GLENNY GLENNY DATABOOK DATABOOK SEE THE WOOD. SEE AND THE THE WOOD. TREES. AND THE TREES. WELL PLACED PROPERTY ADVISORS WELL PLACED PROPERTY ADVISORS EAST I I NORTH & HERTFORDSHIRE I SOUTH EAST & KENT EAST I I NORTH & HERTFORDSHIRE I SOUTH EAST & KENT CONTENTS PRINT SAVE NEXT
WELL PLACED FOR UNRIVALLED REGIONAL KNOWLEDGE HERTFORDSHIRE NORTH EAST ARY The vote to leave the EU was expected to trigger a decline in the economy and, in turn, a decline in demand for industrial and offi ce fl oor space. The reality of the situation is that the economy has remained stronger than expected; the industrial and offi ce markets in our region have seen occupational demand strengthen resulting in rents for both prime and secondary property continuing to edge higher. Take up in these markets has undoubtedly suffered but our analysis suggests that this was more a consequence of a shortage of supply, particularly for new and Grade A space, rather than a lack of interest on the part of the occupier. Almost two thirds of the locations in the Glenny region have experienced double digital annualised rental growth over the past three years and this trend seems set to continue. This rental growth story has become very compelling for investors with more than 1.1 billion of industrial assets being purchased in our marketplace over the past two years. The over-riding message, therefore, is that despite some economic uncertainty the commercial property sector across the Glenny region remains open for business. INTRODUCTION Glenny LLP is the leading property consultancy and chartered surveying practice specialising in the region accessed by the North East and South East sections of the M25 motorway which we service through a network of strategically located offi ces in Essex (Basildon), East London (Stratford), North London and Hertfordshire (Enfi eld) and South East London and Kent (Bexley). The statistics in this report relate to Glenny s analysis of the property market as at the 3th tember 2, based on property data obtained through our respective offi ces servicing the area delineated on the map. SOUTH EAST KENT John Bell Head of Business Space Agency and Investment GLOSSARY Market Availability Relates to the amount of built stock on the market at the period end. The availability fi gure does not include pre-let opportunities or new developments where construction is still ongoing. Prime Investment Yield The yield paid for an investment property let to an institutionally acceptable covenant for a lease term of 1- years at the current market rent. Prime Rent The rent achievable for the letting of a newly built property; typically for an industrial unit this would apply to a 2,-2 sq ft building and for an offi ce letting, circa -1, sq ft. Secondary Rent The rent typically achievable on good quality second hand space in a particular location. Prime Capital Values The best freehold capital value achievable on the sale of a circa 1, sq ft industrial unit, or a circa sq ft offi ce building to an owner occupier. 4-5 6-7 8-9 1-11 EAST NORTH & HERTS SOUTH EAST & KENT
INDUSTRIAL SECTOR AT A GLANCE OFFICE SECTOR AT A GLANCE 3,5 INDUSTRIAL MARKET TAKE UP Take up in the industrial market has maintained its overall trend level in the year to date but the total is distorted by the 2.2m sq ft pre let to Amazon at London Distribution Park. In general, take up has reduced, with lack of supply holding back the number of transactions completing, particularly at the larger (>5, sq ft) end of the market. Current demand has remained strong, with a total of.3m sq ft of requirements on the Glenny system. INDUSTRIAL MARKET The lack of grade A industrial fl oor space across the Glenny region has seen prime rental growth slow over the past months, with average growth of 4.3% across all Glenny locations. Occupiers