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Knight Frank


Two new occupiers have been attracted to the Liberty Industrial Estate in Ashton Gate, South Bristol.

The Window Outlet Ltd has taken a five year lease on the 8,187 sq ft Unit 11 at an annual rental of £32,338.65, while the 10,959 sq ft Units 4 & 5 have been leased by Jing Xing Trading Co. Ltd for 12 years at a rental rising to £43,848.

Landlord CBRE Global Investors was advised by joint agents Knight Frank and Russell Property Consultants.

Russell Crofts, who heads the Industrial team at Knight Frank in Bristol, said: “The industrial units at Liberty Industrial Estate have recently been refurbished and modernised, with vacant units receiving new flooring, new lighting, toilet and kitchen refurbishments as well as complete internal and external redecoration.

“The result is revitalised accommodation which is proving very popular with a range of occupiers.”

Rob Russell of Russell Property Consultants added: “With good access to the Portway and on to the M5 Liberty Industrial Estate ticks all the boxes for trade counter, distribution and light manufacturing companies.”


Following the Grade A refurbishment of two floors in No 1 Whitehall Riverside in Leeds, landlord NFU Mutual has announced the letting of 8,300 sq ft of space to Handelsbanken for a new regional head office serving Yorkshire and the North East.  Handelsbanken has agreed a new 10 year lease at a rental of £26.00 per sq ft.

David Hidderley from landlord NFU Mutual said: “Securing a 10 year lease, at the new headline of £26.00 per sq ft, fully endorses the business strategy for this Grade A building.  We are delighted to welcome Handelsbanken to the building and hope to announce further lettings very soon.”

Simon Lodge of Handelsbanken added: “We are really pleased to have secured space in No 1 Whitehall Riverside, it is a great building for all our business needs and that is why we have committed to a long term lease.”

In addition to the  £1million investment in the 4th and 5th floors, NFU Mutual has, at its own cost, invested  a further £150,000 in the refurbishment of the entrance foyer and reception and in so doing have further enhanced the building’s reputation as one of the finest office buildings in Leeds.

Richard Thornton of letting agents JLL added: “No 1 Whitehall Riverside is already home to a number of corporates and Handelsbanken is another high calibre occupier to be added to an already impressive tenant line up and who benefit from some fantastic amenities on the ground floor with the very recently upgraded and remodelled Riverside Café.”

Richard Fraser of Carter Towler who advised Handelsbanken concluded: “There were a number of Grade A buildings for Handelsbanken to consider but No 1 Whitehall Riverside ticked all the boxes from location, superb floor plate configuration and image of building.”

JLL and Knight Frank are letting agents for No 1 Whitehall Riverside which comprises eight floors of office accommodation.

Last week saw Sweden’s Riksbank become the latest central bank to announce a negative interest rate, joining the Eurozone, Denmark and Switzerland. At the time of writing ten year bond yields are now at or below 0.5% for Austria, Denmark, Germany, Japan, The Netherlands, Sweden, and Switzerland. Suddenly the yields on UK commercial property look huge, particularly if you are an overseas investor, beckoning the question, how will a normal spread be restored?

The idea that bond yields and interest rates could sharply increase is unlikely for the foreseeable future, so the other alternative – property yields fall – feels a more probable option.

However, there is a third, and more bearish scenario, which is the gap stays the same or perhaps even widens as bond yields go lower, as arguably the spread is there due to risk levels. Central banks are printing money because they are concerned about the outlook, and the spread reflects the greater risks involved in holding an asset like property, that does best in a rising economy, during tentative times.

Also, deflation threatens to create its own bizarre economics in Europe. If inflation is minus 0.33% in Switzerland and a 10 year bond yields 0.05% there is still a spread of 38 bps for anyone who is feeling cautious.

There is of course no correct size for the spread, which is dictated by how bearish or bullish the market has become. At a time when there is talk that Greece may yet crash out the Euro it is unsurprising that some are prepared to accept negligible yields on safe haven bonds, but that is unlikely to continue indefinitely. If investors can find a recovery to ride they will do so, particularly when it is in a G7 nation. Also, one has to wonder at the pressure that will build on those in bonds to take profits and redeploy it elsewhere as we get further into the latest round of QE.

