With political dialogue in France, the attempted assassination in The States, combined with the economic growth agenda of the new UK Administration, the £ has bounced slightly, reflecting confidence in UK stability. Whilst interesting at a macro level, local regional market activity is our primary indicator. In our case this feeds entirely into our expertise within the commercial property sector, expanded upon below.

The office sector has proven fickle post Covid, with businesses tussling the issue of working from home culture versus, in the office productivity. Add to this the progression of AI. So the office environment continues to be challenged with senior management’s continuous reference back to the collaboration, mentoring and team productivity of the pre- Covid era. The answer to this seismic shift  – as the majority of businesses seek workforce return for at least 3 days of the traditional 5 day working day week – a flight to quality attractive workspace environments across the board.

As advisers, Christopher Thomas have direct experience of this transition, for an increasing number of international office clients – Norgine Ltd for example, for whom we spearheaded the acquisition of new space earlier this month at ARC Uxbridge 23,871 sq.ft. state of the art offices, with excellent parking (to include EV charge points) a shared business park environment on a quality campus. Similarly for client Terumo, moving from Bagshot to The Meadows Camberley office campus.

On the landlord letting and sales side the14,000 sq.ft. quality Royal Albert House Windsor is now 100% occupied again, Porthaven having taken the last available space, and the majority of the top floor at Riverside House Windsor is also under offer. Having just sold Windsor Park House to a Brentford occupier moving out of town to a home counties vibe next to the airport M25 and easy Elizabeth Line access, we have also just brought the neighbouring Kingsbury House freehold to the market plus two adjoining 3,000 sq.ft. offices with a lot of parking at 17-21 Victoria Street Windsor “the Cottages and The Keep” Closer back into London, at Staines we have also just re-let the 6,000 sq.ft. Old Station and agreed a letting of smaller space at Church House Church Street Staines for another longstanding private client.

The office sector is moving in the right direction with take up countering residential conversion and as an observation – due to the swathes of conversions – limited quality stock.

The industrial warehouse sector boomed as a result of the Covid lockdown with online logistics / deliveries driving West London demand for warehouse space to new levels – commensurately new levels of rents with some headlining in the £20’s per sq.ft to early £30’s per sq.ft. have proven difficult for our occupier clients not aligned to the core warehouse market. Acting for some of our landlord clients softer rent agreements have been reached, to retain rather than scare longstanding relationships away. For older style good quality space, headline rents in the mid £teens per sq.ft. have been common.

As a result Christopher Thomas have no stock left in Windsor with The Fairacres Estate now fully let for our client Petchey Holdings. We are achieving great results too for Table Property at Boyn Valley Estate Maidenhead where 15,250 sq.ft. has just let to Thames Valley Hospice, 2,500 sq.ft. to Exceed Electrical and 4,500 sq.ft. to Paragon. Limited stock with just three units is available now, from 4,500 sq.ft to 12,000 sq.ft and good interest being shown. Lettings are generally taking place on completion of building refurbishments. Rents once again mid £teens per sq.ft. Good values for occupiers wanting to be next to Maidenhead town centre / The Elizabeth Line.

With a step change in rental returns, landlord clients have been refurbishing industrial warehouse units and agreeing rents around the £15.00 per sq.ft mark, on the whole to grateful tenants – bringing greater tenant affordability, with the prospect of rental growth at the usual 5^th anniversary rent review pattern. To add to this, from an investment valuation view point, these rental levels make valuations easier to apply stronger yields.

The industrial warehouse market is inverted, outpacing rents for the historically higher office market, once the Adonis of the Thames Valley commercial property sector. Such is the nature of the current market cycle.

The retail sector benefits greatly from the Government’s retail and hospitality 75% rates relief scheme, also the 2020 Use Classes order relaxation. In addition the working from home trend has fed neighbourhood parade trades (coffee shops, bakeries, food and beverage destination uses).

With no consultation surrounding relaxation of the planning laws plus case laws supportive of former sui generis uses, the take up of vacant shops has no strategy. For example, in Peascod Street Windsor, four ice cream shops opened in as many months – Christopher Thomas let two of them (the first and second).The first has since shut. We are and have always been wary of the financial status of prospective tenants. Interesting to see the Home Secretary targeting certain lower level sub-sectors – parts of the beauty sector and car washes potentially exploiting illegal working in the UK.

A recent town planning appeal APP/R5510/X/22/3290784 confirmed by the planning inspectorate that a former restaurant could become for example, a tanning salon. This was due to the new wording in Use Class E that says ‘any other services which it is appropriate to provide in a commercial, business or service locality’

Whilst good for take up in the short term, longer term market  sustainability is subject entirely to market forces – not ideal in a market saturated by a noticeable number of entrants in similar trades.

Fortunately, with our breadth of market base Christopher Thomas are able to target the more traditional higher end retail sector. We have for example recently agreed terms for the letting of a town centre shop to a Hatton Garden jeweller, also a former estate agency opposite Daniel Department Store Windsor, to The Grape Tree, multiple retail wholefoods vendor.

Many neighbourhood parades are fully occupied, so our achievements here are primarily rent review and lease renewal related. In the past few weeks we have for example completed a new lease at Hetpole Pharmacy, also the Thames Valley Hospice shop in Dedworth Road – we’ve also agreed a pre-let of Ruddy Developments soon to be completed 4,000 sq.ft ground floor showroom at 61-63 Dedworth Road Windsor, more affectionately known as the Mahjacks site locally.

With regard to the general market, given recent summer retail trading results (down partly weather, partly general election related) The Bank of England is more likely to be persuaded to reduce interest rates.

The financial markets were predicting an interest rates cut in September although the Bank of England surprised the market slightly with the first cut 1st August. This is combined with an undercurrent of caution, as inflation remains on target although stubborn.

Easing rates will help buoy market caution with greater optimism which should in turn feed continued healthy activity across all sectors as we move into the final year calendar quarter.

Christopher Thomas are quoted by the RICS in the recently July published UK Commercial Property Monitor Chartered Surveyor Comments as follows:

“The market is exercising caution, unsurprisingly in light of a general election. Activity though remains reasonable – landlords, owner occupiers and tenants appear to be more resilient than previous economic cycles, recognising in particular new and evolving market opportunities”

For a pulse on where the market is and for expert advice do please feel free to contact us. The above is a short snapshot of just some activity. As new markets evolve, we also act for clients in the data centre markets and community use related property too.

Christopher Thomas Assoc RICS and RICS Expert Witness Surveyor