have had to focus their attention on second hand space, causing secondary rents to grow at more than double the rate of the prime market values, up by 9.6% over the comparable period. The strongest growth in secondary rents has been seen in Dartford and our newly featured North London location, Tottenham/Edmonton. INDUSTRIAL INVESTMENT MARKET TRANSACTIONS Investors have continued to favour industrial property in the fi rst three quarters of 2, with 422m of transactions completed in the Eastern M25 market. If the current trend continues into the fi nal quarter of the year, overall investment levels are expected to rival 2, which was a record year for transactions. The most signifi cant transaction in the six months to the end of tember 2 was Legal & General s forward purchase of the 2.2m sq ft Amazon building at London Distribution Park, Tilbury for m, refl ecting a net initial yield of 5.25%. M S. 2.5 5. 7.5 1..5. 17.5 PSF 5 4 3 2 1 N & HERTS E DOCKLANDS S E & KENT 9.25 11.5.. OFFICE MARKET TAKE UP Offi ce take up is expected to record its lowest annual total for three years in 2, with total activity in the fi rst nine months of the year standing at 1.8m sq ft. Most locations in the Glenny region have seen activity fall below their long run trend level of activity, the only exception to this being the North London & Herts market, where take up was boosted by the 8,6 sq ft sub let of EE s former offi ces to Ocado at Hatfi eld Business Park. OFFICE MARKET Prime rents rose in seven of the locations featured in the new Glenny rent survey, resulting in average growth of 5.2% in the year to tember 2. As with the industrial market, a shortage of grade A supply has led to a stronger growth performance in secondary rents, which have risen by 9.% over the comparable period. The strongest growth in secondary rents was seen in Braintree and Enfi eld, where rents were up by 25.7% and 23.3% respectively. OFFICE INVESTMENT MARKET TRANSACTIONS Investment market activity in the offi ce sector slowed signifi cantly in the second and third quarters of 2 after the strong activity recorded in q1. Total transactions for the year to date stand at 973m, with almost three quarters of the total transacted in the fi rst three months of the year. The largest deal in the six months to the end of tember was the 1m purchase of Columbus Courtyard E by the Chinese group HNA Investment Holdings. Chinese developer, Knight Dragon, also purchased the Mitre Building Greenwich for 6m. M S 2,5 1,5 5 N & HERTS E DOCKLANDS E (OTHER) S E & KENT 22. 26. 3. 38. 47.5 1 2 3 4 5 PSF 2,5 1,5 5 INDUSTRIAL PRIME INVESTMENT YIELDS Prime yields remained stable during the summer months, with investors maintaining a strong interest in prime distribution and industrial property. Industrial yields now average 5.19% across the Glenny region, with strong covenant, long income property in East London and North London & Herts expected to attract yields of 4.75%. Locations in Essex and South East London & Kent are expected to trade at slightly higher levels. 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% 211 2 2 2 2 OFFICE PRIME INVESTMENT YIELDS Following a slight outward movement in the fi rst three months of the year, average prime offi ce yields stabilised in the summer months at 6.11% although transaction levels slowed signifi cantly. Investments let to good covenants, with in excess of 1 years remaining on the lease, will still attract strong interest from investors. Overseas investors have been particularly active over the past six months, probably due to the weakness in sterling following the EU exit vote. 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% 211 2 2 2 2 AVERAGE PRIME OFFICE YIELD 1YR GILT YIELD AVERAGE PRIME OFFICE YIELD DOCKLANDS PRIME OFFICE YIELD 1YR GILT YIELD
