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Knight Frank


Manufacturer Dycem has expanded its Bristol headquarters operation.

The company, which provides a range of clean room equipment and non-stick products, has leased an additional unit at Ashley Hill Trading Estate in St Paul’s, Bristol. Dycem already occupies two units on the estate and has now taken a five year lease on a further 3,400 sq ft of space in Unit 11 at a rental of £6 per sq ft.

The Bristol office of property consultancy Knight Frank represented landlord Avon and Capital Estates, together with joint agent Harris Lamb.

Russell Crofts, who head the Industrial team at Knight Frank in Bristol, said: “It’s great to be able to assist an indigenous business that is clearly having success to move on to the next stage in its development.”


The Capital Markets team at the Bristol office of commercial property consultants Knight Frank has acquired 66 Queen Square on behalf of Aviva Investors Property Trust for £32.7m.

The property comprises 61,497 sq ft of grade A office space, combining a new five-storey building integrated with a fully modernised and refurbished grade II listed Georgian terrace building. The building is developed and built by Skanska UK, with construction due to complete in October 2015.

The scheme is 90% pre-let and has achieved record headline rents for the city, reaching £28.50 per sq ft. KPMG has agreed a 15-year term and Handelsbanken has agreed a 10-year term, both without tenant breaks.

Nick Thurston, associate at Knight Frank, said: “We are very pleased to continue our relationship with Aviva Investors by securing this deal, which highlights the strength of the Bristol office market.

“Prime multi-let assets are in high demand from both UK and overseas investors, particularly those buildings located in major regional cities where Grade A supply is tight, there are good transport links and there is little anticipated landlord capital expenditure in the short to medium term.

“The lack of buying opportunities combined with the weight of money looking to invest in the regions has resulted in yield compression for ‘best in class’ assets across the UK.”

Knight Frank acted on behalf of Aviva Investors. JLL and Alder King acted on behalf of the vendor Skanska.


The AA is moving its Cardiff base to the city’s tallest office building, Capital Tower, from its current location on Penarth Road.

The company, which was recently voted the UK’s most trusted commercial brand, has acquired the recently-refurbished 15th, 16th and 17th floors of the 24-storey city centre tower, on a new 10 year lease.

Property agents Knight Frank and Fletcher Morgan advise landlords Topland on new lettings in Capital Tower with Bilfinger GVA advising the ingoing tenant. Mark Sutton, partner at Knight Frank, said: “In taking 15,720 sq ft of open-plan offices on these upper floors the AA will benefit from high quality refurbished accommodation with fantastic views of the city and beyond.

“The owner’s investment in comprehensive refurbishment of these offices, along with lift replacement and a planned extension of the reception, has paid dividends with the arrival of such a blue-chip tenant.”

John James at Fletcher Morgan said: “Capital Tower is the only true office tower in the City of Cardiff and offers quality office accommodation with flexible floor plates, making it an attractive proposition for occupiers.  We have seen a notable upsurge in enquiries since the building was acquired by Topland.”

Tom Merrifield Head of Agency at the Cardiff Office of Bilfinger GVA said: “The relocation by the AA of its Cardiff team reinforces their commitment to retaining a high level of employment within the city and the acquisition of the space within Capital Tower followed an extensive assessment of their current commitments in Cardiff.  Capital Tower offers a positive working environment for staff with unrivalled views across Cardiff in a location easily accessible to public transport and into the retail core of the City.”

Capital Tower sits within Cardiff’s core office and leisure district, next to the Hilton Hotel and close to the Millennium Stadium, Cardiff University and St David’s Shopping Centre. The position in the heart of the city centre continues to prove popular with occupiers.

There are opportunities for office occupiers available from 2,500 sq ft to 22,000 sq ft.


According to the Spotlight on Retail report by the real estate consultancy Knight Frank, during the coming 18 months, more than €3,000 million of retail assets are expected to come on to the market.

While 2014 and what we have seen so far of 2015 has been all about large prime shopping centre deals, the upcoming months will see more smaller core plus and value add investment opportunities in secondary cities.

