortage

of stock has brought forward some

schemes and Clancy suggests a

good market for these, such as at

the ITT/St Modwen scheme at

Junctions 6 and 7 of the M3 at

Basingstoke, an 11.3 acre site for up

to 20,903 sq.metres (225,000

sq.ft

.)

of B1, B2 and B8 space, subject to

planning.

Expecting continued capital

growth and an investment market

buoyed by low interest rates,

Clancy cites the purchase of

business parks in Farnborough,

Basingstoke and Camberley by the

Fraser Group for £359 million.

“It will be a year of continued

confidence and investment in our

region”, Clancy said. Bracknell is a

good example of a town that had

a good showing in 2017 and

expects to continue on the same

path, particularly as the available

space has declined.

Examining the broader picture

for the UK, Savoy Stewart said:

“Last year was considerably

stronger than many anticipated.

The economy pleasantly surprised

many businesses and forecasters

with unemployment falling to

the lowest level since 1975,

consumer spending robust and

occupier take up healthy”.

It expects a healthy investment

market this year with investors

spending £55 billion.

Managing Director Darren Best

said: “Our research suggests that

now is the best time to purchase

commercial property in the UK,

now that business confidence is

more stable than many expected,

which speaks volumes”.

Cautious,

BUT PERFORMING WELL

J6+7 M3

NEWS

Walter Boettcher

ANOTHER

foreign deal