INDUSTRIAL The announcement of the Amazon pre let of 2.2m sq ft at Roxhill and Forth Ports London Distribution Park Tilbury has dominated Essex industrial market activity in q3 2. The deal is set to be Europe s largest logistics pre let and the fi rst four storey distribution centre in the UK. In addition to the Tilbury pre let, Amazon also took a sq ft unit at Bericote and Blackrock s Tower Thurrock. The three unit scheme, which was speculatively built, has only one unit remaining, the 1, sq ft Unit 3. Supply has continued to tighten, with total availability now under 2.2m sq ft. Grade A supply is dominated by four larger units, two at London Gateway and two at West Thurrock, which account for 97% of total grade A space on the market. Demand remains strong, with total requirements now at the highest level on record for the Essex market at 1.5m sq ft. Larger requirements account for two thirds of the overall total, having risen by 78% from their q1 level. Mid range requirements (25,1-5, sq ft) registered the most signifi cant increase however, with total demand up by 85% to 1.9m sq ft. INDUSTRIAL MARKET AVAILABILITY (as at tember 2) 59% > 5, % 7% 8% 5,1 1, % 1,1 2 % 25,1 5, INDUSTRIAL MARKET REQUIREMENTS (as at tember 2) 66% > 5, 3% 61% 4% 5,1 1, 9% 1,1 2 18% 25,1 5, BASILDON 8. 6.75 BRAINTREE 7.75 5.75 5 CHELMSFORD 8.75 7. THURROCK 9.25 7.75 TOTAL AVAILABILITY 2.2M SQ FT PERCENTAGE OF SQ FT ED INDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET AVAILABILITY INDUSTRIAL MARKET INDUSTRIAL No. 2,5 7, 1 35 1 6, 1, 9, 8, 3 25 8 1,5 5 1 yr average 8% 7, 6, 2 1 5 6 4 2.% x% RENT 7.1% x% CAPVAL 1 8 6 4 2 Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
OFFICES Following on from the record levels of activity recorded in 2, when take up reached 5, sq ft over the year, the fi rst three quarters of 2 has seen activity levels fall below trend levels, with 183,5 sq ft of letting recorded. The most signifi cant transaction over the past nine months was the 3, sq ft pre let to Sky at St James Road, Brentwood. Supply edged up slightly over the past two quarters, rising by 5% to 757, sq ft, largely due to 7 sq ft of grade A space coming to the market at Coval Wells, Chelmsford, of which 1, sq ft has been let. Hyatt Place Chelmsford offers the other major grade A accommodation, with 22,96 sq ft over four fl oors, the top fl oor having already been let. Demand has recovered from the downturn which began in the second half of 2, with current requirements standing at 52, sq ft, the highest level of demand since 27/8. The most signifi cant change in demand has been seen at the larger end of the market, with requirements for buildings of 2 sq ft and above increasing. Prime rents in both Chelmsford ( 26. per sq ft) and Brentwood ( 25. per sq ft) remained stable, although both Basildon and Braintree saw increases, with sentiment driving rents up by 3.6% and 6.7% to 17. per sq ft and. per sq ft respectively. OFFICE MARKET AVAILABILITY (as at tember 2) 21% 25,1 5, 9% > 5, 5% 4% 1,1 2 19% TOTAL AVAILABILITY.8M SQ FT 11% 5,1 1, OFFICE MARKET REQUIREMENTS (as at tember 2) 24% > 5, 33% 251 5, 24% 11% PERCENTAGE OF SQ FT ED 9% 5,1 1, 23% 1,1 2 BASILDON 17.. 2 BRAINTREE. 11. 2 BRENTWOOD 25. 17. 3 CHELMSFORD 26. 19. 325 OFFICE MARKET TAKE-UP OFFICE MARKET AVAILABILITY OFFICE MARKET S OFFICE No. 3 6 6 3 35 25 1,75 5 5 25 3 2 1 5 1 yr average 28% 1,5 1,25 75 5 25 4 3 2 1 4 3 2 1 2 1 5.% RENT.1% CAPVAL 25 2 1 5 Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