Shopping centre investment volume tripled in the first few months of 2015, compared with the same period the year before.  In Q1 2015, €520 million was invested, compared with €150 million in the same period the year before.

With various deals on the verge of being completed, we expect the first half to close out with more than €1,000 million invested.

According to Elaine Beachill, Retail Investment Associate at Knight Frank,  “investment volume will continue to be above the historic average and the outlook for 2015 is fewer large deals, although a greater percentage of investment opportunities”.

In terms of the type of investor, SOCIMIs and fund managers are the most active players, accounting for 46% and 40% of market share respectively. In terms of nationality, 22% of investors are Spanish, while 78% are international, mainly Dutch, English and American.

The main retail indicators suggest that the retail sector is now in recovery. Footfall figures started to see an upturn in 2013 and continue to trend upwards. The Consumer Confidence Index is above 100 points, a record high after the crisis and sales are starting to recover in almost all segments.

For Félix Chamizo, Partner and Retail Director at Knight Frank, “all of these positive figures appear to suggest that we will see rents rise in the short to medium term”.

In terms of shopping centre performance, small shopping centres (convenience shopping centres) that are located in urban areas or secondary cities with a large catchment area, are performing very well.

The least affected segment by the crisis was the prime High Street. Retail units on the main high streets have seen rents remain stable and have very low levels of vacancy. “In fact, there is a major shortage of prime High Street space and when a unit comes to market, it is quickly snapped up”, indicated Félix Chamizo.

However, consolidated secondary locations – which were less sought after in the past – have been the go to option for many overseas brands for their first stores in Spain. As was the case with Hema, Dealz, Tiger and the Chinese operators Mulaya and Okeysi.

We would also note growing operator and investor interest in the Puerta del Sol area. Projects in close proximity, such as Canalejas, suggest that there will be an increase in retail unit rents in the area and certain operators are already taking up positions there.


Two more units have been let at the popular Liberty Industrial Estate in South Liberty Lane, Bristol.

The Axis Trampoline Club has leased the 13,135 sq ft Unit 14 on a 10 year lease rising to £45,972. Axis is Bristol’s biggest trampoline club but was made homeless in August 2014 when Redwood Hotel closed.

The Liberty Industrial Estate unit gives the club its own dedicated centre and has enabled it to expand its services to run classes in gymnastic disciplines including Trampolining, General Gymnastics, Double Mini Trampoline, Pre-School and Gymfit.

In a separate deal, event advertising company Instant Promotion has taken a 10 year lease on the 11,199 sq ft Unit 7 at an annual rental of £44,236.

In both transactions, landlord CBRE Global Investors was represented by property consultants Russell Property Consultants Ltd and Knight Frank.

Russell Crofts, who heads the Industrial team at Knight Frank in Bristol, said: “The refurbished industrial units at Liberty Industry Estate are attractive to a wide range of occupiers.”

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


Joint agents Knight Frank and JLL have completed two new letting at the Gordano 19 business park on behalf of landlord Legal & General Property.

Vending services company Selecta UK have taken a five year lease on the 3,925 sq ft Unit 9 at an annual rental of £23,550, while Vehicle Preparation Services Ltd have leased 5,875 sq ft at Unit 14 on a five year lease at £25,250 per annum.

Russell Crofts, who head the Industrial team at Knight Frank in Bristol, said: “This success reflects the investment made by the landlord in refurbishing the building.  City-wide figures have indicated a reduction in supply and this investment has been rewarded with new strong rental levels.”


Sunday Trading Reform: overdue but not a game changer

The worst kept secret is now out.  As widely predicted, the Chancellor has confirmed in his Budget that Sunday trading laws are to be relaxed. Rather than go the whole full nine yards and lift all restrictions centrally, decision-making will be devolved to local authorities and mayors.

What does the potential relaxation of the laws mean in practice? It would mean that current restrictions, whereby shops over 3,000 sq ft can only trade for a maximum of six hours on a Sunday, are lifted, bringing the Sabbath in line with the other six days of the week.

