Swindon’s property market delivered an improved performance across all sectors in 2022 as business occupiers continued to adapt their occupational requirements to support growth and meet their ESG responsibilities.
Alder King’s latest Market Monitor report demonstrates the resilience of the town’s property market, with some stand-out transactions despite an ongoing shortage of stock in the industrial/logistics sector.
James Gregory, partner at Alder King’s Swindon office, said, “Swindon remains a strong business location and this is borne out by the statistics in our latest Market Monitor report.
“Industrial take-up in 2022 reached 1.3 million sq ft – in line with the five-year average of 1.28 million sq ft – as a result of some significant transactions. These included the 205,182 sq ft letting of the majority of the former TS Tech complex at Blackworth Industrial Estate to Neptune, the 224,465 sq ft letting of 224 Keypoint to Panther Logistics, the 98,643 sq ft disposal of 103 Cheney Manor and the 53,708 sq ft letting of 110 Faraday Park, Dorcan to OPX Logistics.
“Rents have risen across all size ranges as a result of limited supply and continued demand for units. Freehold prices have also risen sharply as, in many cases, disposals lead to best bid scenarios.
“As take-up has improved, supply has fallen to 1.25 million sq ft by the end of last year. Any new stock is hampered by the lack of opportunity and very high build costs.”
The town’s office market saw a marked improvement in take-up in 2022, reaching 93,000 sq ft but this remains 24% below the five-year average of 122,000 sq ft.
The largest transaction was at Stirling House, South Marston where Outsource took 21,678 sq ft. Other significant lettings included Cartus taking 11,029 sq ft at Arclite House, Monahans acquiring 7,296 sq ft at Churchward and Develop Training leasing 5,500 sq ft at Edison Park.
Office rents generally remained stable, although there were instances last year where occupiers were willing to pay for better quality accommodation to provide an improved working environment for their staff.
Supply has increased as some occupiers used their lease expiry or break clause to off-load surplus space. Landlords are in turn using this as an opportunity to upgrade the space, thus improving the overall stock on offer. For the first time in many years, Swindon has some brand new Grade A space to offer at 2 Unity Place.
ESG takes centre stage
James added, “ESG has now become the most significant decision-making factor for many office occupiers, and will become increasingly important for the industrial sector.
“Prior to Covid, only enlightened real estate developers and investors were pushing the sustainability message. Now it’s the dominant topic for the whole real estate industry as it prioritises short and longer-term sustainability goals.
“Many landlords and developers are already responding to this challenge, adapting the design of new and refurbished buildings to meet occupier requirements, but older stock that is uneconomic to refurbish will be repurposed for alternative uses.”
Looking ahead, James added, “2023 may get off to an unsettled start but should recover by the mid-year point. There will be a resetting of prices in the investment market, leading to renewed activity in the second half of the year.
“There are already encouraging economic indicators coming through to bolster business confidence. Our view is that the office and industrial occupational markets will remain buoyant, fuelled by a lack of supply in many locations and more limited development, especially in the office sector.”
For more detailed analysis of the region’s commercial property market, including supply, take-up and rental data across 10 key centres, read Market Monitor 2023 at www.alderking.com