EAST INDUSTRIAL Take up continued to be hindered by the lack of supply in the East London industrial market, with activity remaining below trend levels since the fi rst half 2. Activity in the year to the end of tember 2 has totalled 66, sq ft, 37% below the trend level of activity. The largest letting over the fi rst three quarters of the year was the 232,965 sq ft letting to Coca Cola at Logic 233 Hindmans Way, Dagenham. Supply has fallen below 1m sq ft for the fi rst time on record, with only 78,5 sq ft of availability at the end of tember 2. Grade A supply stands at 86, sq ft, with the majority of stock (8%) at Standard Life and Ravenbourne s Thames Gateway Park. A further 1,7 sq ft is under construction at the park, in three units. The overall availability rate now stands at 1.1%. Demand continued to recover from the slowing in the second half of 2, with a new record level of requirements recorded in the six months to tember 2, 9.1m sq ft. The main increase in requirements has been for units of 2 sq ft and above, where demand has risen by 38%. Whilst prime rents have remained stable, the shortage of supply has seen secondary rents increase, with all areas recording an improvement. The most signifi cant rises were seen in Canning Town and Beckton, where values have increased by.% and 9.5% respectively. INDUSTRIAL MARKET AVAILABILITY (as at tember 2) 36% 25,1 5, 47% 9% 35% 1,1 2 TOTAL AVAILABILITY.7M SQ FT 2% 5,1 1, INDUSTRIAL MARKET REQUIREMENTS (as at tember 2) 62% > 5, 3% 29% 4% 5,1 1, 11% 1,1 2 PERCENTAGE OF SQ FT ED 2% 25,1 5, BARKING / DAGENHAM. 9.5 2 BECKTON / ROYALS.5 11.5 21 ROMFORD 1.5 8.5 STRATFORD / CANNING TOWN.. 275 INDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET AVAILABILITY INDUSTRIAL MARKET INDUSTRIAL No. 1,4 6, 1, 3 17.5 3 1,2 9, 8, 25. 25 8 6 4 1 yr average 37% 7, 6, 2 1.5 1. 7.5 5. 2 1 2 5 2.5.% RENT.% CAPVAL 5. Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
EAST OFFICES Take up in both Docklands and the rest of the East London offi ce market has fallen below trend levels of activity in the fi rst three quarters of 2, with Docklands recording activity of 65, sq ft for the nine months and the rest of the East London offi ce market 29, sq ft. Docklands activity has been dominated by the 3, sq ft letting to Thomson Reuters at 5 Canada Square in q1, with the largest deal in the East London market being the 53,5 sq ft letting to technology incubator company ENTIQ at Here East in the Queen Elizabeth Park. The supply of grade A stock in the rest of East London market has been boosted by the release of stock at Here East, Queen Elizabeth Olympic Park, with both the former International Broadcast Centre and the Press Centre coming to the market. These two buildings provide approximately 36, sq ft of offi ce and TMT studio space. OFFICE MARKET AVAILABILITY (as at tember 2) 62% > 5, 23% 7% 7% 5,1 1, % 1,1 2 % 25,1 5, OFFICE MARKET REQUIREMENTS (as at tember 2) 32% > 5, 25% 11% 1% 5,1 1, 25% 1,1 2 BARKING / DAGENHAM..5 175 ROYALS 32.5 21. 65 ROMFORD.5 11. 19 Demand has edged back up to 577,5 sq ft following the satisfaction of the FCA and TfL requirements in mid 2. A number of larger requirements have boosted overall demand, although smaller requirements have weakened, probably as a response to increased uncertainty following the vote to leave the EU. TOTAL AVAILABILITY 1.9M SQ FT 22% 25,1 5, PERCENTAGE OF SQ FT ED STRATFORD 38. 2. 75 OFFICE MARKET TAKE-UP OFFICE MARKET AVAILABILITY OFFICE MARKET OFFICE No. 9 3,5 1,5 6 5 8 8 7 6 5 4 3 2 1 Docklands 1 yr average Other 1 yr average 22% Jan-Mar 2,5 1,5 5 1,25 75 5 25 5 4 3 2 1 4 3 2 1.% RENT.% CAPVAL 7 6 5 4 3 2 1 DOCKLANDS OTHER NO OF REQS (RHS) OTHERS DOCKLANDS (RHS)
