South Coast Metropole South Coast Metropole - King Sturge

South Coast Metropole
2008

King Sturge: South Coast Metrolpole 2008
Contents
Introduction 2
The economy 3
Overview 3
Recession, depression or neither? 3
Government policy 4
Inflation 4
The occupier market 5
Empty rates 5
Energy Performance Certificates 6
Trains, planes and automobiles 7
Principle market sectors 9
Industrial market review 9
Office market review 15
Retail and leisure market review 21
Residential market review 22
Main commercial sectors 29
Southampton and Eastleigh 29
Portsmouth and Gosport 38
Bournemouth and Poole 42
Other commercial sectors 45
Fareham 45
Winchester 46
Salisbury 48
Havant and Waterlooville 50
Isle of Wight 51
Weymouth 53
Photographs by Joe Low and King Sturge
Front cover : Queen Victoria maiden voyage
Inside front cover : Royal Naval Dock, Portsmouth
Inside back cover: Collins House, Swaythling Housing Association, Eastleigh
Upper margin: Portsmouth Historic Dockyard gates
1

King Sturge: South Coast Metrolpole 2008
Introduction
A warm welcome to the 14th edition of our
annual South Coast Metropole Report, which we
publish at a time of great uncertainty in the world
economy, and also at a time of great opportunity.
We attempt to analyse the current situation with
a cool head, sensibly avoiding the scare-mongering
and hyperbole in the press, to determine what all
this really means for the property industry in 2008.
Although the capital markets remain cool, albeit
active, the occupier market in the Metropole region
has remained buoyant across all sectors, with the
office market leading the way against a background
of poor supply of good quality stock. We expect
to see this continue over the next 12 months and
beyond, together with increased activity in the
capital markets and a recovery in the underlying
value of commercial investment stock. The sector
has been hit hard over the last three quarters and
an over-correction in values has been an inevitable
consequence. The trick is to get back into the
market quickly focusing on bargain quality stock,
and there are plenty of examples of this happening,
particularly in the retail sector.
Our report is set out in three main sections: first an
assessment of the global and national issues that
will affect the Metropole economy over the next 12
months: secondly an assessment of the principal
market sectors, and finally an analysis of the submarkets
within each of the towns and cities in the
Metropole area. We have, as always, also reported
on all the key transactions across the region over
the last 12 months, and taken a careful look forward
to the likely levels of activity across the sector in
2008/09.
So, the long bull run is finally over and the press is
full of stories of bank runs, credit-crunches, stock
market crashes and falling house prices. Certainly
two banks have failed and it is true that the value
of property shares has plummeted. But curiously
the world is still turning. Occupiers still need space,
unemployment levels are low, interest levels are
low, inflation is in check, there is no over-supply
of stock as in 1991 and the world is awash with
money looking for a return. The only thing to fear is
fear itself, and there is plenty of that around at the
moment.
The Metropole region reflects the realities of the
current market conditions perfectly. We have seen a
good take-up of space across all sectors, with some
impressive office deals leading the way. Ordnance
Survey have received planning permission for their
new world headquarters at Adanac Park. Carnival,
the owners of P&O Cruises are building out their
new offices in Southampton and in Portsmouth
Highcross have re-launched over 25,000 m² of
refurbished office space in part of the former IBM
headquarters.
If further proof were needed, the retail sector is
also facing up to increasing demand across the
region with a series of new initiatives. The longawaited
redevelopment of the Tricorn Centre in
Portsmouth is now inevitable following a decision
by John Lewis Partnership and Marks and Spencer
to anchor the scheme. IKEA are opening a new
store in Southampton, and even the luckless Swan
Centre in Eastleigh is undergoing a make-over.
Regeneration projects across the region are injecting
a significant boost to the waterfront. SEEDA’s
regeneration of East Cowes has received a major
boost with the appointment of Waitrose as the
main occupier, and further projects will follow on
the former VT Shipyard in Woolston and the former
RAF Hythe base to the west of Southampton.
The residential sector has seen a lot of activity over
the last 12 months and although the mortgage
market is tighter than it has been for several years,
there is still a structural under-supply of stock
across the region. Barratt are building out 550 units
in Whippingham, there are 500 units consented in
East Cowes, 200 units planned for the Mayflower
Plaza in Southampton and 300 units completed in
Telephone House and the French Quarter. Lower
interest rates should keep the market ticking over in
2008/09, but with some erosion in value inevitable
over the next 12 months.
Michael Green
Partner
2