To this backdrop the UK offers an established economic recovery, and a property market where discussion on the impact of bad debts has almost disappeared. Prices have been rising for 21 months on the IPD measure, and rental growth is re-emerging outside of central London.

Money is being printed in the Eurozone (and Denmark and Sweden), but it can travel where it likes in the EU to be invested. Similarly rates on the continent can be set at levels intended to strong arm bankers into lending, but they can lend abroad rather than at home. For some European investors and lenders, UK property could look a safer bet than domestic markets, as there are probably further road bumps ahead for the Eurozone.

Yes, the exchange rate is not in the favour of a Euro buyer looking at the UK. However, while the pound has been steadily strengthening against a range of currencies for some time foreign investment volumes in London are still high, probably thanks to currency hedging. Plus there is the prospect of receiving rent payments in an appreciating currency, and a lesson of recent years has been portfolio diversification has advantages.

So we believe a QE boost for UK property could be around the corner.

This beckons the question where will this money go in the UK?

While there are well publicised examples of foreign money now heading into the regions, overseas investment is typically less comfortable deploying beyond London and we should expect the capital to be the main target. Foreign money has accounted for the majority of investment in the central London market for seven of the last ten years, and 2015 looks set to extend the trend towards international dominance. While regional yields may be higher than those in London, the finance environment for those coming in from abroad makes the numbers work in the capital, and there is little reason to expect this to change suddenly.

Thus we could be looking at another year where central London is a difficult market for the typical British fund to buy into. For UK investors the regions should now be at the top of the agenda.


Following its recent acquisition of the 91,000 sq ft Rainton Bridge Business Park in Houghton Le Spring in the North East, Harbert and XLB Property have appointed joint office agents CBRE and Knight Frank. The instruction continues the firms’ long-standing prior appointment on the project and well documented success in achieving and retaining high occupancy levels.

It was recently announced that Harbert Management Corporation, with asset manager XLB, has completed its acquisition of Project Emperor, a portfolio of UK business park assets, for £137m, from Arlington Business Parks Partnership, which is jointly managed by Goodman and Legal & General Property. Rainton Business Park is part of the portfolio.

Rainton Bridge is a major business park situated 5 miles to the North East of Durham City Centre and 7 miles to the South West of Sunderland City Centre in close proximity to Houghton-le-Spring Town Centre. Together with the owner occupied RWE npower building, it comprises 820,000 sq ft of commercial offices with over 40 businesses already in operation and offers new companies’ grade A office suites from 4,365 sq ft to 28,771 sq ft.

The park has recently welcomed Johnston Press in December 2014 to its impressive tenant line up.  The owner of the Sunderland Journal will relocate from its current Pennywell facility into some 9,000 sq ft within Alexander House on a new 10 year lease in February.

The business park boasts a state-of-the-art telecommunications infrastructure, sustainable buildings, flexible design, excellent public transport services and a powerful partnership with Sunderland City Council. It provides property for small high growth companies, right through to large corporates such as RWE npower.

The North East of England has a proven track record of attracting world leading businesses to the region, and Sunderland’s Software City Initiative has helped the city to become one of the UK’s top locations for new business start-ups.

Jonathan Shires, Senior Director of Office Agency at CBRE Leeds, said; “Rainton Bridge Business Park has strong occupier appeal due to its established location, modern office accommodation and good connectivity to the cities of Sunderland and Durham.  Following the recent letting to Johnston Press, we are in further detailed discussions with several other occupiers and hope to announce deals in due course”

Patrick Matheson, Partner in Office Agency at Knight Frank added, “The recent acquisition by XLB Property has placed renewed focus on attracting new tenants and we believe the remaining office space will be highly attractive to a wide range of occupiers due to its high quality space and stunning landscaped environment.”

William Poole at XLB added; “Rainton Bridge Business Park is situated in a premier position within the North-East and has built a reputation as one of the North’s leading business parks. Given the strong occupier market and high quality office accommodation provided on site we anticipate a strong 2015.”


Cardiff Waterside, an Aviva Investors supported scheme in the heart of Cardiff Bay, has announced its Caspian Point office development is close to full occupancy, following the completion of three new deals.

