Want Space Got Space - Offices, retail and industrial space Want Space Got Space - News about how to find and advertise commercial property to let, rent or sell in England, Wales and Scotland including Offices, Warehouse, Commercial, Manufacturing, Shops and Retail.



Richard Bourne, Development Director at RO Group gives his views on the South East property market.

wantspacegotspace.co.uk - Richard Bourne, development director at RO Group gives his views on the South East property market.The gap between prime and secondary yields has widened significantly over the past few years across all sectors and the value of secondary and tertiary stock has shown few signs of improvement in recent months. However, various sentiment surveys completed over the last 12 months indicate relatively positive signs for the duration of 2013, and well located secondary property now appears to offer good value.

We believe the supply/demand imbalance in many South East towns offers a real opportunity for those prepared to speculatively develop or refurbish well located property. In addition the 18 months rates relief on empty new developments completed between 1st October 2013 and 30th September 2016 will take some of the sting out of the speculative tail. It is a calculated risk that could offer significant reward.

Because the South East region has the strongest employment prospects in the UK, it is the geographic area most likely to see a recovery. Although occupational demand remains sporadic and take up is patchy, the South East office market in particular appears to be improving. There is a shrinking supply of well-located Grade A and B+ space and a strengthening demand, which is placing upward pressure on rents and reducing void periods.  

The RO Group is seeing evidence of this increase in occupational demand in its own portfolio. In February we completed deals totalling 14,612 sq ft and achieved rental growth of 15% at Napier Court, our 46,800 sq ft office campus opposite Reading station. In the last 3 months we have also secured 7% rental growth and 100% occupancy at Hemel One, our 90,000 sq ft office building in Hemel Hempstead. In addition, Phoenix House, our 20,000 sq ft office and retail building in central Brighton is now fully let following rental growth of 50%. All of these buildings have been refurbished to provide high quality Grade A space and exploit a gap in the market. They have also delivered a return on capital in excess of 15%.

What is clear is that there is demand for high quality, well located property in the South East. The RO Group is now looking to reinvest some of its cash to exploit this market, following a positive portfolio performance. Our objective, perhaps working with likeminded joint venture partners, is to acquire well located investment property and refurbishment/development opportunities with capital growth potential and a lot size of £2m - £5m.

We have proven that this is achievable, and improving market dynamics should ensure that this continues to be the case.

Posted by The Editor (wantspacegotspace) on 4th March 2013 (updated 05/03/2013)

Back to news list

 Surrey  Leeds  Leicester  Derby  Nottingham  Birmingham  Manchester  London  Essex  Milton Keynes  Northampton 
 Kettering  Cardiff  Basingstoke  Dorset  Shrewsbury  Bristol  Southampton  Reading  Bolton  Coventry  Swansea  High Wycombe 
 Corby  Rugby  Worcester  Chelmsford  Lincoln  Bedford  West Sussex  Doncaster  Wolverhampton  Telford  Croydon  Slough 
 Cornwall  Solihull  Sittingbourne  Fareham  Watford  Portsmouth  Ashford  Greater Manchester  Luton  West Malling  Kings Hill  Middlesex