The economy
Overview
Although this is a very difficult time for the UK and
global economy, it is not a disaster, far from it. After
a period of unprecedented growth the credit crunch
has taken everyone by surprise, and the markets
have reacted predictably. But there is too much
money in the world looking for a home for this
correction to last very long.
The main issue facing the global economy in 2008
is confidence. A sustained period of volatility
is beginning to make even the most optimistic
investor nervous, and it is all down to one issue. If
you divorce risk from responsibility then sooner or
later the train will leave the track.
As the mist lifts, it seems quite extraordinary that
the collateral debt obligations sold to investors as
mortgage-backed securities were built on such
secrecy, confusion and lack of credible financial risk
assessment. The question now being asked is how
these asset-backed vehicles were sold to pension
funds and sovereign wealth funds across the world
without revealing (or investigating) who pays the
interest charge on the security.
As we now know, significant sums were being
generated from “sub-prime” mortgages in the
United States. When the interest payments on
these mortgages started to falter, so did the banks’
ability to pay interest on the securities sold months,
even years, earlier. By placing the securities “off
balance sheet” the banks lost track of exactly how
much and to whom they owed money.
The Solent
In retrospect, the credit crunch disasters that have
occurred at Northern Rock and Bear Stearns were
accidents waiting to happen. No-one appears to
have asked this fundamental question. Where does
the interest come from upon which the asset’s
capital value is based? To date the banks, credit
rating agencies, regulatory bodies, central banks
and actuaries have all failed to adequately address
this issue.
Recession, depression or neither?
So, is this major asset price correction likely to
lead to a recession or even a depression in the
UK? Depending on how you read the figures (a
recession is normally defined as two consecutive
quarters during which economic growth is slower
than the previous quarter), the USA may have been
in recession or close to it from October 2007. The
unlikely Armageddon scenario is that the global
debt problem is so bad that no single bank or a
combination of central banks or government(s) can
underwrite the debt default and the global financial
structure collapses like a pack of cards. Then we
could face a major recession.
One week in mid-March 2008 summed up the
current problems: one day the US Central Reserve
Board pushed out $2 billion into the market to
create liquidity and agreed to take back mortgagedbacked
securities as collateral. By the end of that
same week it had underwritten the rescue by JP
Morgan Chase of Bear Stearns, the second-ranked
US investment bank – one of the largest finance
houses in the Western World. These are big
economic issues and they tend to spook nervous
markets.
But we need to put all this into perspective. In many
ways the current problems are not nearly as bad as
in the 1970s when there was a systemic collapse
of secondary banks, and property markets across
the Western World, resulting from the trebling of oil
prices. In those days the Bank of England became
the “lifeboat” of the property industry. Another
parallel might be the collapse of the dot.com bubble
in 2000. This was also a very nasty time for the UK
and the global economy, but it was not catastrophic.
As Alan Greenspan, the retired Federal Reserve
Board banker, has famously said, such major
3