NORTH & HERTS INDUSTRIAL Constricted supply has continued to affect the take up numbers, which are expected to fall below trend for the second successive year in 2. Activity in the fi rst nine months of the year reached 95 sq ft. There were a number of signifi cant sized transactions which contributed to a strong third quarter, such as the two pre lets at Enfi eld Distribution Park, with Cooks Delight taking 5, sq ft and DFS a further 44,5 sq ft. INDUSTRIAL MARKET AVAILABILITY (as at tember 2) 7% 8% 5,1 1, INDUSTRIAL MARKET REQUIREMENTS (as at tember 2) 3% 4% 5,1 1, 1% 1,1 2 Supply edged up slightly to 2.2m sq ft. Overall availability is boosted by several larger units that came to the market although more than 54% of larger units are located in Harlow. The availability rate remains close to its recent low point at 3.7%. Demand continued to be strong, surpassing the previous peak level of 9.5m sq ft at the end of 2. Overall demand in the six months to tember 2 was recorded at 1.2m sq ft, with more than 83% of requirements for units of 2 sq ft and above. Requirements for units below 2 sq ft eased slightly. 51% > 5, % % 1,1 2 2% 25,1 5, 65% > 5, % 18% 25,1 5, ENFIELD 11.5 9.5 2 HARLOW 7.75 6.75 HODDESDON 8.5 6.5 5 TOTTENHAM / EDMONTON. 1. 2 Both prime and secondary rents increased in the two inner M25 markets of Enfi eld and Tottenham/Edmonton rising by.% and 9.1% respectively. Outer M25 rents remained stable at their q1 2 levels. TOTAL AVAILABILITY 2.2M SQ FT PERCENTAGE OF SQ FT ED INDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET AVAILABILITY INDUSTRIAL MARKET INDUSTRIAL No. 1,25 6, 1 35 25 1, 3 2 1 yr average 8, 25 1 75 6, 2 8 5 1 6 4 1 25 25% 5 2 2.%.% RENT CAPVAL 5 Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
NORTH & HERTS OFFICES Unlike most other offi ce markets in the Glenny region, North London and Herts saw take up exceed the trend level of activity in the fi rst half of the year, due primarily to Ocado sub letting 8,6 sq ft at Hatfi eld Business Park from mobile phone operator EE. Supply has continued on a downward trajectory, falling below 1m sq ft for the fi rst time since 26. Total availability at the end of tember 2 stood at 89, sq ft, which equates to an availability rate of 3.8%. Demand has continued to improve, rising to 5 sq ft in the six months to the end of tember 2. Several larger requirements have boosted the overall demand for space, although there has been a signifi cant weakening in requirements of buildings of less than 2 sq ft. Prime rents have continued to rise, with offi ce rents in Enfi eld having increased by 33% over the past months from 18.5 per sq ft to 22. per sq ft. Secondary rents in Enfi eld have followed a similar trend, rising by 23% since mid 2. OFFICE MARKET AVAILABILITY (as at tember 2) 21% > 5, 24% 25,1 5, 28% % % 5,1 1, 31% 1,1 2 OFFICE MARKET REQUIREMENTS (as at tember 2) 25% > 5, 4% 25,1 5, 1% 7% 9% 5,1 1, % 1,1 2 ENFIELD 22. 18.5 275 HARLOW. 11. 2 HODDESDON.. 2 WELWYN GARDEN CITY 18.. 25 TOTAL AVAILABILITY.9M SQ FT PERCENTAGE OF SQ FT ED OFFICE MARKET TAKE-UP OFFICE MARKET AVAILABILITY OFFICE MARKET OFFICE No. 35 9 6 22.5 3 3 2,5 8 7 5 2. 17.5 25 25 1 yr average 6 4. 2 2 1,5 5 4 3.5 1. 1 5 6% 5 3 2 1 2 1 7.5 5. 2.5 18.9% RENT 1.% CAPVAL 1 5. Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
SOUTH EAST & KENT INDUSTRIAL Take up has slowed over the fi rst three quarters of 2 as uncertainty about the economic outlook and reduced supply impacted on occupier activity. Transactions totalled 1.1m sq ft for the nine months, signifi cantly below trend levels of activity. The most signifi cant transaction in the six months to the end of tember 2 was the 1,65 sq ft letting to DX Network Services at The Interchange Swanley. A further 18, sq ft was let at Graviton Park Belvedere to Amazon. Supply has tightened further, falling below 3m sq ft for the fi rst time since 26, ending q3 2 at 2.9m sq ft. Grade A space increased slightly, rising to 629,36 sq ft, with more than 6% of stock in larger units. The largest grade A unit on the market is the 18, sq ft former Dixons Carphone Warehouse Erith 18. The availability rate stands at 2.6% at the end of tember 2. Demand continued to recover, with total requirements of 6.6m sq ft in the six months to tember 2, but remains 19% below the recent peak recorded in 2. The key driver to the upturn in demand has been the increase in requirements for units of 2 sq ft and above, where demand is up by 25% from the previous period. INDUSTRIAL MARKET AVAILABILITY (as at tember 2) 31% > 5, % 25,1 5, 21% % 26% 1,1 2 TOTAL AVAILABILITY 2.9M SQ FT 17% 5,1 1, INDUSTRIAL MARKET REQUIREMENTS (as at tember 2) 56% > 5, 3% 5% 5,1 1, 6% 11% 1,1 2 PERCENTAGE OF SQ FT ED 25% 25,1 5, ASHFORD 8.5 5.5 1 CHARLTON/ WOOLWICH 11. 