Is this a massive game changer? Not really – certainly not on the scale of the last reforms that were put in place 20 years ago under the then-controversial Sunday Trading Act. Inconceivable as it may seem now, particularly to the Millennial Generation, 20 years ago barely any shops at all were able to trade on a Sunday. High streets, shopping centres and retail parks were oases of calm on Sunday – or, depressing, no-go lands depending on your point of view. The Sunday Trading Act changed all that, albeit with some concessions.

Will retailers embrace it? Yes – most of the leading multiples will see this as an opportunity to open their stores for longer. Trade publication Retail Week has canvassed opinion from a number of leading senior retailing figures, including M&S, Waitrose, Next, Morrison’s and Asda, and all confirmed that they would take advantage of any relaxation. At the same time, none were particularly gushing as to what a great opportunity this would represent. Their relative indifference speaks volumes.

Will relaxing the laws further provide a major fillip to overall retail sales? Will there be substantial economic benefits? Probably not. There is limited empirical evidence to suggest that liberalising store hours drives incremental growth to retail sales. The same level of spend is merely dissipated over a wider/longer trading period. But this misses the point. Extending Sunday opening hours gives consumers what they crave and value most – convenience and greater choice. ‘Browsing periods’ on a Sunday morning, when customers can walk stores but not buy anything, are farcical in this day and age, as is the last minute dash to catch a store that closes its doors abruptly at 4.00 pm. You can shop online at any time on a Sunday, why not too in store?

Who stands to lose out? Obviously, religious groups will oppose the change, but even accepting their sensitivities, surely the horse has already bolted? It may, however, be a blow to the large portions of the independent sector, who are currently immune to trading restrictions on a Sunday. In effect, by levelling the playing field, they will see one of their competitive advantages wiped out.

As ever in retail, the consumer is the final arbiter. Trade restrictions on a Sunday are hardly conducive to today’s ‘anytime, anywhere’ consumer and in this regard, their relaxation is long overdue.

Stephen Springham, Head of Knight Frank Retail Research

“On their own, the changes to the non-dom tax rules will not have a profound impact on the prime London market as demand is driven by a number of factors, and non-doms form only a part of demand.
“These reforms follow a series of changes in recent years that make it increasingly difficult to argue prime residential property is under-taxed. The relatively subdued nature of the prime London market since December’s stamp duty changes highlights the risk of higher taxation on market demand and also government revenues.”

Liam Bailey, Global Head of Research at Knight Frank

“Property trends over the last few decades have led to an amassing of housing wealth among older people. Increasing the Inheritance Tax (IHT) allowance will mean that more of this wealth flows back down the generations rather than into the Treasury coffers. It will give more people the chance to amass a deposit for a new home or make a step up the housing ladder.

“Making an allowance to protect downsizers is welcome. It means those living in large houses do not have to continue to do so in order to benefit from the IHT changes. This, in time, could help release more large homes back into the market.

“However, the tapering of the IHT bands upwards over the coming years mean that some may be tempted to sit tight in their home until they can downsize and retain the maximum housing IHT allowance, creating short-term stickiness in this market.

“The next step for policymakers will be to focus on is delivering housing suitable for downsizers – properties in the right location and with the right specifications for older residents.”

“This is a significant change in tax status for those with a rental portfolio, although the measured rate of introduction between 2017 and 2020 will help landlords plan their approach.

“Those planning to purchase a buy-to-let property will have to factor these new rules into their calculations, and this could affect the offers they are willing to make.

“If the relatively low yield environment seen today, especially in the South of England, is still evident when these changes start to come into force, there could be upward pressure on rents.

“The need for rental accommodation is strong, and we expect this trend to continue, especially in city centre markets around the UK.”

Gráinne Gilmore, Head of UK Residential Research at Knight Frank


The Knight Frank Capital Markets team in Bristol has acquired 43 Queen Square on behalf of CBRE Global Investors for £4.9 million.

The four storey office building, totalling 25,041 sq ft, is let to Lyons Davidson Limited on a new 20 year lease at a rent of £15.00 per sq ft.

The transaction represented a net initial yield of 6.32% and a capital value of £195 per sq ft.

