Swindon Commercial Property Review 2019
There is no denying that 2019 has been another challenging year for the regions although the decisive outcome of last year’s general election has given much-needed clarity and confidence to the market. Market sentiment is high and we are confident in the outlook for the next 12 months.
There have been several sizeable office transactions in Swindon over the last 12 months, most notably Nationwide’s acquisition of Trilogy on Kembrey Park (76,000 sq ft), Openwork’s acquisition of Auckland House, Lydiard Fields (36,000 sq ft) and the British Computer Societies lease of the 4th and 5th floors in Newbridge square (18,000 sq ft) which represented the largest single office letting in Swindon town centre in over a decade.
It is understood that Zurich have committed to a new 100,000 sq ft HQ office build in Swindon Town Centre which suggests that we will see Tower cranes on Kimmerfields during H1 2020. This will be the first brand new office building in Swindon town centre for nearly 30 years and is a real vote of confidence in the town. This transaction will lead to the regrading of Fleming Way and significant works around the development site to upgrade the public realm in this part of town.
The out of town office market continues to dominate letting activity in Swindon. Office supply in the town has continued to fall and with no speculative office development on the horizon, this undersupply situation is putting firm upward pressure on prime office rents. Yet despite this growing pressure on the town’s office stock, Swindon still represents excellent value for money when compared against the Reading and Bristol markets.
The announcement by Honda that it is to close its Swindon plant was extremely disappointing but not wholly unexpected given the current political and economic climate. That said, Swindon has lived in the shadow of Honda for many years now and whilst the ramifications of the plants’ closure will be hard felt it will bring with it fresh commercial opportunities once the dust settles. Swindon has always attracted a diverse range of occupiers and is renowned as a good place to do business and this will hold it in good stead for the future. Whilst it is inevitable that we will see an increase in the second-hand supply of industrial accommodation entering the market we remain confident that the locational benefits of Swindon as a logistics hub coupled with existing demand for space in the town should absorb much of this space.
Swindon witnessed three speculative Industrial developments last year which has provided much-needed supply. These are Ignition at Dorcan, Trinity Park at Hillmead and Kembrey Place. Ignition has already secured two occupiers with DHL and Consumables taking 80,000 sq ft and 22,500 sq ft units respectively at record rents for the town which further demonstrates the need for good quality space. B&Q completed its 375,000 sq ft expansion at G Park cementing its commitment to Swindon as has Oak Furniture land which took an additional 150,000 sq ft at Groundwell. There is strong interest in the speculative 620,000 sq ft proposed unit at Symmetry Park which if let will take away the largest unit currently available in the town.
To conclude, with most business space markets being impacted by an imbalance between supply and demand it is likely that we will continue to see pressure on headline rents across Industrial and Office rents in Swindon. The future development pipeline for both offices and industrial accommodation is therefore critical in shaping the town’s future, not only to attract inward investment but also to retain existing occupiers in the town. Enquiry levels have noticeably improved following the general election and interest from commercial property investors remains high.