A lack of office space in Southampton is forcing businesses out of the city and creating opportunities for outlying towns, says property consultancy JLL.
Chandlers Ford and Eastleigh in particular are thriving as business locations as they are attracting organisations who want the benefits of a business park environment, rather than a city centre location.
One of the main attractions for businesses is the generous car parking that is available in out of town locations – the car parking ratio at Chandlers Ford is 1 per 180 sq ft compared with 1 per 1,000 sq ft in the city centre.
Gateway House, a 55,000 sq ft office building at Tollgate Business Park in Chandlers Ford, is now fully let for the first time, with Konica Minolta, KPMG, One Insurance and most recently law firm Moore Blatch, completing the tenant lineup. JLL and CBRE marketed the building.
Nella Pang, associate director at JLL’s office in Southampton, said: “We are seeing a lot of investment into this area from developers that see the potential of places outside the main cities on the South Coast. We expect this trend to continue as the lack of office space in the main urban hubs remains a big issue for businesses looking to expand or relocate.”
Emma Lockey, associate director at CBRE’s Southampton office, said: “Chandlers Ford is particularly attractive to investors as it is in a strategic location close to the M3 and M27 motorways, Southampton airport and Parkway Railway station, and offers a range of office type and size that is unavailable in the main cities.”
The biggest and most active investor in Chandlers Ford’s commercial property sector is Troika Developments – a Dorset-based developer of industrial, retail, offices and leisure properties across the UK. Over the last five years, Troika has bought around 265,000 sq ft of office space across four buildings in the Chandlers Ford area, with JLL and CBRE advising on all four deals.
Nella continued: “Last year, around 363,000 sq ft of office space on the South Coast underwent a lease renewal or new letting. Troika’s office buildings account for 73 per cent of this figure.”
Troika recognised that Chandlers Ford and Eastleigh are excellent business locations so the company embarked on an ambitious acquisition programme that has focused on buying and developing properties to a high quality to meet the needs of modern occupiers. For example, the company carried out an extensive refurbishment at Gateway House in 2015, improving its EPC rating from E to a B Rating.
“This has resulted in major companies staying in the Chandlers Ford area including Chloride Group, Cisco and Ageas Insurance with all space in Troika’s buildings now fully let,” says Nella.
JLL says that it is becoming increasingly important for office buildings to offer reception areas with a ‘wow factor’ and a high car parking ratio, and that Troika has understood that in its developments.
“We are acting on behalf of a number of occupiers who are looking for space along the South Coast, and exceptional reception spaces with good car parking feature highly on their agenda,” says Nella.
CBRE’s Emma Lockey continues: “Features which support staff retention are also high on the list. These include communal breakout areas, agile working space and showers and bike stores.”
Nigel Walters, managing director, Troika, said: “The South Coast is well placed to attract blue chip occupiers and we believe the out of town market presents a particular opportunity for investment. We continue to be very active in the Hampshire and Dorset property market.”