Uxbridge is staging an impressive demonstration of its resilience as a commercial centre, writes John MacRae.
Uxbridge lost three major international office occupiers during the recession – BP Energy, Hewlett-Packard and Grand Metropolitan.
This had nothing to do with the town and everything to do with corporate restructuring, says Simon Williams of Thomas Williams. The town’s transport links and location have always underpinned its attraction for office occupiers and, sooner or later, the loss of three major companies was going to be balanced by an influx of new ones.
But whether the newcomers will be supernovae or mere stars remains to be seen. Certainly, Lincoln National’s acquisition last year of The Quays, Burton Property Trust’s 88,000 sq ft (8,175m2) scheme, was a major event. Grand Met has let virtually all of the 90,000 sq ft (8,361m2) it vacated in five buildings in Uxbridge, and now space is going fast in Harman House, the former Hewlett-Packard building.
Three months ago there was 70,000 sq ft (6,503m2) still available. But joint letting agents Weatherall Green & Smith and Thomas Williams report that Octel has taken the eighth floor and three other companies are close to signing leases at about £17.50 per sq ft (£188.38 per m2), leaving only the second floor of 14,000 sq ft (1,300m2) available.
Apart from this, Uxbridge 1, where BP Energy is responsible for a rent of £31.50 per sq ft (£339.07 per m2), is still on the market. This highly specified HQ building has been the subject of rumours about possible occupiers. Joint agents DTZ Debenham Thorpe and PSK Knighton are waiting for a single occupier.
Grosvenor Square Properties’ development at Denham Lock, Harefield, now called Widewater Place, has attracted several big names, including Renault and Tupperware. Only one suite of 9,000 sq ft (836m2) is available through Jones Lang Wootton and Leighton Goldhill.
At Coppermill Lock, Harefield, T B F Properties has completed the speculative first phase of Royal Quay – its 84,000 sq ft (7,803m2) office and business space development.
Two of the three buildings in phase one are Grade II listed. Joint agents Colliers Erdman Lewis and Margaret Williams & Partners, of Maidenhead, are quoting £14 per sq ft for the business units and £18 per sq ft for the offices in the refurbished Manor House.
Office rents have risen in the past 12 months. At Charter Place, Savills has obtained rents of £12.50 per sq ft and £14 per sq ft (£134.55 and £150.70 per m2) on behalf of Sun Alliance. This was the first solid evidence of increasing rents, says Williams. Jansons points to Grand Union Office Park, where average rents have increased to £12.50 per sq ft (£134.55 per m2).
Uxbridge has one of only three speculative office schemes in the western quadrant of the M25 market – the other two are Aurora in Ealing, and Heritage Court in Staines.
In Uxbridge, Kyle Stewart Properties is building the 26,000 sq ft (2,415m2) Salmon House on Cowley Business Park (see Key Transactions). Two further buildings are likely to go ahead on a design-and-build basis, one of 48,000 sq ft (4,459m2) and the other of 18,000 sq ft (1,672m2). The quoting rent through joint agents Colliers Erdman Lewis, De Souza Duncan Cons and Thomas Williams will be about £20 per sq ft (£215.29 per m2).
After the success of Harman House, the remaining good-quality space boils down to York House, of 24,600 sq ft (2,285m2), and Senator Court, of 25,519 sq ft (2,370m2).
The latter building, in Belmont Road, is Allied Irish Bank’s high-specification former space. Joint agents Conrad Ritblat and Thomas Williams are offering an assignment or a new sublease at £18 per sq ft (£193.76 per m2).
Waiting in the wings are two office sites: the Mahjacks Roundabout site, owned by Grosvenor Square Properties, and another belonging to Scottish Amicable.
There is still no start date for Sun Alliance’s St George’s 400,000 sq ft (37,160m2) shopping centre, which received planning consent in 1991. But a SA spokesman says that a revised planning application for a “simpler, but similar-sized” scheme will be submitted by the end of the year.
Industrial sector: the fate of the many in the hands of the few
The industrial and warehouse sector tends to be overlooked in surveys of the Uxbridge market because of the importance of offices. Despite this, the sector is large and demand is buoyant – but there is not much new stock.
Excluding locations such as West Drayton and Hayes, existing space totals about 2.5m sq ft (232,250m2) located mainly in the traditional industrial district about half a mile to the west and south of Uxbridge town centre.
Ownership is concentrated in few hands. Uxbridge Industrial Estate, which dates from the 1950s, is mostly owned by Hillingdon council, and the Riverside Way area is owned jointly by Bilton and Sun Alliance.
Although some redevelopment is taking place, much of the stock is old. And, says Andy Jansons of Jansons & Partners, there are no new industrial and warehousing developments proposed or under construction. The stock dates mainly from the 1970s and 1980s and is now nearly all fully let.
Jansons estimates the vacancy rate at 6%, with no new significant developments on the horizon. Most of the vacant space – totalling about 150,000 sq ft (13,935m2) – is accounted for by the Almex site, Wyvern Way, and Highbridge Industrial Estate. These are large, older buildings which will gradually be redeveloped.
The industrial market has improved dramatically during the past 12 months. Jansons reports a number of requirements for prelets between 30,000 and 40,000 sq ft (2,787 and 3,716m2) which are difficult to satisfy because there are very few redevelopment opportunities.
He estimates that the level of unsatisfied demand is approaching 1m sq ft (92,900m2). Most occupiers are having to expand their search area to include Hayes, West Drayton and Slough.
But if demand is so buoyant, why isn’t redevelopment taking place? Simon Williams of Thomas Williams has no doubt that poor infrastructure is the main problem. He says: “Unfortunately, the industrial part of Uxbridge is mostly in the hands of property companies or the council who have not spent any money on their holdings for years and the infrastructure is poor.”
Uxbridge Industrial Estate, he continues, has only two access routes, one being a very narrow, single-lane, hump-back bridge. It would take relatively little expenditure to build a wider bridge.
“This is something that the council should consider to promote the town’s industrial base. No-one in their right mind is going to build a warehouse there at present,” says Williams.
Key transactions
- Cowley Business Park: Offices. Kyle Stewart Properties has presold a 26,000 sq ft (2,415m2) speculative office to Guardian Properties for £6m reflecting a yield of 7.5%. Salmon House, now under construction, forms the first part of phase two. Kyle Stewart purchased the 7.5 acre (3.03ha) site from Trafalgar House Business Parks for £2.5m.
- Harman House: Offices. Octel has taken the eighth floor at a headline rent of £17.50 (£188.39 per m2) with a rent-free period. Joint letting agents are Weatherall Green & Smith and Thomas Williams.
- Units F, G and H, Eskdale Road: Industrial. Vero Electronics has taken three units totalling 23,807 sq ft (2,212m2) on a new 10-year lease at a rent of £5.15 per sq ft (£55.44 per m2) with no incentives. Jansons & Partners acted for Sun Alliance Group Properties.
- Lovell House, High Street: Offices. Acting jointly with Thomas Williams on behalf of Rhone-Poulenc Chemicals, Grimley has let the first-floor suite of 3,718 sq ft (345m2) to Iliffes Booth Bennett for a rent of £46,475 pa, and the second floor of 2,721 sq ft (252m2) to Gaggenau for a rent of £27,210 pa.
- Armstrong House, fourth floor: Offices. US-based software company Open Environment Corporation has acquired 4,865 sq ft (452m2) with five parking spaces at a headline rent of £12.33 per sq ft (£132.72 per m2). Jansons & Partners advised the tenant and Keith Cardale Groves and Weatherall Green & Smith acted for the landlord.
