In the face of economic uncertainty, 2023 was a landmark year for the commercial property sector in the Surrey and Hampshire markets, with a series of significant transactions underscoring the resilience and attractiveness to investors in both the office and industrial sectors in the local area.
In Church Crookham, the Quantum Business Park also made waves with several lettings to companies including Secure Transportation and Gulfstream Aerospace. Curchod & Co, one of the agents for the scheme, reports that lettings have been agreed for the two remaining units on the new development, with both transactions in solicitors’ hands.
Elsewhere, in Bordon, the letting to Celab of a 10,300 sq ft warehouse highlighted the popularity of the town and the strength of demand for good quality properties. Similarly, Alton experienced high levels of activity in 2023, with significant lettings to Rediweld and the National Trust. There was also a notable 30 per cent rent increase on a 27,400 sq ft property in the town and the Southern Central Ambulance Service NHS Foundation Trust extended its lease at the town’s Riverwey Industrial Estate.
The autumn witnessed the investments of two industrial estates coming to the market: the Grove Bell Estate in Wrecclesham and the Grove Park Industrial Estate in Alton, encompassing 19 units and over 71,000 sq ft of space. I am told that a deal has exchanged for the industrial portfolio, with the multi-million-pound transaction expected to be completed in January, underlining confidence from investors for the local markets.
More recently, Curchod & Co have negotiated a rent review on 14,275 sq ft of industrial and showroom accommodation in Farnham, which saw a significant uplift in the rent. Nick Reeve of Curchod & Co believes that the rent review signposts the direction of the local industrial markets in 2024 as they react to the imbalance of supply and demand.
“We are constantly being contacted by local, regional and national companies looking for industrial space. The majority of these enquiries are for high-specification properties, or those that can be upgraded and brought up to modern standards. There remains a lack of supply and the demand is such that we expect to see further upward pressure on rents over the next 12 months,” he told me.
The local office market faced its own set of challenges but demonstrated a remarkable capacity for growth. The sale of the Millennium Centre in Farnham to investor JDI Property Holdings marked a significant milestone in the first half of the year. Similarly, the acquisition of Lion Court in Bordon by Fishron Securities, and the subsequent leasing to Richers & Vision, indicated a healthy appetite for substantial office spaces.
This demand was underlined by Phyllis Tuckwell’s leasing of a 20,112 sq ft office property in Farnham and a lease extension to Shaw Gibbs at Wey Court in the town.
Looking forward, Curchod & Co predicts some upward pressure on office rents in 2024. Following the worst of the pandemic, a trend has emerged among occupiers that has seen businesses downsizing, but upgrading to superior office spaces, often at considerably higher rents, to attract and retain staff. Regionally, this ‘flight to quality’ trend saw high levels of activity in the Woking and Guildford office markets, during 2023. Curchod & Co predicts that demand for high-quality developments in Woking and Guildford is expected to drive prime rents into the £50.00 per sq ft range, reflecting the trends already seen in the Thames Valley M4 corridor.
“Locally, particularly in Farnham, the office market is closely linked with what goes on in Guildford. Both markets have emerged as thriving centres of the online and computer gaming sector, and with rents being pushed higher there, we can expect a ripple effect coming over the Hogs Back, as businesses look for cost-effective space in 2024,” said Nick Reeve.
By Richard Dunmore