In moves that see Caspian Point strengthen its position as one of the most popular and important office developments in the Capital city and reach 95 per cent occupancy, three new deals have been completed in recent weeks by leading property agents, Knight Frank and Cooke & Arkwright. These include:

·     Sapiens International, a global leader in providing software solutions for the insurance industry, now occupying the whole of the third floor, 12,800 sq ft, on a 5 year lease

·     Creditsafe Group, the world’s most used provider of on-line company credit reports committing to 12,785 sq ft on a ten year lease

·     Energy Saving Trust, the number one organisation helping householders, governments, businesses and organisations save energy, committing to 3,800 sq ft on the 4th floor

The news also means that across the whole Cardiff Waterside office development, consisting of 460,000 sq ft, only 8 per cent of space is left available.

Mark Sutton of Knight Frank and Ben Bolton of Cooke & Arkwright, the joint agents for the development commented:

“These deals are fantastic news for Cardiff Waterside but also for the city as a whole. It is important that leading international organisations see Cardiff as a good place to do business, and the decision to be based at Cardiff Waterside is made simpler by not just its excellent location, but also the Grade A quality office space available, which is in short supply.

“Cardiff Waterside is one of the leading office destinations in the city and this latest announcement and the fact the whole development is so close to being fully let underline that fact.”

Reinforcing the importance of Cardiff Waterside as a location, Cato Syversen, CEO of the Creditsafe Group adds: “It is important that as a company we are seen to be at the heart of business activity in the region and Cardiff Waterside fulfils that need for us.

“Cardiff Bay has had huge investment in recent years and has become a focal point for business growth and development; Cardiff Waterside is at the heart of that growth. We are delighted to have signed a deal that will see us staying in the area for the next ten years at least.”

More deals are expected to be announced by Cardiff Waterside in the coming months and there is planning consent granted to develop a further 625,000 sq ft of office space across four sites within the development in the coming years.


The London office market produced its best performance since 2000 last year with take-up of office space in central London rising by 16% to 15.9 m sq ft, according to new figures from Knight Frank. This is well ahead of the ten year average figure of 13.0 m sq ft.

The research was presented at Knight Frank’s annual central London breakfast at the Dorchester Hotel on Park Lane.

Key office leasing market points:
Supply of office space fell by 20% in 2014 to 12.9 m sq ft; the lowest level since 2000.
Office rents in the City of London increased by 4% to £62.50 per sq ft, in response to a 24% fall in supply.
In the Northern City district, which covers the tech-biased areas like Shoreditch and Clerkenwell, rents were up 5% to £52.50 per sq ft.
Rents in the prestigious Mayfair district increased by 10% to £107.50 per sq ft.

Dan Gaunt, a leasing partner at Knight Frank, said: “The office market has moved in favour of the landlord thanks to a large fall in supply. Demand levels remain strong going into 2015, particularly from the up-and-coming digital and creative industries. Consequently, I see rents rising this year by another 10% in the City, 9% in the Northern City, and 7% in Mayfair.”

James Roberts, chief economist at Knight Frank, said: “The growing influence of the technology sector on the London economy is borne out by the numbers. Digital and creative firms were the largest source of office demand in 2014, which is the fourth year in a row, as firms like Amazon, Google and Twitter expand in the capital.  This demonstrates that London is re-balancing away from its previous over-reliance on the financial services sector, and is growing as a global hub for digital innovation.”

Key investment market points:
Investment sales volume for 2014 was £19.4 bn, which is in line with 2013’s figure of £19.6 bn and well ahead of the ten year average figure of £13.1 bn.
75% of sales by value were to overseas investors.
Key deals included the Qatar Investment Authority buying the HSBC Tower for £1.2 bn, and Brazil’s Safra Group acquiring 30 St Mary Axe (a.k.a. the Gherkin) for £726 m.
Capital values rose in almost every district.

Nick Braybrook, an investment partner at Knight Frank, said: “To have seen sales in 2014 nearly match the record figure of 2013 speaks volumes about the underlying strength of demand. Investors are being drawn to London as the rental growth is coming through, and yields of 3.75% to 4.25%” for London offices look high when bond yields in Europe are below 1% for the leading nations. That is a big spread and I expect it to narrow in 2015 as London property values increase again.”

