Bidwells’ latest research into property trends in Milton Keynes shows a modest improvement across the board with the industrial sector showing strong take up and returning levels of demand for offices.
With what is happening to financial markets around the globe and the reality of the austerity measures now taking hold, it is no time to be overly optimistic, but encouraging signs are emerging that once again point to the robustness of the local economy.
Industrial activity in the first six months saw in excess of 1.2 million sq-ft of floor space transacted – a return to levels pre-dating the recession following a period of steady growth over the last 18 months. Industrial rents appear to have stabilised and whilst vacant stock is continuing at circa 4,000,000 sq-ft or 13 per cent of total stock, the supply of Grade A space is reducing which may potentially lead to upward pressure on rents and the return of some development.
Notable transactions in the first six months have included: Waitrose acquiring 320,000 sq-ft of new warehouse space at Celestia at Snelshall, Furniture Village taking 104,000 sq-ft adjacent to Junction 13, Dwell taking 150,000 sq-ft at Brinklow and ParPak acquiring 70,000 sq-ft on Kiln Farm.
Performance in the office sector appeared to be recovering strongly.
However, evidence points to the recovery stalling in the first six months of this year, with take-up falling when compared to similar periods in recent years. The slowing of office take-up, while a concern, is acknowledged to have followed a strong peak in 2010 and with office enquiries improving in 2011 we are expecting to see a further spike in office take-up in the latter part of this year. In tandem with the industrial sector, office rents have stabilised and while we are seeing historically high levels of supply with availability rates approaching 25 per cent, the availability of Grade A space has reduced and once again this points to potential rental pressures on the better grade space, and talk about the return of some development activity.
Notable transactions in the first six months have included: DHL taking 11,000 sq-ft in 249 Midsummer, Robert Half and Marsh UK taking c 5,000 sq-ft and 7,000 sq-ft respectively in the Pinnacle and Surgi Call taking 9,500 sq-ft in Metropolitan House.
With the Milton Keynes property markets having weathered the worst of the recession relatively unscathed, we are looking forward with cautious optimism. The potential transfer of assets from the Homes and Communities Agency to Milton Keynes Council could provide a degree of local control not seen since Milton Keynes Development Corporation days and with Milton Keynes chosen as a front runner for the government’s Business Neighbourhood Scheme with its offer of relaxed planning and initiatives to promote development, Milton Keynes could be well placed to emerge out of recession stronger and in more control of its own destiny.
A free copy of the latest research is available from Charles Macdonald at Bidwells on 01908 202190.