Nick Thurston, associate at Knight Frank, said: “There is currently a significant amount of development activity within Queen Square and its vicinity which will assist in ensuring it remains one of the prime office locations in the city going forward. The Square has strong prospects for rental growth as confidence in the occupier market continues to improve.”

Knight Frank acted on behalf of CBRE Global Investors. Alder King acted on behalf of Oriel House Investments.


Q2 saw £1.3BN of investment transactions in the South East, the largest quarter ever, with the exception of Q4 2013, which saw the sale of Chiswick Park. This is a 135% increase on the previous quarter, and 154% above the 10 year average.

The quarter was characterised by a number of particularly large lot sizes, with the largest four transactions totalling £586M, or 45% of turnover, with investors focussing on larger, deliverable lot sizes in core markets. Major transactions include M&G’s acquisition of Bedfont Lakes for £167M, and L&G’s acquisitions of Apex Plaza in Reading (circa £90M) and The Compass Portfolio for £135M.

UK Institutions continue to account for the majority of acquisitions, but increasing levels of US equity is looking to buy into ‘value add’ opportunities, with rental growth being factored in to most acquisitions.

The substantial weight of money seeking South East office stock continues to put pricing under pressure. Yields for prime 15 year income stand at 5.00%, while strong interest in prime five-year income has seen yields harden to 5.50% NIY. We expect yields across the board to continue to harden for the remainder of the year, as investor demand for South East offices continues to significantly outweigh available product.

Tim Smither, Partner, National Offices Capital Markets team, Knight Frank, commented; ‘After a relatively quiet first quarter, we have seen an increase in volumes being marketed in the South East, almost all of which has been very well received in the market, as the expectation of rental growth really begins to take off. We expect the market to continue to stay buoyant for the remainder of the year, as investor demand significantly outstrips supply, both at the prime and secondary ends of the market’.

Neil Francis, associate at Knight Frank

The latest Logistics and Industrial Research from the Cardiff office of Knight Frank shows that the market for units of over 50,000 sq ft continues to be as active as witnessed last year. In the first half of 2015 there were eight recorded transactions for such space with approximately 800,000 sq ft either let or sold.

Neil Francis, associate at Knight Frank comments: “The level of take up for the first half of the year was similar to that recorded for the second half of 2014 and as per recent trends there was an equal split between leasehold and freehold transactions.”

He adds: “Two of the larger leasehold transactions were secured by Associated British Ports, which attracted Travis Perkins to 81,000 sq ft at Cardiff Docks, and Speedy Hire to 170,000 sq ft at Newport Docks. These transactions highlight that the specialist Port Operator has the land availability and infrastructure in place to become a significant regional landlord in the ‘big shed’ market.

“Purchases in the Heads of the Valleys region by Cwmtillery Glass (54,000 sq ft at Festival Drive, Ebbw Vale) and Gerry Jones Transport (105,000 sq ft at Tafarnaubach Industrial Estate, Tredegar) shows continued growing confidence within the area. It is pleasing to see both these local companies expanding their operations into these factories.”

The Knight Frank research also highlights that for units above 50,000 sq ft there remains approximately 5.5 million sq ft available in Wales with Grade A space still accounting for less than 10 per cent.

Neil Francis continued: “With 220,000 sq ft of Grade A space rumoured to be under offer at Imperial Park in Newport, this figure is going to diminish even further in H2 2015 which will limit the good quality options for occupiers in the market. On a positive note though, St Modwen has started construction on its speculative development of a detached warehouse at Celtic Business Park, Llanwern which is close to Junction 23a of the M4 Motorway. Measuring 50,000 sq ft it is due for completion by the end of the year and is the first build of its type for a number of years.”

In terms of the outlook for the remainder of the 2015 Neil remains confident that market activity will continue to improve and finishes: “As we head towards the summer period there are a number of units over 100,000 sq ft that are under offer and due to complete shortly. I fully expect that take up for units of 50,000 sq ft plus will pass 2 million sq ft by the end of the year.

“With a number of requirements still outstanding those that cannot identify suitable opportunities may need to consider new build options which can only assist in given confidence for the much needed speculative development the market requires.”