Business parks show recovery

Oct 3 2007 by Tony McDonough, Liverpool Daily Post

THE bi-annual Business Parks Review: Autumn 2007, from GVA Grimley, indicates UK business parks are showing signs of recovery and boosting developer confidence in speculative schemes.

During the first half of 2007, take-up increased by 17% to more than 2.9m sq ft, well above the six-monthly average of 2.1m sq ft. Take- up in the North West was very strong, at 250,000 sq ft, which is up from 92,000 sq ft six months earlier.

The significant amount of space under construction reported in the last two bulletins has continued nationally in the first half of 2007 with more than 3.6m sq ft of space under construction – two-thirds is being developed speculatively.

This is considerably higher than the six-monthly five-year average of 2.9m sq ft, with the North West seeing the greatest increase over the past six months.

Across most regions, demand has been healthy over the past six months. Demand for small to medium-sized self-contained office buildings continues to be strong in the North West, evidenced by recent lettings and sales at established parks such as Daresbury Park, Cheadle Royal and Lingley Mere.

Simon Reynolds, partner at GVA Grimley in the North West, said: “The future is looking positive for the North West, take-up is at its highest since GVA Grimley started to monitor the market in 1995, a very encouraging statistic in a period of continued anticipated demand in growth.

“The increased absorption of vacant stock and relative lack of new build has lead to real rental growth for the first time in some years.

“The expectation that business park rental growth may outstrip city centres in the short term has led to a number of schemes changing hands as prospects for rental growth help bolster historically diminished returns.”

tonymcdonough