The level of take-up on UK business parks continued to bounce back encouragingly across the second half of 2013, with take-up across the UK being 23% above the five-year average, according to research by GVA, the UK’s largest independent commercial property consultant.
GVA’s latest bi-annual Business parks review indicates that the positive activity witnessed across the first half of 2013 continued and in many parts of the UK gathered strength, and that the period experienced the second highest level of activity since 2007. Availability is beginning to fall, by 1.7% nationally, but remains historically high. Yorkshire and the Humber and the North East saw the most significant fall in availability, at -8.3%.
UK business park office take-up during the second half of 2013 totalled 2.4m sq ft, which is 23% above the five-year six-monthly average of 1.9m sq ft. Activity was strongest in the South West, Wales and Scotland, where take-up was 50% above the five-year average. Owing to the availability of existing business park space in most parts of the UK, construction remains relatively subdued at 875,000 sq ft.
Carl Potter, Senior Director and national head of offices at GVA, said: “It is very encouraging to see that the take-up in business parks has continued to rebound. It is fair to say that business parks still present a viable and attractive option to forward-thinking organisations. Occupiers such as Astra Zeneca, HSBC and Honda have all taken on major deals at existing business parks.”
In terms of new supply, the majority of development activity is in the South East, where Farnborough Business Park, Chiswick Park and Milton Park in Abingdon all saw new units in the pipeline or recently completed. There is a shortage of grade A stock in Aberdeen and South Manchester, meaning both are ripe for new development, while the science/tech sector continues to expand at both Birmingham Business Park and Bristol & Bath Science Park.
Availability continues to decline, and at the end of 2013 stood at 17.2 million sq ft, a 1.7% fall over the period and from its peak of 18.6 million sq ft a year ago. Vacancy rates have fallen in all regions from post-recession peaks, but most significantly in the South East (17.2% to 14.6%), the Midlands (16.5% to 12.2%) and North West (20.7% to 17.2%). It remains highest in Scotland (38.1%).
Carl Potter continued: “Though availability remains good in many regions, we are beginning to identify parts of the country where the existing good quality space is all but used up. Aberdeen, Manchester, Birmingham, and parts of the South East and South West all offer exciting and viable development opportunities to continue to meet the demands of occupiers.”
David Thwaites from GVA’s Manchester office, added: “The imminent lettings to Emirates and Costain at Manchester Business Park following on from the successes last year at Cheadle Royal and Birchwood Park demonstrate that demand remains for strategically located business parks that can offer a wide range of amenities.
“The dearth of available business park stock within traditional business park strongholds such as South Manchester is a real concern. At present there are only four standalone buildings that can accommodate requirements in excess of 30,000 sq ft within South Manchester and, with no speculative development, pre-lets will be required for many larger occupiers in order to meet their operational requirements.”