King Sturge: South Coast Metrolpole 2008
volatility is simply “creative destruction”; out of the
ashes arise new opportunities, and that is where
the property market stands today.
The world remains awash with savings seeking
an investment home. A diversified portfolio using
cash, gilt-edged securities and equities also needs
property to outperform markets in the long term.
In the short term all assets, including equities and
property, have to be priced correctly, but in the long
term the markets will recover, and property will play
a central part.
Government policy
What we know now is that the golden years of
the Blair-Brown Government spending and growth
boom are over. The days of the “Goldilocks
economy” – when the porridge was neither too
hot nor too cold – are gone. In those days we had
relatively low inflation, relatively low interest rates,
but above-average economic growth. We are now
staring at the prospect of mild “stagflation” which
will persist throughout 2008 and into 2009. In this
scenario there will be lower growth, higher inflation
and higher interest rates.
UK economic growth versus manufacturing and services
% (Gross value added pa)
% pa
6
5
4
3
2
1
0
-1
-2
-3
-4
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Total output Manufacturing Services
Source: Experian Business Strategies Feb 2008
Forecasts
The UK Government’s “golden rule“ is clearly no
longer applicable – when it balanced expenditure
against receipts over a full economic cycle. As the
Budget in March 2008 revealed, the Government
estimated that it will have to borrow £43 billion
this next year, which is nudging towards 3% of
economic output. Currently the Budget balance, tax
receipts versus expenditure, has already exceeded
3% of GDP, one of the worst records of any
mature economy in the Western World. To make
6
5
4
3
2
1
0
-1
-2
-3
-4
matters worse, the current account balance (we are
importing too many goods and exporting too little)
now stands at -3.8% of GDP, a figure only exceeded
by the USA and Spain amongst North American and
EU economies. In other words, the UK economy
is in some difficulty, at a time when inflation is on
the rise.
Inflation
As at mid-March 2008, global food prices were
up 71.3% on a year earlier, and World oil prices
were up 97.4% on a year earlier, according to The
Economist.
IPD rental vale growth
ERV growth
10
5
0
-5
-10
Jan
00
Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul
00 01 01 02 02 03 03 04 04 05 05 06 06 07 07
All property Retail Office Industrial
Source: IPD Monthly Index as of April 2008
Jan
08
10
5
0
-5
-10
Across the world, both developed and developing,
inflation is now a major challenge. In China,
consumer prices have increased by 8.7% for the
first quarter of 2008, and they were up by 5.5% in
India. Both the old-fashioned Retail Price Index at
4.3% and the new international Consumer Price
Index at 2.2% are out of line, but the opportunities
to reduce banking interest rates are very limited.
While there is an expectation that the Bank of
England may reduce interest rates by a further
25 bases points (0.25%) during 2008, the days of
returning to an interest rate of 4% or perhaps lower
are very unlikely to return.
So, against this background, what is the outlook
for property? One of the products of the liberalised
economy which has developed over the last 20 to
30 years is much faster economic growth across
the world, but far more volatility in the world’s stock
markets. There have been anywhere between
seven and ten major stock market corrections
since the 1970s, while, in the same time period,
4

UK property has produced a negative return on only
three occasions: 1974, 1991 and 2007.
IPD total returns
Total return % pa
25
25
20
15
10
5
0
-5
-10
-15
Jan
00
Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul
00 01 01 02 02 03 03 04 04 05 05 06 06 07 07
All property Retail Office Industrial
Source: IPD Monthly Index as of April 2008
Jan
08
20
15
10
5
0
-5
-10
-15
The outlook for UK property in early 2008 suggests
that it will not be a U shaped curve as in 1991-94, but
more of a V shape. In other words, by the middle of
2008, the major price correction will hopefully have
ceased, and capital values will begin to rise modestly
by the back end of the year. The simple truth is that,
the quicker capital values fall, the faster the market
will return to normal. The extraordinary collapse of
the capital values since mid-2007 indicates that the
market may stabilise faster than some predicted at
the beginning of 2008. In other words, if we all hold
on to our seats and keep our nerve, we will be on
the way out of this by the end of 2008.
The occupier market
The curious thing about the current financial crisis
is that occupier demand remains quite strong.
While the banks address their problems the world
continues to spin quite nicely, suggesting that the
underlying economy is actually very sound.
At the moment, economic growth in 2008 looks
set to continue at the range of 1.5% to 2% per
annum, having stormed ahead at more than 3%
in 2007. Economic growth is good for property
markets. While people are earning a living, and are
in employment, they will need to occupy buildings.
The current situation is also, with some irony, quite
good news for the property market overall. The
lack of access to easy finance means that standing
investments are more likely to retain their value as
it will significantly reduce the supply of new stock
coming to the market.
Empty rates
The decision by the Government to abolish
unlimited rate relief on empty buildings will come
as a cruel blow to many landlords, particularly if
market conditions begin to deteriorate further. From
1 April 2008 full rates will be payable in England
and Wales on all empty commercial premises
once initial exemption periods have expired. The
exemption is three months for office and retail
premises and six months for industrial premises.
After then, full business rates are payable. Currently
office and retail premises are subject to 50% rates
after the exemption period, with no rates payable
on industrial and warehouse premises. If a building
has been empty for three or six months (depending
on the type) on 1 April 2008 full rates will be payable
from that date.
There are a number of exemptions, including listed
buildings, companies in administration/liquidation,
premises with a low rateable value (less than
£2,200) and properties held by a charity or amateur
sports club.
The Government, through the Department for
Communities and Local Government, have reserved
the right to introduce anti-avoidance measures
should they see evidence of owners seeking to
avoid rates by making empty properties incapable
of economic repair. This would include removing
roofs. The Rating (Empty Properties) Act 2007
contains powers to introduce these measures.
Annual property sector returns - UK 1986-2011 % pa
45
40
35
30
25
20
15
10
5
0
-5
-10
-15
-20
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
All property Retail Office Industrial
Source: IPD UK Digest 2007 & Real Estate Forecasting Feb 2008
Forecast
5