9.5 5 DARTFORD 11. 9.5 5 MAIDSTONE 7.25 6.5 5 INDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET AVAILABILITY INDUSTRIAL MARKET INDUSTRIAL No. 1, 9, 4 175 1,75 1,5 1,25 75 5 25 46% 1 yr average 9, 8, 7, 6, 8, 7, 6, 35 3 25 2 1 5 1 8 6 4 2 4.5% RENT 3.3% CAPVAL 5 1 75 5 25 Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
SOUTH EAST & KENT OFFICES Following on from the strong years activity in 2, when more than 1m sq ft was let, take up has slowed in the fi rst three quarters of 2, with only 35, sq ft transacted. Only four transactions above 1, sq ft have been completed, the largest being the 2,95 sq ft letting to The Compass Company at Catford Road SE6. Availability has fallen to its lowest level in 1 years as permitted development has reduced the supply in a number of locations. Total stock on the market stood at 1.4m sq ft at the end of q3 2. Grade A availability represents only 8% of total supply, with the largest grade A building on the market being Boultbee Brooks Northside House, Bromley, where 24,84 sq ft is available. Demand continued to recover from the downturn in the latter half of 2, recording 45 sq ft in the six months to tember 2. This is the highest level of requirements registered since the recent peak of 74, sq ft in 2/. Prime offi ce rents have moved higher, rising across all locations, with the most signifi cant increase being seen in Bromley, where rents were up by 19.%. Secondary rents also improved, increasing by.7% on average. OFFICE MARKET AVAILABILITY (as at tember 2) 11% 25,1 5, % > 5, 29% 1,1 2 1% 24% TOTAL AVAILABILITY 1.4M SQ FT 2% 5,1 1, OFFICE MARKET REQUIREMENTS (as at tember 2) 5% > 5, 59% 8% 1% 5,1 1, % 25,1 5, PERCENTAGE OF SQ FT ED 17% 1,1 2 BROMLEY 25.. 28 DARTFORD 25.. 265 GREENWICH 3.. 3 MAIDSTONE 2.. 225 OFFICE MARKET TAKE-UP OFFICE MARKET AVAILABILITY OFFICE MARKET OFFICE No. 8 3,5 8 5 35 35 7 6 5 2,5 7 6 5 45 4 35 3 3 25 2 3 25 2 4 3 1 yr average 1,5 4 3 25 2 2 1 35% 5 2 1 1 5 1 5 11.1% 3.4% RENT CAPVAL 1 5 Jan-Mar NO OF REQS (RHS) RENTAL (RHS)
GLENNY DATABOOK AND GLENNY DATABOOK PRIME YIELDS KEY: CHANGES IN THE PAST 6 MONTHS NO CHANGE INCREASE DECREASE HERTFORDSHIRE 3 4 5 2 1 PRIME OFFICE YIELDS 9.% 8.% 7.% 6.% 5.% 4.% 6.% 6 7 8 9 1 11 YEAR PRIME INDUSTRIAL YIELDS 9.% 8.% 7.% 6.% 5.% 4.% 4.75% 6 7 8 9 1 11 YEAR KEY DEAL Amazon Fulfi lment Centre London Distribution Park Tilbury Legal & General Property purchased the 2.2m sq ft distribution unit for m in August 2 from Roxhill Developments and Forth Ports, the purchase price representing a net initial yield of 5.25%. Amazon signed an agreement to lease earlier in the month, with the new building the fi rst four storey distribution centre in the UK. PRIME OFFICE YIELDS 9.% 8.% 7.% 6.% 5.% 4.% 6.45% 6 7 8 9 1 11 YEAR A lack of supply of grade A space in both the industrial and offi ce sectors has held back the growth in prime rents over the past months. Prime offi ce rents grew by 5.2% in the year to the end of q3 2, compared to.2% a year earlier. Industrial prime rental growth eased back to 4.6% from 1.8% one year earlier. The shortages in supply, however, have seen secondary rents gather momentum, with offi ce secondary rents up by 9.