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Business parks take optimistic turn says GVA

wantspacegotspace.co.uk - Business parks take optimistic turn says GVAResearch by GVA, the UK’s largest independent commercial property consultant, shows how business parks in the South West are contributing to a positive turning point for the UK’s business parks market.

The news comes as the UK economy also shows a marked improvement as growth accelerates. Despite a delicate recovery, the outlook is the best it’s been in six years. The same can be said for the business parks market.

GVA’s bi-annual Business Parks report states for the first time since the downturn, there has been a significant fall in availability across the country and an increase in construction activity, marking a positive shift over the past six months.

UK business park office take-up during the first half of 2013 totalled 2.1m sq ft, 12% above the five-year six-monthly average of 1.9m sq ft. Aztec West in Bristol saw the South West’s largest deals, in Q1 Nvidia took BAM’s 30,000 sq ft building 930 on a ten year lease, and Barratt Homes took 13,000 sq ft at building 710.  Total take up in the South West region was 150,229 sq ft.

Ben O’Connor, Associate at GVA’s Bristol office, says “Despite the South West’s take up still being below the five year, six monthly average, what’s most encouraging is that the business of building is back on the agenda and with market sentiment at a six year high this will only improve, certainly in the short term.”

The amount of office space under construction in UK business parks remains at a low level, however on a positive note, the report has recorded the first upturn in activity within the last five years. Space under construction currently stands at 1.1 million sq ft compared to a survey low of 470,000 sq ft six months ago.

Construction has begun at the Bristol and Bath Science Park with 80,000 sq ft doubling the size of the National Composite Centre. Supported by Government funding of £28 million, it will allow the NCC to extend its capabilities to develop composite technology for the aerospace, automotive, renewable energy and rail sectors.

Business parks have recorded the first significant fall in availability since the downturn in 2008. Overall activity at the end of June stood at 17.6 million sq ft, a 5% fall from its peak of 18.5 million sq ft at the end of 2012.  Availability in the South West stands at 1,038,097 sq ft.

Ben O’Connor  continues: “Although stock levels are still relatively high, the most buoyant areas have a limited supply of good quality availability and with only a handful of units over 10,000 sq ft. Larger occupiers looking for good quality buildings will have to start considering pre-lets.

“Typically demand has been for occupiers below 5,000 sq ft where flexibility has been the key driver. In addition there has been limited freehold take-up reflecting continued occupier caution and limited access to finance.

“Business parks need to focus on the drivers of occupier demand and what will give them a USP over their competitors – that is to say flexibility and availability of additional onsite services including café/restaurant or even crèche offers.”

Posted by The Editor (wantspacegotspace) on 23rd September 2013

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