King Sturge: South Coast Metrolpole 2008
The aim of the Government is to increase the
supply of commercial property, especially for small
businesses. Their logic being that landlords will be
prepared to let properties to weaker covenants to
avoid empty rates, and consequently rents should
decrease. What is more likely to happen is that
speculative development will dramatically decrease,
hence increasing under-supply and driving rents
even higher.
This is a most curious tax. When markets are
booming (and vacancy is low) the Government will
earn less tax revenue. On the other hand, when
the economy is slow (and there are a lot of vacant
buildings) the Government will earn far higher levels
of tax revenue. The most serious consequence is
that those concerned with social deprivation and
urban regeneration will be outmanoeuvred by this
tax, and those areas on the fringes of financial
viability will suffer most.
Energy Performance Certificates
Energy Performance Certificates (EPCs) are being
phased in during 2008 for all non-residential
properties in the UK. The certificates are compulsory
and provide a summary of information about the
energy performance of a building, its fabric and
services, recording the environmental impact of the
building from carbon emissions. The certificate will
also include a recommendation report listing the
measures required to improve the energy rating of
the building. The legislation does not require these
shortfalls to be addressed.
The certificates apply to all ‘non-dwellings’ when
they are constructed, rented or sold, although
temporary buildings with a planned use of less than
two years are exempt. The certificates are valid for
two years. A fine of up to £5,000 can be levied by
Trading Standards officers for non-compliance.
Government concerns about too few qualified energy
assessors has led to last-minute amendments
to the introduction of EPCs. The Department for
Communities and Local Government (DCLG) is to
give a six-month grace period to landlords whose
property is already on the market when EPCs are
introduced in April 2008. The certificates, which
give an A to G rating of a building’s potential energy
efficiency, were to become compulsory from 6 April
2008 for any building over 10,000 m². The transitional
arrangements will mean that any property on the
market as of 6 April will not need an EPC until the
end of September 2008, provided it stays on the
market or is sold before that date.
Energy performance certificates and display energy
certificates – 2% new per year, 98% old buildings
Energy Efficiency Rating
Very energy efficient – lower running costs
(92-100)
A
(81-90)
B
(69-80)
C
(55-68)
D
(39-54)
E
(21-38)
F
(1-20)
G
Not energy efficient – higher running costs
UK 2005
Current
55
Directive 2002/91/EC
Potential
78
Environmental (CO 2
) Impact Rating
Very environmentally friendly – lower CO 2 emissions
(92-100)
A
(81-90)
B
(69-80)
C
(55-68)
D
(39-54)
E
(21-38)
F
(1-20)
G
Not environmentally friendly – higher CO 2 emissions
UK 2005
Current
50
Directive 2002/91/EC
Potential
Commercial buildings of more than 2,500 m²
will need an EPC from 1 July 2008, and all other
commercial premises from October 2008.
It is hoped the move will avoid the controversy that
dogged the introduction of Home Information Packs
(HIPs), which were delayed last year following a
legal challenge from the RICS. The transition period
is to be introduced following calls from industry
stakeholders who were concerned that too few
energy assessors had been accredited to work on
commercial schemes. Many would-be assessors
were only able to start training at the beginning of
March because of delays in finalising the computer
model used to calculate the rating.
This is a re-run of the disastrous introduction of
energy certificates in HIPs in 2007. It illustrates the
problem of implementing Europe-wide legislation.
A number of countries are facing a similar dilemma
in trying to comply with a directive from Brussels
but unsure of how to introduce the law.
In a related move, the Government also announced
that by 2019 it intends that all non-domestic buildings
should be zero-carbon. Knowing the problems
that this challenge is also creating for the housing
industry, where it is imposing enormous costs and
logistical challenges, there must be a question mark
over whether 2019 is a feasible date for the nondomestic
property market.
65
6

