Transactions on business parks remain steady, says Grimleys
Take-up levels on business parks across south Manchester, Chester, Salford and Warrington have remained steady, according to GVA Grimley.
Within the property consultants' summer business park review, covering the first six months of 2010, it said transactions totalled 151,000 sq ft, which was in line with the current five year average but 57% below the corresponding period last year.
GVA Grimley said significant out of town lettings included the John Lewis Partnership and American technology company, SPX, both taking approximately 20,000 sq ft at Towers Business Park in Didsbury, which is owned by Dutch investor Wereldhave. Management solutions firm, LGC Standards, agreeing to pre-let 20,000 sq ft at Property Alliance Group's The Green in Bury was also regarded as a significant out of town letting.
Within each of the North West areas covered in the survey, GVA Grimley said prime headline rents have remained static during the 12 months to June 2010, with Chester the highest at £19/sq ft followed by south Manchester and the airport, £18/sq ft, and Warrington/Birchwood, £17.50/sq ft.
However, GVA Grimley's survey highlights that the headline figures mask the softening of tenant incentives, particularly in the form of rent-free periods, which the property consultants said remain generous by historical standards.
GVA Grimley said that the 337,000 sq ft under construction comprised just two schemes, both of which were pre-let to public sector occupiers, including the new 240,000 sq ft Greater Manchester Police headquarters at Central Park in Manchester, which is being developed by Ask:Goodman Developments on behalf of New East Manchester, and 100 Birchwood Corporate in Warrington, owned by Marshall CDP and totalling 102,000 sq ft, pre-let to the Home Office.
In terms of availability, 924,000 sq ft of office space was available, which was a decrease of 17% from six months earlier. According to the report, the parks with the highest level of remaining volume are Daresbury Park, 109,000 sq ft, Chester Business Park, 90,000 sq ft, and Concord Business Park near Manchester Airport, 82,000 sq ft.
Simon Reynolds, head of offices at GVA Grimley in the North West, said: "Looking ahead, occupier demand is expected to improve but there remain a number of downside risks to rental growth due to the fact that there is an over supply of both new and existing buildings.
"The fortunes of the business parks market will be largely influenced by growth in the private sector. Much will depend on the performance of the financial and business services sector, as well as the telecoms, technology and pharmaceutical firms, that currently dominate the demand for office space on the North West's business parks."