% and industrial rents up by 9.6%. Whilst a number of locations saw prime rents remain stable, secondary rents increased in 88% of the industrial locations in the Glenny rent survey, whilst secondary offi ce rents increased in 69% of locations. NORTH 2 1 3 EAST 1 2 1 2 5 4 SOUTH EAST 3 INDUSTRIAL RENT 4 3 4 5 KENT 6 OFFICE RENT NORTH & HERTS KEY DEAL Elizabeth French House Langston Road Loughton - Salaft Properties agreed a sale & leaseback of Kier Construction s offi ces in Loughton. Salaft paid 6.5m for the 17,5 sq ft offi ces, with the purchase price representing a net initial yield of 5.44% off a rent of 22. per sq ft. EAST KEY DEAL 17 Columbus Courtyard, E Chinese conglomerate HNA Group purchased the 195,5 sq ft Columbus Courtyard building for 1m from Vico Capital. The building is leased to Credit Suisse until 224, with the tenant having the option to extend for a further years at the end of the term. The purchase price refl ected a net initial yield of 4.59%. HERTFORDSHIRE NORTH EAST SOUTH EAST PRIME INDUSTRIAL YIELDS 9.% 8.% 7.% 6.% 5.% 4.% 5.75% 6 7 8 9 1 11 YEAR 1 CANNING TOWN. 275 2 BECKTON.5 21 3 BARKING / DAGENHAM / RAINHAM. 2 1 STRATFORD 38. 75 2 ROYALS 32.5 65 3 BARKING / DAGENHAM / RAINHAM. 175 PRIME OFFICE YIELDS 9.5% 8.5% DOCKLANDS 4.75% OTHER 5.5% KENT 4 ROMFORD 1.5 4 ROMFORD.5 19 7.5% 1 TOTTENHAM / EDMONTON. 2 2 ENFIELD 22. 275 6.5% 2 ENFIELD 11.5 2 3 WELWYN GARDEN CITY 18. 25 5.5% 4 HODDESDON / CHESHUNT 8.5 5 4 HODDESDON / CHESHUNT. 2 4.5% 5 HARLOW 7.75 1 BRAINTREE 7.75 5 2 CHELMSFORD 8.75 5 HARLOW. 2 1 BRAINTREE. 2 2 CHELMSFORD 26. 325 3.5% 6 7 8 9 1 11 EAST OTHER DOCKLANDS EAST PRIME INDUSTRIAL YIELDS 9.% PRIME OFFICE YIELDS 9.% SE AND KENT PRIME INDUSTRIAL YIELDS 9.% SOUTH EAST & KENT KEY DEAL 4 BASILDON 8. 5 THURROCK 9.25 2 CHARLTON / WOOLWICH 11. 5 4 DARTFORD 11. 5 5 MAIDSTONE 7.25 5 6 ASHFORD 8.5 1 3 BRENTWOOD 25. 3 4 BASILDON 17. 2 1 GREENWICH 3. 3 3 BROMLEY 25. 28 4 DARTFORD 25. 265 5 MAIDSTONE 2. 225 8.% 7.% 6.% 5.% 4.% 4.75% 6 7 8 9 1 11 YEAR 8.% 7.% 6.% 5.% 4.% 6.5% 6 7 8 9 1 11 YEAR 8.% 7.% 6.% 5.% 4.% 5.5% 6 7 8 9 1 11 YEAR Graviton Park Belvedere CBRE Global Investors purchased the recently completed three unit development from Wrenbridge Land and Palmer Capital Partners for.1m. The development was purchased vacant, with a letting of the entire 18, sq ft buildings achieved shortly after purchase.
ARCHITECTURE ASSET & PROPERTY MANAGEMENT BUILDING CONSULTANCY BUSINESS SPACE AGENCY DEVELOPMENT INVESTMENT LEASE ADVISORY REGENERATION & INFRASTRUCTURE SPECIALIST ADVICE AT EVERY STAGE OF THE PROPERTY LIFE CYCLE EAST Peter Higgins 2 8591 6671 p.higgins@glenny.co.uk Fifth Floor, Unex Tower, Station Street Stratford, London E 1DA NORTH & HERTS Ivan Scott 2 8367 2334 i.scott@glenny.co.uk 1 Crossfield Chambers, Gladbeck Way, Enfield, Middlesex EN2 7HR DEVELOPMENT & INVESTMENT John Bell and James McFeely 2 8591 6671 j.bell@glenny.co.uk / j.mcfeely@glenny.co.uk Fifth Floor, Unex Tower, Station Street Stratford, London E 1DA Jim O Connell 68 54 771 j.oconnell@glenny.co.uk 3 Argent Court, Sylvan Way, Basildon, Essex SS 6TH SOUTH EAST & KENT Richard Seton-Clements 2 834 4911 r.clements@glenny.co.uk 21 Bourne Road, Bexley, Kent DA5 1LW RESEARCH For more information email research@glenny.co.uk RESEARCH RESIDENTIAL DEVELOPMENT GREATER INDUSTRIAL Glenny REGIONAL RUNNER UP SOUTH EAST OF ENGLAND (EXCL. ) INDUSTRIAL Glenny RESIDENTIAL MANAGING AGENTS STRATEGIC PLANNING VALUATION SERVICES This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, offi ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof. All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, further copying or otherwise, or stored in any information storage or retrieving system of any nature, without prior written permission of the copyright holder except in accordance with the provisions of the Copyright Design and Patent Act 1988. Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution. November 2.