EPCs - Implementation
6 April 2008 All commercial buildings for sale or to let
over 10,000m 2 , and all newly constructed
commercial buildings, to have an EPC
1 July 2008 All commercial buildings for sale or to let over
2,500m 2 to have an EPC
1 October
2008
All remaining commercial buildings for sale
or to let, and all private rented and social
housing, to have an EPC and all public sector
buildings has an DEC.
operators, dominated by Flybe. New routes in
2008 include Frankfurt, Nice and Verona. The most
popular routes are still UK domestic airports and
Paris.
Trains, planes and automobiles
The Department of Transport is funding improvements
to the railway line linking Southampton Port to
the West Midlands and Scotland. The £43 million
investment will enable the track to accommodate
the next generation of sea containers, which are
too big to fit through the tunnel under the city
centre and under bridges between Southampton
and Birmingham. The scheme should increase the
percentage of containers that leave the dock by rail,
which has fallen to 28% following the introduction
of the new sea container. When the scheme is
completed in 2011 the number of containers moved
by rail will rise to 40%, from around 255,000 to
400,000 per annum, helping to ease the congestion
on the city’s roads. Rail freight generally has
increased to take about 24% of all the movement
of goods in Britain. Expect traffic congestion in the
city centre during construction works.
Flybe operates from Southampton Airport
Bournemouth Airport has announced the start of a
redevelopment programme to improve passenger
facilities over the next five years. Work has
commenced on a new £32 million regeneration
programme to include the construction of a new
international Arrivals Hall and departure lounge
with associated retail and catering facilities. The
programme will be delivered in step with predicted
rises in passenger numbers, estimated to increase
to 1.8 million in 2019 and 3 million in 2015. Works
also include improvements to traffic management
to and from the terminal and an upgraded bus
service connecting with the city centre. New routes
have been announced by operators Ryanair, easyJet
and Wizz Air, including Alicante, Milan, Grenoble
and Geneva, together with Katowice, Warsaw and
Gdansk in Poland.
Freightliner, Southampton
Southampton International Airport continues to
expand with 1.96 million passengers in 2007, an
increase of 2.8% on the previous year. The 98-yearold
facility now serves 46 destinations with 14
7

King Sturge: South Coast Metrolpole 2008
Red Funnel car ferry
HSBC Southampton Airport
Traffic congestion in Southampton is one of
the greatest challenges facing the city, and will
lead to a measurable decline in the city’s future
prospects. The congestion on all roads leading
into and across Southampton at peak times is
reducing the attractiveness of the city as a place
to live and work, and the problem is accelerating.
Southampton has one of the worst rush hours
in the UK outside of London, and a traffic lights
system that is designed to control the movement of
traffic across the city. The problem is compounded
by a series of major developments under way and
planned in the centre, including London Road, the
IKEA store, the improvements to the rail network
and West Quay Phase III. It is inevitable that either
a comprehensive park and ride network or a roadpricing
scheme will need to be introduced if the city
centre is to continue to provide a sustainable retail
and employment base.
The success of Southampton as a destination
and home for cruise ships continues, servicing
a worldwide industry which is enjoying a huge
renaissance. Major operators Carnival (P&O),
Cunard and Princess have committed themselves
to Southampton until 2028, making the city the
busiest cruise port in Europe. A new £19 million
cruise terminal at Ocean Dock, opposite the former
Ocean Terminal, is expected to be completed in
2009/10, to process up to 4,000 passengers at
one time. One million passengers are expected to
pass through the port in 2009, and this in turn is
fuelling unprecedented demand by hotel operators
to develop new facilities in the city centre.
Queen Victoria
Prime yields
Offices % Industrial % Retail %
UK Prime 5.75 6 5
Southampton 6.25 6.25 5
Portsmouth 6.5 6.5 5.5
Bournemouth 6.5 6.5 5
Fareham 6.5 6.5 5.5
Source: King Sturge
8

The European Union - one market of 500 million
EU 15:
• Germany
• France
• Belgium
• Netherland
• Luxembourg
• Italy
• Spain
• Republic of Ireland
• Austria
• Portugal
• Greece
• Finland
• Denmark
• Sweden
• United Kingdom
EU 10: As of May 2004
• Estonia
• Latvia
• Lithuania
• Poland
• Czech Republic
• Slovakia
• Hungary
• Slovenia
• Malta
• Cyprus
EU 2: As of January 2007
• Romania
• Bulgaria
Candidate Countries
• Turkey
• Croatia
• Former Yugoslav
Republic of
Macedonia
Principle market sectors
Industrial market review
Despite doom-mongering in the press and the effect
of the credit-crunch on the investment market,
occupier demand in the industrial and warehouse
sector has held up well over the last 12 months.
Good levels of demand have led to an overall
increase in the number of transactions compared
to the previous 12 months (March 2006 to March
2007). Concerns over the global economy have led
to a dramatic reduction in investment activity in the
sector, but to date this has not fed down into the
occupier market. We start our industrial review in
the west of the Metropole region.
Weymouth and Portland continue to perform well,
aided by their selection as the venue for the 2012
Olympic sailing events, and inward investment from
both the private sectors and Regional Development
Agency (SWRDA). Retailer New Look’s 13.35
hectare Mount Pleasant Business Park in Weymouth
has obtained planning permission for a mixed-use
scheme including 11,200 m² of offices, an 8,360 m²
enterprise zone, 7,300 m² of bulky goods retailing, a
new fire station, medical centre and hotel.
Osprey Quay, Portland
Rok’s 1.21 hectare Osprey Quay development
in Portland is now completed, with the last three
units let to G.3 Systems at a rent equivalent to £70
per m². Rok originally purchased the site in 2005,
constructing five speculative units on the back of a
pre-sale, again to G.3 Systems.
Navigator Park, Portland
9

