2 minutes to read
A Look Back
Reading demonstrates its resilience and position as the heart of the Thames Valley office market. Take-up in 2022 was 304,500 sq ft, 32% down on the 5-year average. Although take-up was down, the improving market sentiment and viewing activity with larger corporates provide optimism for 2023.
The fitted suite revolution has hit Reading town centre. Occupiers are increasingly wary of relocation costs and up-front capital expenditure when undertaking fit-out on progressively flexible terms. Last year, 64% of transactions in the town centre were on a fitted basis, a trend we expect to continue as we progress through 2023. Buildings such as Apex and Phoenix have benefitted from adapting their offering to cater for this demand.
Landlords in Reading have started to set new benchmarks across the Thames Valley for the quality of office space alongside ESG credentials. Developments such as Here (Thames Valley Park), Campus, and 400 Longwater Avenue (Green Park) have reinvented what best-in-class office space looks like.
A Look Forward
Station Hill certainly is the project that is the talk of the town. Whilst the scheme is 12 months out from practical completion, the positive impact it will have on the public realm adjoining the station and the reorientation of the town centre is significant. Rental tones are expected to be in the late £40s, early £50s for the scheme.
75% of transactions in the South East last year were deals under 10,000 sq ft, the highest percentage in the previous 20 years. However, Reading is bucking this trend with many 50,000 sq ft requirements actively viewing and negotiating in the market.
The TMT and FBS sectors have always been the most prevalent in Reading, which is expected to continue. 42% of lease events in the next three years are for TMT occupiers, with 29% residing in the FBS sector. These sectors equate to 71% of the lease events and are expected to dominate the anticipated demand in the market.