Take-up of business park space drops

TAKE-UP  levels of space on the region’s business parks slowed in the first half of 2010 but remain in line with a five-year average, according to a new report by GVA Grimley.

The consultancy’s Business Parks Review showed that business park transactions in the region totalled 151,000 sq ft in the first six months, which was 57 per cent lower than the “surprisingly strong” first half last year but close to the longer-term average.

Major out-of-town lettings include the John Lewis Partnership and US technology company, SPX – both of whom have taken approximately 20,000 sq ft of space at Towers Business Park in Didsbury.

LGC Standards has also taken a 20,000 sq ft pre-let at Property Alliance Group’s The Green scheme in Bury.

The report said that prime headline rents have held up, with rents remaining static in Chester (£19 per sq ft), South Manchester (£18) and at Warrington/Birchwood (£17.50). However, tenants are benefiting from better incentives, including long rent-free periods which remain “generous” by historical standards.

There is 337,000 sq ft of new space under construction on just two schemes, both of which secured large pre-lets to public sector occupiers – Greater Manchester Police’s new Headquarters at Central Park in Manchester (240,000 sq ft) and the Home Office building in Warrington (102,000 sq ft).

Speculative development has practically ceased over the last two years, with no new schemes starting on site in the areas covered by the survey.

However, the amount of available space fell by 17 per cent during the period, with Daresbury Park, Chester Business Park and Concord Business Park near Manchester Airport having the most space still available.

GVA Grimley’s North West head of offices, Simon Reynolds, 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 oversupply 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.”