King Sturge: South Coast Metrolpole 2008
In Poole and Bournemouth, a lack of supply has
kept the market active with a number of significant
transactions. Space Properties and Standard Life
Investments have acquired a fully serviced 2.14
hectare site from Rok at the equivalent of £3.08
million per hectare. The site has been developed
as Poole Trade Park, providing ten units totalling
3,251 m². Lettings have been achieved to Tile Giant
and Leapcutter at £118 m² with a further unit under
offer. The remaining 1.21 hectares remain available
for design and build opportunities at quoting rents
starting at £91.49 m².
The Delta Commerce Centre on the Old Wareham
Road in Poole has been sold for £4.6 million to
BC Asset Management and Space Properties. A
serviced warehouse and industrial development
for small occupiers is under construction on a site
of 0.81 hectares. Part of the site has also been let
to Marquis Caravans with a further 0.32 hectares
under offer to a self-storage occupier, where a highbay
unit of 2,323 m² will be constructed.
in Eastleigh over the last 12 months has been the
10,282 m² high-bay warehouse at 4 Parham Drive.
Craigard acquired the 12m high building from Peter
& May and have re-branded it Avalon after a major
refurbishment. The unit is available to purchase
quoting £7million or at an annual rent of £660,000.
Craigard is backed by Deeley Group, Atkins and
RBS.
Also in Eastleigh, Dean & Dyball have completed
the development of the former Manor Bakeries site
in Leigh Road. Hendy Group, the Ford dealership,
have taken a new showroom on a 0.83 hectare
site fronting the main road. The rear site of 1.61
hectares has been developed as a trade park and
small-unit scheme and sold, achieving between
£1,399 m² and £1,615 m². Occupiers include City
Electrical Factors and Hendy Ford.
Southampton Docks
Sunseeker. Poole Harbour
In Mannings Heath the former Sunseeker expansion
land site of 1.21 hectares has been sold for £2.6
million. The site, known as Vantage Point, will be
jointly developed for the Driving Standards Agency
and a small-unit scheme quoting £1,616 m²,
freehold.
Chancerygate have completed their new Trade Park
on a 0.81 hectare site fronting Broadstone Way. Fix
UK have acquired the 14-unit scheme with lettings
achieved to Screwfix, Trade Depot and Shorefloors
at rent equivalent to £118 m².
Further east, the largest warehouse transaction
The second-hand market in Eastleigh also remains
strong with four lettings on the Stanstead Road Trade
Park owned by Norwich Union and fund-managed
by Morley. New tenants include Dorsey Builders
Merchants, Eastleigh Carpets, Independent Garage
Services and BSS Group at rents in the region of
£86 m².
On the Barton Park Industrial Estate in Eastleigh IPIF
have let a 5,574 m² warehouse to Hutamaki (UK) at
a rent of £48.44 m². The company manufactures
disposable cups for McDonalds and Costa Coffee
and will use this as a UK distribution base.
On the Chandlers Ford Industrial Estate the former
Coopervision contact lense manufacturing facility
of 5,311 m² has been sold to Store Property
10

