Milton Keynes property market is ‘firing on all cylinders’

The commercial property market in Milton Keynes is firing on all cylinders, with high quality transactions taking place in the first quarter of 2015, according to leading property consultancy Kirkby Diamond.

Luke Tillison, head of agency at Kirkby Diamond, which has offices in Luton, Bedford and Milton Keynes, said the town’s growing reputation for start-up businesses and strong job creation, and forward thinking was a key driver for global giants that are keen to stay in the town. At the same time, new businesses are flocking there.

Milton Keynes has already seen further commitment from Newport Pagnall-based prestige car maker Aston Martin, which expanded its operations with a new lease at 40 High Park Drive – a 25,000 sq ft high bay Industrial unit in Wolverton Mill East, Milton Keynes in January 2015.

Kirkby Diamond with Joint agents Bidwells completed a major deal when it negotiated with Coca-Cola to take a new lease at Blakelands House, agreeing a ten-year term at the 76,941 sq ft industrial site.

The strong start to 2015 follows the consultancy’s success at the end of 2014, when it brought Sansetu UK Ltd, one Europe’s biggest extruders of polyethylene bubble film, to Pacific House, a 64,503 sq ft industrial unit, after the company sought new and larger premises in the town.

“Keeping these major names in Milton Keynes is a real bonus for the area because it demonstrates confidence in the expertise that there is here, and also shows that it offers superb value for money,” says Tillison.

“With market confidence returning, Milton Keynes is firing on all cylinders and continues to attract new names as businesses see the area’s potential for growth and appreciate the excellent transport networks.”

These major lettings mean that stock continues to fall across Milton Keynes, with no Grade A industrial stock left and very little Grade B available.

Even the historically oversupplied secondary multi-let sector has seen a vast drop in vacancies, with many industrial estates now having almost 100% occupancy.

Availability sits at about 5.5%, and when removing poor quality stock from this figure availability falls below 4%, which is the lowest seen in over 10 years, says Tillison.

An intensive asset management campaign by Kirkby Diamond and Hornbeam CPAM Ltd saw it complete a number of key industrial deals on the Clarke Road Industrial Estate, Mount Farm, Milton Keynes.

The estate, which comprises 28 units, had seven voids six months ago. However, the consultancy secured five lettings in as many months, the majority of which were to businesses that wanted to relocate to the town.

The strong headline rent that was achieved in turn helped Kirkby Diamond to negotiate excellent terms for a number of lease renewals that also took place at the same time.

This has enabled the consultancy to push the estate estimated rental value (ERV) up by a further £0.50 sq ft.

“The market is extremely buoyant and the lack of good quality industrial stock here means that the town is ready to commit to design and build projects and even some speculative developments,” says Tillison.

“We are confident that there will be some significant announcements around this very soon.”

The office market looks equally challenging in Milton Keynes and surrounding areas, with very little Grade A offices available and overall availability reduced to under one million sq ft.

“This is the first time in years that this has happened,” says Luke. “Despite tougher market conditions, office availability, like the industrial market, is also depleted.

“It means the tide has finally turned for the landlords who have experienced many years of pain. The biggest winners will be the owners that have modern units, as the lack of availability of suitable space means that rents will continue to increase.”