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Location, location, location

PUBLISHED: 11:23 26 September 2012 | UPDATED: 21:57 20 February 2013

Location, location, location

Location, location, location

Where are the best and worst places for investing in Cotswold commercial property? And where are the best rents achieved? We asked local agents

Location, location, location

Where are the best and worst places for investing in Cotswold commercial property? And where are the best rents achieved? We asked local agents

Retail


According to Julian Capewell, associate at commercial property consultancy Bruton Knowles, its still a challenging time for high street retail with the big name brands tending to migrate to out-of-town retail parks, coupled with intense competition from online retailers and the ongoing recession.

However, there is still demand for larger retail units in town and city centres: Marks & Spencer opened in the former Woolworths site on Gloucesters Eastgate Street and H&M plans a flagship store at the entrance to Cheltenhams Regent Arcade.

Its the landlords who cater to small, independent retailers who are doing well, especially ones with space to offer in tourist destinations like Burford and Bibury, says Julian. Here, busloads of visitors spend time browsing and buying. Delis and specialist boutiques also do well in Cirencester and Cheltenham because of the relative wealth in these areas and customer for a personalised shopping experience.

Savills agrees, but points out that demand from national retail multiples has retracted to the principal trading locations within key Cotswold towns and the wider area. Retailer requirements for smaller and tourist-dependent settlements tend to be restricted to companies which understand the local markets.

Max Douglas at Maxwell Douglas Property adds: Investors in North Cotswolds commercial property are seeing the best returns on retail premises in the popular tourist destinations such as Burford and Stow On The Wold. The large footfall all year round has seen record rents of up to 60.00 per sq ft achieved in Stow Square.

Office


The Cotswolds office market is concentrated around the principle towns located on the M4 and M5 corridors: Cheltenham, Gloucester, Bath, and Swindon, according to Savills, (which has an all-embracing view of where the Cotswolds begins and ends). Town centre locations are favoured in Bath and Cheltenham, with access to retail and leisure amenities. Out of town business parks are popular around the not-quite-so-pretty Swindon and Gloucester, with instant access to the motorway network and greater levels of car parking. Everywhere occupiers worry about transport, access to public transport, and the energy efficiency of their buildings. Modern office buildings and sustainably refurbished premises are achieving good levels of rental income.

Gloucester Business Park has to be in the running for commanding some of the highest quoted rents of around 16.50 per sq ft, says Bruton Knowles Capewell. But its for good reason; the park offers excellent facilities, good estate management and is close to junction 11A of the M5.

Rents for professionally managed, open plan and modern office space in Cheltenham are headlining at around 14.00 per sq ft. Ellenborough House, where Bruton Knowles and Savills are acting as joint agents, offers this mix; the property has been completely refitted by its owner Ignis Asset Management to provide quality, open plan office facilities. Around 85% of the 20,000 sq ft put on the market for let in late 2011 is already under offer commanding around 14.50 per sq ft.

According to Max Douglas: Office and warehouse properties are in high demand in locations such as Cotswold Business Village in Moreton In Marsh which offers purpose built high spec business units for example No 7, Cotswold Business Village which is 5,923 sq ft and recently sold with a guide price of 750,000. Properties such as this, offering a combination of uses including an element of retail warehouse, storage and office space, can achieve rents of circa 8.50 per sq ft per annum. There continues to be demand from owner occupiers although the difficulties in raising bank finance has forced many businesses to rent commercial space.

But Julian Capewell has a warning for slapdash landlords: One issue with office space is that owners do not always present their property as well as they could, so the best rents cannot be achieved. For example, buildings, which have been left vacant for a period will get dirty windows, collect dead flies on the carpet and generally look uncared for. Yet these properties will be shown to prospective tenants in this state. In this sense, landlords could learn from the residential market where the value of presentation is more fully realised.

Industrial


Industrial property hotspots are still clustered around junctions 9 to 13 of the M5, according to Bruton Knowles. Manufacturers want easy access to the motorway network and many will specify that a site must be located within a 3 mile radius of one of these junctions. This is why Tewkesbury has to rate as one of the most desirable locations; it is close to both the M5 and M50, said Julian. Another requirement is for modern, high quality space with an eaves height of at least 6 meters in contrast to older style warehouses, which have an eaves height of around 4.5 meters. So high quality space, in the Tewkesbury area, should comfortably command around 5.50 per sq ft. Rent levels, of course, reflect the desirability and location of sites with the very highest rents headlining at circa 6.50 per sq ft at Gloucester Business Parks industrial units, while the lowest to be found in Gloucester city centre and along the A38 at around 3 - 3.50 per sq ft.

Savills adds that the excellent transport links and good labour supply of the principal Cotswold Towns keep attracting large retailers and logistics companies to the area and in doing so permit this real estate asset class to continue to out perform its rivals.

Harwell Oxford, the scienceof success

Following the announcement of a 20 million investment by Element Six to build the worlds most sophisticated research and development facility at Harwell Oxford, we take a look at this growing science park.

Element Six, the global supplier of synthetic diamond supermaterials, is investing 20 million in the project, consolidating its global teams into one integrated centre.

But the company is just one of around 150 organisations and over 4,500 people located on the site, including key UK Research Councils, start-ups and multi-national organisations. Harwell Oxford is a joint venture between global property group Goodman, the UK Atomic Energy Authority and the Science and Technology Facilities Council.

This summer, Harwell Oxford welcomed the announcement by Science Minister David Willetts that the UKs new Satellite Applications Catapult, a centre of excellence that will bridge the gap between business, academia, research and government is to be based at the campus. Harwell Oxford was chosen because of the growing cluster of organisations already based at the site and the dedicated advances in space technology and satellite applications. It is hoped that the Catapult will give real impetus to commercial development in this area, allowing the UK to set itself ahead of the competition.

In 2010, the Government announced the establishment of a 40 million international space centre at Harwell Oxford, joining the European Space Agency and the following year the science park played a significant role in the successful bid for Enterprise zone status by Oxfordshires Local Enterprise Partnership. The bid, great news for Oxfordshires Science Vale area, is expected to create around 8,400 jobs and generate up to 10.5m of additional business rates each year, to be reinvested into the Oxfordshire economy.

French engineering company Magellium, specialising in geomatics, image processing, robotics and information technology, chose Harwell Oxford as the location for its UK subsidiary in 2009. Magellium Limited has projected revenue for 2012 of 1 million growing to 2 million in 2013. Located in the International Space Innovation Centre on the campus, Magellium Limited is currently delivering contracts for the European Space Agency.

Painswick welcomes independent estate agents

Moulton Haus, a new firm of independent local estate and letting agents covering the area from its Painswick base is guaranteeing to offer sellers and landlords a simple, professional, tailored service with a personal touch.

We are an independent family firm so were driven by service not targets, says director Hugo Moulton, a member of the National Association of Estate Agents and previously the manager of an established Gloucester estate agency.

In an industry not renowned for its transparency, according to Moulton Haus, its emphasis is on being open with clients. Attention to detail and constant communication are key, Moulton continues. We are genuinely proactive in marketing a property, finding the best purchaser or tenant and working to bring every contract to a successful conclusion with as few complications as possible.


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