Investments. The building has been divided into
three and refurbished, including replacing the
cladding to the elevations and roof. Matthew Clark
have taken1,764 m² at an annual rent of £142,387
pa (£81 m²) and Paul Murray 1,040 m² at £83,932
pa (£81 m²). The last unit is currently under offer to
Gordons Fine Foods.
On the Nursling Industrial Estate, close to J3 of
the M27 to the west of Southampton, there have
been a number of significant lettings. Greatstar
have taken a new 10-year lease at SEGRO’s Vista
Nova scheme on Vista Park Southampton. The unit
comprised a modern high-specification building with
an 8m eaves height and achieved a rent of £70 m².
In Winchester Store Property Investments have let
Unit G on the Bar End Industrial Estate to White &
Co. The unit is 1,550 m² and the company have taken
a new 15-year lease at an annual rent £125,100 pa
(£81m²).
Vista Nova, Nursling
Southampton Docks
Legal & General have let 3,816 m² to DART Praha at
£67 m² at 30 Moorside Road on the Winnall Industrial
Estate in Winchester. The company is based in the
Czech Republic and will be manufacturing external
cladding systems for large UK public building
projects, including Portsmouth Hospital.
In Southampton, Chancerygate have started on site
on Phase 1 of their 4.047 hectare edge-of-city-centre
industrial development. The scheme will comprise
a Helical Trade Centre of 12 units totalling 5,971 m²
GLA at a quoting rent of £161 m². The units will have
an enhanced planning consent of B1c, B2 and B8,
permitting up to 30% of the floor area of each unit
to be used for trade counter use up to a maximum
of £150 m². The remainder of Phase 1 will comprise
a Chancerygate Business Centre of 6,090 m². The
units will range in size from 234 m² to 1,239 m²
and are available long leasehold from £1,400 m² to
£1,507 m² depending on size.
Southampton Container Logistics have let 2,415 m²
warehouse on a new 10-year lease at a rent of £62
m². They have taken the newly refurbished Unit 11
Oriana Way from AXA Sun Life for their warehouse
and distribution business serving Southampton
Docks.
Aqua Pacific have leased Unit 10 Oriana Way from
the Electricity Supply Nominees Fund, managed
by CBRE Investors. The company which has been
expanding its Pond One aquarium business in the
UK. The company has taken 5,667 m² on a new
five-year lease at a rent of £54 m².
Further east on the Matrix Park development
Segensworth South, near Fareham, IPIF have let
two further units. Unit 5 totalling 3,161 m² has been
let to Futurama on a new five-year lease at a rent
of £70 m². The company will distribute new and
reconditioned office furniture.
11

King Sturge: South Coast Metrolpole 2008
Airport Industrial Estate. The speculative scheme is
available on a leasehold or freehold basis and they
have recently sold 976 m² to Clares Office Supplies
for £1,024 m², 816 m² to Bell Micro Systems for
£1,185 m², and 408 m² to Harwoods for £1,185 m².
HPS have taken a new lease on a unit of 316 m² at
a rent equivalent to £89 m².
The largest letting in Portsmouth in 2007 has been
to Wellman Defence. The company, which fits out
and supplies the UK submarine fleet with electronics
equipment, has taken a 3,344 m² design and build
unit at £84.5 m². This is the first letting at SEGRO’s
Merlin Park, part of the former Bilton Portfolio.
Waste to Energy Plant, Southampton
Unit 6 has been let to James Latham on a new
15-year lease. The 3,202 m² unit achieved £70
m² with the company relocating from Eastleigh,
supplying the trade with specialist wood products.
The largest freehold industrial transaction in
Portsmouth was the sale of the former De La Rue
premises on Walton Road to Scottish & Southern.
The company, who last year acquired the 15,328
m² Autoliv building in Havant, purchased this high
office content 10,890 m² unit for £5.5 million.
The national parcel distribution company ANC has
taken a lease at 5e Dewer Close Segensworth
West. The building was previously occupied by
Nestle Water who have relocated to Unit 9 Matrix
Park.
Allied Developments have recently completed Phase
1 of their 5,436 m² nine-unit Fulcrum Scheme. Units
1, 2 and 3 totalling 2,304 m² and are under offer on
a leasehold basis at £75 m². Unit 9, 486 m², has
been sold to Pickwick Estates for £1,184 m².
Southampton Docks
Close to Fareham town centre at Fareham Reach,
First Alliance have let a 6,967 m² warehouse at £70
m² to CPG Logistics.
In Havant, Rok have completed construction of
their scheme on the 1.78 hectare Dakota Park on
Downley Road. The development comprises 7,387
m², and they have sold 1,601 m² to Formaplex,
a local high-tech company supplying electronic
components to the Formula One racing industry,
for £1,076 m² and further 2,076 m² to Tileasy for
£1,076 m².
In Portsmouth, SEGRO have completed the
construction of the first phase of the 12.9 hectare
Voyager Park on Portfield Road on the popular
12

