12 November 2018
Woking Office take up in 2018 tops the town’s 10 year annual average.
This article first appeared in Property Weekhttps://www.propertyweek.com/markets/woking-office-take-up-in-2018-tops-the-towns-10-year-annual-average-/5099707.article
Woking has not experienced significant office development since the 1980s and 1990s, resulting in a market dominated by ageing and refurbished stock. This lack of grade-A space has had an adverse effect on take-up levels and headline rents in recent years. However, 2018 has delivered a dramatic change in fortunes.
Figures from BNP Paribas Real Estate (BNP PRE) show that take-up of offices in excess of 5,000 sq ft totalled 125,000 sq ft in the year to date, far exceeding the town’s 10-year annual average of 55,000 sq ft.
Key deals include the serviced office provider Spaces agreeing a 10-year lease for 39,000 sq ft of grade-A space at new development Woking One, while McLaren agreed to take the entirety of the recently developed 65,000 sq ft Victoria Gate last month.
Rhodri Shaw, director, national office agency, at BNP PRE, attributes this unusually high take-up figure to new speculative developments, which had been slow to come through in Woking compared with other towns in Surrey and the M4 corridor.
The speculative developments he refers to are Aviva Investors’ Victoria Gate and Woking One, a 36,000 sq ft grade-A office building being developed by Wrenbridge and Palmer Capital next to the train station. BNP PRE is the joint agent on both schemes.
“Woking One and Victoria Gate are the first new office developments in the town for over six years,” says Shaw. “This has meant that Woking headline rents have lagged behind other Surrey centres such as Guildford.
“These new developments have encouraged occupiers to commit to new grade-A accommodation setting a new headline rent in Woking at £33/sq ft. However, we anticipate this will be surpassed once the next new development is delivered.”
As well as Woking One and Victoria Gate, Space, a circa 85,000 sq ft grade-A office building, is also under construction and is due for completion in Q2 2019.
As for investment, Hugh White, head of national office investment at BNP PRE, says investor interest in the town is growing.
“Institutional belief has been demonstrated by Aviva’s Victoria Gate development and Royal London’s ongoing development at Space, while continued interest in the town has been shown through Mayfair Capital’s recent purchase of AB InBev House,” he says. “This provision of new grade-A supply will aid investment in the town centre and is satisfying the latent demand.”
He adds that the actions of Woking Borough Council have helped to attract inward investment and new businesses to the area.
“There have been major improvements to the public realm and Woking Borough Council is committed to improving the town centre and encouraging businesses to make their home there,” he says. “The council is particularly proactive having recently purchased [office buildings] Dukes Court and Orion Gate.”
White notes that because Woking is located in the centre of Surrey it does not attract ‘spill-over’ from the Thames Valley. However, he says “its convenient links to London make it a popular choice among businesses looking to tap into London’s talent pool”.
White anticipates that the continuing regeneration of the town centre – which includes Victoria Square, a mixed-use scheme comprising retail, residential and a new Hilton hotel that is due to complete in 2020 – will further encourage investors to Woking.