Gloucester’s commercial property market is riding high, according commercial property agents Alder King.
In its latest market report launched this week, Alder King said occupier demand for industrial and office space, and developer demand for land remained robust, with many businesses looking beyond short term challenges and pressing ahead with their plans for growth.
Take-up of industrial space in Gloucester totalled 705,000 sq ft, the city’s highest take-up figure for over 15 years and 20% above the five year average. The largest single completion was the 183,000 sq ft manufacturing building by Arlington for GE Aviation at Gloucester Business Park but there was also strong take-up of new mid-range units at Gateway 12 and St Modwen Park Gloucester.
Gloucester is one of the most active markets in the region, with an impressive programme of speculative development. However much of this development pipeline is being taken up by ‘early raiders’ – businesses with requirements need to plan much further ahead to secure the space they need.
As well as the new space at St Modwen Park Gloucester, Howard Tenens has started construction on the next phase of Severn Distribution Park at Sharpness which will bring forward 467,000 sq ft in three buildings.
Chancerygate is underway on its speculative Furlong Park scheme at Bishops Cleeve and is also bringing forward Festival Trade Park on Kingsditch Trading Estate in Cheltenham which will provide nearly 92,000 sq ft in 14 units.
Take-up in the city’s office market last year was 160,000 sq ft, down on 2018’s record figure of 220,000 sq ft, but still in line with the five year average of 164,000 sq ft. Much of this take-up was for out of centre space.
Unlike the industrial market, there is no speculative new office build underway. This means supply, which now stands at 180,000 sq ft, is mostly a mix of prime refurbished and secondary space. This is likely to fuel further design and build activity for larger, more bespoke requirements, similar to the 65,000 sq ft pre-let to Ecclesiastical Insurance Group on Gloucester Business Park.
The serviced office market has expanded in Gloucester. Regus now has two facilities, at The Docks and on Worcester Street and BizSpace has completed its refurbishment at Barnwood Point.
The city’s investment market performed extremely well in 2019, up 81% on 2018 with £123.8 million of investment. This was the city’s strongest ever performance. Significant transactions included The Dunmoore Group’s acquisition of Bamfurlong Industrial Park for £7.45 million and the sale of Goodridge Trading Estate for £1.9 million, a transaction handled by Alder King.
The retail market generally continues to suffer. Tenants continue to default or rationalise their estates. however, in Gloucester, there is a good level of new development. The second phase of the Bakers Quay development is now underway. This will provide 20,000 sq ft of retail and leisure space with 70 apartments while bringing back into use of Gloucester’s most iconic historic dock buildings, and Paloma Capital’s mixed use scheme, Access Park, secured planning permission and will deliver 55,000 sq ft of non-food retail, a drive thru restaurant, pub and hotel.
Adrian Rowley of Alder King said: “Gloucestershire continues to exert a strong pull with occupiers, investors and developers.
“Demand from the region’s manufacturing sector in particular is driving new development in the county. However speculative development takes time to deliver and so in the short to medium term, the market remains constrained by a lack of supply. Forward planning is the watchword for 2020.”