Stephen Clifton, partner and head of central London offices at Knight Frank concluded: “2014 was an impressive year for central London in both the leasing and investment markets. The capital has built up new industries since the financial crisis, particularly in new technology, which have taken offices in up-and-coming districts, like Shoreditch, Southbank, and King’s Cross. But their influence – in regards to innovation and ambition – can be felt across Central London as other sectors compete for space and talent.”

“As tenant demand has migrated into the new districts, the investors have followed, and values have increased – an office market equivalent of the ‘gentrification effect’ seen in the housing market. This year I see more investors looking at development sites, in order to take advantage of the 20% fall in supply that occurred in 2014 which is pushing up rents”.


The joint venture team of JF Finnegan and Sheffield Business Park, Broomco Limited, has completed £1.375m of land sales at Zone 6 within Sheffield Business Park to Tuffnells Parcels Express and JCT 600. Commercial Property Partners (CPP) and Knight Frank acted for the JV and the purchasers were unrepresented.

Tuffnells Parcels, whose HQ is in close proximity to the site, has bought 3.55 acres to develop a new parcel depot and JCT 600 has purchased a 0.10 acre plot to expand its existing operations at Zone 6 where its VW Gilders Van Centre is in operation.

Sheffield Business Park is one of Yorkshire’s largest business parks with over 200 acres of which circa 600,000 sq ft is already built and occupied by high profile occupiers such as Fujitsu Siemens, HSBC, South Yorkshire Police and Stanley UK with in excess of 900,000 sq ft of future development proposed.

Zone 6 is a 6 acre plot to the western end of the Park, just 2 minutes from J34 of the M1 and is already home to NHS Ambulance Fleet Management Service, VW Gilders Van Centre and DBL Logistics.  Following the sale a 1.98 acre roadside site is available for sale or new build opportunities.

Nick Gillott, Director at JF Finnegan, said; “This year has kicked off with a real sense of renewed optimism and vigour in the South Yorkshire property market and deals such as these certainly validate that. The land within Zone 6 met the right criteria for Tuffnells and JCT 600 and we are delighted to welcome them to the development.”

Roger Haworth, Partner at CPP, commented; “Occupiers are swiftly recognising the genuine shortage of available land in South Yorkshire in deliverable, quality sites in strong locations. This is creating a race for space and we are looking at a busy year ahead within the regional logistics sector.”

Sheffield Business Park Managing Director, Graham Sadler, says; “We are working hard to ensure that we create the right environment for business investment, whether for oven-ready sites or build to suit packages. The University of Sheffield’s commitment to building Factory 2050 on the park has stimulated significant interest from advanced manufacturing companies and their supply chains which further enhances the development’s profile.”


The Central Park trade counter development in Bridgend has announced two new tenants bringing the site to full occupation.

Pensord Press and Biotec Services International – a PCI company, are the latest companies to take unit space at the industrial park, which is located on Bridgend Industrial estate.

Landlord Robert Hitchins Group appointed commercial agents Herbert R Thomas (HRT) and Knight Frank as joint sales and lettings agents in January 2014.

The latest lettings brings the 22 trade counter unit estate, which extends to approximately 70,000 sq ft, to full occupation.

Operating from a 50,000 sq ft facility near Blackwood, Pensord Press will be creating a new digital printing depot within the 3,800 sq ft unit at Central Park to continue growing its printing business.

Having been a tenant at Central Park since 2007, Biotec Services International, a pharmaceutical services company, will be adding to its existing premises with a new 6,750 sq ft unit following increased demand and an expansion of its services.

Occupying a prominent position on Bridgend Industrial Estate, Central Park is positioned within close proximity to the M4 and is home to tenants including Edmundson Electrical, Plumbase and Cooke & Arkwright.

Furthermore, the former Kimball Electronics facility at the entrance to the estate is currently undergoing a major refurbishment, which will provide additional warehouse and office space to the market to satisfy current demand.

John Jones of HRT, said: “We’re delighted that we have been able to bring the Central Park Trade Counter development to full occupation. Due to its close proximity to the M4 motorway and Cardiff and Swansea, Central Park has appealed to a number of high profile companies.