GLENNY NEWS 21 st November 2 GLENNY NEWS 21 st November 2 REACHES RECORD LEVELS AFTER BREXIT VOTE Demand for industrial floorspace reached record levels in the months following the BREXIT vote, according to our latest research. John Bell, Head of Business Space and Investment Agency at Glenny, said; Our expectations were that demand would slow following the vote to leave the EU but in reality quite the opposite happened. As agents, the biggest issue we face at the moment is how to satisfy this pent up demand as stock levels continue to dwindle. This, in part, is due to a resistance within the institutional sector to fund speculative development; the obvious conundrum being what a hard Brexit might actually mean to the commercial property sector; right now it s all still conjecture, uncertainty and sentiment. To put things into context, our research demonstrates that over the past six months demand for industrial floor space has risen to.3m sq ft with requirements for buildings of 2 sq ft upwards accounting for 8% of this total. Bell adds; The resurgence in demand has been driven by occupiers looking for units in the mid and big box size brackets, particularly amongst the e-tail and home delivery sectors within the M25. At the smaller end of the market, demand has remained steady but has not bounced back to the same extent. This is not unusual as many smaller requirements don t make it on to agents registers., sq ft 1 1 1, 8, > 2 sq ft < 2 sq ft It s not just about size though - we also need to look at tenure. Most new product being delivered to the market of late has been leasehold due to the maturity of this asset class and the desire of institutional investors to hold this stock; freeholds remain in very scarce supply across all size ranges and grades, despite the premium values an occupier would be willing to pay as a consequence of the current low interest rate environment. On the other side of the equation supply has continued to reduce and the overall availability level now stands at 8m sq ft across the Glenny region with about 26% of this in Garde A space - 2.1m sq ft. The mismatch between supply and demand has driven up rental values in most of our research locations, with some hot-spots seeing prime rents grow by as much as 5% over the past three years. Bell comments: The rental growth story in many of our locations has become very compelling. Prime rents in many of our research towns have risen above 1. per sq ft but the shortage of grade A stock in most markets has had an even larger impact on better quality second hand stock. An example of this is in Canning Town, where prime rents have risen by 52% (or % per annum) over the past three years whilst secondary rents are up by 2% per annum. This is not an isolated incidence, with almost two thirds of the locations in the Glenny regions survey experiencing annualised growth in double digits over the past three years. Bell states; This is a very strong story for investors and some have already committed to the area, with more than 1.1bn of industrial assets being purchased in the Glenny region over the past two years. The most recent examples of this trend have been Legal and General s purchase of Amazon s new 2.2m sq ft fulfilment centre at London Distribution Park in Tilbury and CBRE Global Investors purchase of Wrenbridge and Palmer Capital s Graviton Park in Belvedere. The rental growth story looks set to continue for the foreseeable future and any new schemes are likely to be met with strong demand from both occupiers and investors. Glenny LLP 21st November 2 6, 28 29 21 211 2 2 2 2 2 For more information contact John Bell Head of Business Space & Investment Agency 2 31 35 j.bell@glenny.co.uk Established in 1892 Glenny LLP offers services across the whole property lifecycle, operating from five strategic offices servicing clients regionally and nationally. Glenny s Business Space Agency team offers unrivalled regional knowledge of the east London, Essex, North London and Herts and South East London and Kent commercial property markets. www.glenny.co.uk