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A resounding vote of confidence in the viability of the business

parks in the Thames Valley has come with the Singapore listed

Frasers Centrepoint lining up to buy a portfolio from Oaktree

Capital Management and Patrizia.

The jewel in the crown is the 85 acre Winnersh Triangle, which had

originally been lined up for a sale to a new company, Capreon.

The portfolio, which is worth around £900 million, also includes

Watchmoor Park, Camberley; Chineham Park, Basingstoke; Birchwood Park,

Warrington and Hillington Park, Glasgow.

The market view is that the buyer will break up the portfolio and sell

the parks separately.

Winnersh

One of the dominating sectors

in the Thames Valley is

pharmaceuticals, which

accounted for 30% of the take

up in 2016.

Indeed, Savills report that the

region has the highest concentration

of life science employees and companies

in the UK. In the first quarter

pharmaceuticals accounted for 9%

of the take up in the south east.

UK companies only accounted for

28% of transactions, while the US

groups took 63,689 sq.metres

(685,563

sq.ft

.) last year, or 41%

of the total.

Simon Preece of Savills commented:

“The pharmaceutical industry received

£519.7 million in investment last

year, following the £1.48 billion of

2015”.There is a problem, however,

with the impact of Brexit. According

to a report by Brick Vest, 60% of

institutional investors quote Brexit

uncertainty as their biggest

challenge in relation to investment

in European real estate.

Looking ahead, Savills predicts

that there will be a greater emphasis

on pharmaceutical clusters as co-

operation between companies and

big data analytic providers become

crucial to improving efficiency. Savills

cites the Thames Valley Science Park

as one place where this is

happening.

THAMES VALLEY

tonic

Commercial Property Register

October 2017 - February 2018

www.compropregister.com

5

Resilience is the key description

for the region’s market as it

weathers the uncertainties of

Brexit and the impact on the

property market.

That is the view of Lambert

Smith Hampton (LSH) in assessing

the current situation after a year

in which take up was below par

with a decline of 19% to

157,930 sq.metres (1.7 million

sq.ft

.)

in 2016 compared with the

previous year.

Nick Coote of LSH said: “Within

the context of the Thames Valley

office market, this has remained

remarkably resilient in both the

occupier and investment markets.

However, there are some fundamental

changes in occupier demand”.

What shines out from the report

is that Oxford, Reading and Staines

have outperformed their longterm

averages. Bracknell has had a

strong first quarter while Oxford has

continued its strong showing.

The significant change taking

place is the shift to small space

requirements in the range of up to

929 sq.metres (10,000

sq.ft

.). This

is because of companies cutting

costs through shared space and the

increase in the number of SMEs.

At the same time, supply has

continued its six years’ decline to

a current 817,520 sq.metres

(8.8 million

sq.ft

.), or 4.5 years’

supply. These figures hide another

important change; the near

disappearance of Grade C space

and the decline in Grade B,

mainly because of conversion to

residential use.

In contrast, Grade A space has

increased and is providing the type

of buildings the tech industry

wants, also bringing higher rents,

a feature in most towns.

LSH expects a quiet market

ahead because of political and

economic pressures but notes

the rising demand from small

companies and the impact of

Crossrail (Elizabeth Line). For

example, the new line will more

than double the working population

to 6 million within a one hour

public transport travelling time

of Reading.

While Cambridge is usually

called Silicon Glen, the Thames

Valley has a claim to be the Silicon

Valley of the UK because of the

number of large tech companies

(such as Cisco, Microsoft and Oracle)

who reside there, apart from the

high percentage of people working

in the industry.

For example, a report from Tech

Nation said the tech industry in

Reading had grown by 57% in the

period 2011-2015 while in Oxford

the growth was 43%. Reading is

second only to London in the digital

economy at £12.5 billion employing

45,269 people.

A

resilient

SHOW

NEWS

Simon Preece

Thames Valley Science Park

Winning

WINNERSH

IN BRIEF

Serviced

office providers are expanding in the Thames Valley, particularly

Regus, who have now opened another business centre in the Gatehouse

building in Aylesbury, following their recent expansion at Heathrow’s

Terminal 2. Regus said that the Aylesbury building is “at the heart of the

thriving Thames Valley”.