“It has been an exciting development for us to market and we are now looking to develop more units to satisfy market growth.”

Mark Durand of Robert Hitchins Group, said: “We are extremely pleased with the success we have experienced with the Central Park development, which would not have been possible without HRT commercial and Knight Frank. We have worked with both agents on other developments and have always been impressed with their knowledge and contacts within the commercial market. Being at full occupancy is a great achievement in what has been a challenging market.

Neil Francis of Knight Frank adds “We are now experiencing high volumes of interest in Bridgend for trade counter, warehousing and office properties and we’re confident that we will be announcing further good news stories during 2015.”


The new owners of The Levels, Phase II Capital Business Park in Cardiff are already witnessing the benefits of the investment programme they are undertaking.

The Pears Group acquired the 22 industrial warehouse units totalling 120,000 sq ft last summer, attracted by its strong location and potential for increased rental incomes from proactive management.

Constructed in 2006, the Park is less than four miles from Cardiff city centre in an established commercial and industrial area with occupiers nearby including FedEx, National Grid, Everest Windows and B&Q. With Aldi’s proposed regional distribution unit on an adjoining site, and parcel delivery company DPD’s new depot nearby, the area has become a property hotspot in recent months.

Knight Frank and Alder King are the letting agents. Neil Francis, who heads the industrial agency team of Knight Frank in Cardiff, said: “The new landlord’s investment programme is already paying dividends.  New office space has been created in two of the units, a new yard is being created at J Block – and existing occupier A&S Manuel has taken additional space in the 3,500 sq ft H5 unit.”

Nicole Kruger of Alder King added: “With a real shortage of quality units in Cardiff, The Levels is a high quality multi-let industrial park in an increasingly attractive location. My client’s proactive approach to asset management includes improvements and refurbishments across the scheme which will help to attract a high calibre of occupier. With vacant units from 3,300 sq ft to 13,000 sq ft, The Levels has a strong story to tell.”

Ben Grossman of the Pears Group said: “This has been our first industrial purchase within South Wales and we are pleased that our actions have resulted in good levels of activity. With unit M1 under offer and terms being discussed on to others, the future of the Park looks positive.


Leading property consultancy Knight Frank has highlighted the shortage of quality Grade A office space as a key challenge for the Bristol office market during 2015.

It believes the shortage is an outcome of the “stellar year for Bristol” during 2014, with office take up breaking many records. More than one million sq ft of office space was let across the greater Bristol region in the year for the first time since 2008, with total office take-up reaching 1,266,535 sq ft.

Martin Booth, who heads the Knight Frank offices agency team in Bristol, said: “As a result of such strong take up, notably in Q4 2014, identified demand has reduced but remains at a very healthy level. With this bedrock of identified demand, together with inward investment and the rapid growth within the professional service and TMT sectors, we are quietly confident that city centre take up will exceed 600,000 sq ft in 2015.

Take up within the city centre of standing ‘new’ space was at its highest level for 15 years whilst 2014 saw the first pre-lettings during construction since 2009. This generated new prime headline rents which grew to a rumoured £28.50 per sq ft through the letting of 66 Queen Square to KPMG.

The availability of space, including space under construction, fell by over 40% during 2014 to approximately 1.15m sq ft and ‘Available’ space now under construction is limited to 98,250 sq ft.

Martin Booth added: “With available space under construction being so restricted, there will be a clear shortage of city centre grade A space later in 2015/2016. Given the extended timeline for delivering new product to the market, parties able to deliver refurbished product within shortened timeframes will benefit. Of course, the fact that several buildings appropriate for refurbishment have now been lost to alternative uses will further restrict supply.”

Turning to Bristol’s out of town markets, where take up for 2014 totalled 429,676 sq ft – the highest since 2001 and the third highest total in 25 years – he said: “The near absence of Grade A space in North Bristol must bring the need for speculative development into sharp focus.

“The constraining factor to date has been lease lengths rather than rents. We anticipate that evidence created within the next few months will underline the viability of such development. Given the tightening of supply in North Bristol, until further speculative space is brought to the market, alternative out-of-town areas will benefit from continued strong demand.”