Home to household names in the tech and pharmaceutical sectors, the market has undergone regeneration but presents little upcoming office development.
Equidistant between the M3 and M4, 2017 was a pivotal year for Bracknell. A significant part of the town centre’s extensive regeneration was completed in September, bringing a much needed high quality amenity offer to the town.
Centre stage of the work is the Lexicon, an investment of £240 million which created 580,000 sq ft of space. Its completion has established a retail offer of 70 new shops, high quality restaurants and a 12 screen cinema.
The transformation of the town has been inclusive of the conversion of office space to residential use. Close to 630,000 sq ft of office space has been subject to residential planning, a number that has now led Bracknell Forest Council to invoke Article 4, constraining further conversion.
Bracknell is located at the heart of the UK’s answer to ‘Silicon Valley’ meaning the technology sector has provided a basis for market growth. Over the past decade, demand derived from technology firms has accounted for 38% of office take-up, with around 70% of that satisfied within one of Bracknell’s business parks. Resident firms now include Vodafone (formerly Cable and Wireless), Panasonic, Dell, Hitachi and Fujitsu.
The skew towards the business park product in Bracknell has attracted the pharmaceutical and research sectors. Leading industry firms such as Boehringer Ingelheim, Syngenta and Johnson & Johnson all have a presence.
Overall market availability dipped to just over 400,000 sq ft at the end of 2017. Currently, there is no active development underway. Within the next five years, 252,600 sq ft across three substantial schemes are in the pipeline.
With annual headline rents in the mid-twenties, it is impossible to justify speculative development. Our forecast rent of £29.50 per sq ft by 2021 barely supports viability for the quality of space occupiers demand.
Key lease events combined with the arrival of the Lexicon supported a strong year for market activity in 2017. An unusual spike. 2018 is anticipated to revert to the historical take-up trends.
Attracted by low rental values, occupiers accept the lack of the Elizabeth Line and fast train connections to London – both key to the success of Reading and Slough. The new town centre is creating important place activation and improving demographics, both key to the employer decision-making process. Bracknell, however, will remain the centre for ‘good value’ offices.