Investment and development trends
Thames Valley Commercial property market
The commercial property market in the Thames Valley and M40 corridor has experienced a largely positive 2014 with the commercial and
residential investments sector being particularly buoyant.
This is a trend we anticipate will continue into 2015. We feel this pattern is aided by two key government initiatives and a shift in supply and demand requirements for the commercial property market;
- Under the three year office to residential permitted development scheme introduced in May 2013, investors are able to purchase the now redundant town centre office stock, convert them into the modern town houses and flats that are highly sought after by the residential market and benefit from the higher rental yields available from these prime instructions.
- With new options for retirement income available to savers following the upcoming pension overhaul that comes into play in 2015, we anticipate an increase in residential property investment as a source of retirement income for later years.
- In terms of supply and demand, business models are changing for the modern workforce. With the ability for workers to work remotely as though in the office, increasing automation and excellent logistics and delivery capability for supply chains, the once large floor plates required by the commercial market are rapidly reducing.
David Pearce, commercial agency surveyor at Kempton Carr Croft comments:
“These days, you could easily run an international business from a 2,500 sq. ft office. Changing technologies enables business to run compact and slick operations whilst having huge market reach. This results in much of the larger office space being built by developers being left unfilled as they no longer meet the majority of incoming tenant’s requirements.”
It’s time developers realised work forces today want high quality accommodation available on short, flexible leases with a much smaller floor plate. They want their working environment to be fully customisable by fit out and complimented by leisure, recreation and parking as standard.
To satisfy these supply and demand differences, investment is needed into larger business park environments that can offer all of the above in a shared environment. The Handy Cross development project and rejuvenation of Globe Park in Marlow will be a step towards meeting this demand for the Thames Valley.