Table 1: Available industrial buildings – Metropole Region
Property Size (m²) Description Asking terms Rent £/m²
Plot 36, Walworth Industrial
Estate, Andover
(UBS)
4,041 Design and build high bay New FRI lease term to be
agreed.
£80.73
Building Two, Drummond Park
Andover
(Zog Group)
Building Three, Drummond Park
Andover
(Zog Group)
Alpha Park, Eastleigh
(IPIF)
Avalon, Eastleigh
(Craigard)
Kawasaki, Eastleigh
(Maersk)
Unit 7, Barton Park, Eastleigh
(IPIF)
Unit 2, Kites Croft, Segensworth
(Easter)
Unit 1, Trilogy, Segensworth
(SEGRO)
Unit 3, Trilogy, Segensworth
(SEGRO)
18 Brunel Way, Segesworth
(Standard Life)
Kenwood Business Park, Havant
(UBS)
Royal London Park, Hedge End
(Royal London)
8,052 Second-hand low-cost former MOD
space
8,670 Second-hand low-cost former MOD
space
15,432 Second-hand 5.5m eaves warehouse
and production facility
10,287 Second-hand refurbished 12.45m highbay
warehouse
New FRI lease term to be
agreed.
New FRI lease term to be
agreed.
New FRI lease term to be
agreed or freehold purchase.
New FRI lease term to be
agreed or freehold purchase.
5,604 Second-hand warehouse Assignment/
sub-lease
5,574 Second-hand low-cost warehouse New FRI lease term to be
agreed.
3,257 One unit of 3,257m² remaining with a
design and build site up to 2,415 m²
4,657 20% high office content warehouse/
industrial unit
4,087 20% high office content warehouse/
industrial unit
New FRI lease with terms
to be agreed.
New FRI lease term to be
agreed or freehold purchase.
New FRI lease term to be
agreed or freehold purchase.
4,645 Second-hand refurbished warehouse New FRI lease term to be
agreed or freehold purchase.
4,908 Second-hand refurbished warehouse. New FRI lease term to be
agreed.
5,686 New 5,574 m² detached high-bay
warehouse with yard
Unit B, Sopers Lane, Poole 4,566 Low eaves height second-hand
warehouse
Unit 3, Interchange Park
Portsmouth
(Threadneedle)
Instem Building, Southampton
(Red Kite)
9 Oriana Way Southampton
(CBRE Investors)
Mastercare, Southampton
(DSG Group)
Testwood Park, Southampton
(UBS)
Aurora Southampton
(Universal Consolidated Group)
New Look, Weymouth
(New Look)
Chilcomb Centre, Winchester
(Cavendish and Gloucester)
4,682 One refurbished modern industrial/
warehouse unit remaining with an
additional design and build site up to
2,375 m².
8,085 Second-hand low eaves height
industrial and warehouse building
4,568 Second-hand warehouse with large
yard.
11,583 Modern 10m high-bay warehouse with
large secure yard.
11,365 HQ and production unit ready for
occupation
7,432 Detached warehouse with yard and
office space.
13,883 Modern 9m high-bay warehouse
capable of being split.
7,259 Second-hand warehouse with variable
eaves heights.
New FRI lease term to be
agreed.
New FRI lease term to be
agreed.
New FRI lease term to be
agreed.
£37.67
£37.67
£72.66
£69.96
£61.89
£46.83
£73.73
£69.97
£69.97
£67.27
£80.73
£43.80
£67.28
New lease to be agreed. £43.06
New FRI lease term to be
agreed.
Assignment/
sub-lease
New FRI lease term to be
agreed.
New FRI lease term to be
agreed.
New FRI lease term to be
agreed or freehold purchase.
New FRI lease term to be
agreed.
£64.58
£73.73
£64.58
£59.20
£43.06
£75.35
13

King Sturge: South Coast Metrolpole 2008
Table 2: Industrial Land Supply: Metropole Region
Property Size (m²) Description Asking terms
Solstice Park, Amesbury
65 ha Mixed-use business park Freehold and leasehold
(Abbey Manor)
Andover Airfield Business Park 50.55 ha 10.11 ha development site Freehold or leasehold
Andover
(Goodman)
BAE Systems Christchurch
3.71 ha Site redevelopment opportunity Freehold
(Terrace Hill)
Chichester Business Park, Chichester 6 ha Mixed-use employment site Freehold or leasehold
(Seaward)
Harts Farm Way, Havant
4.05 ha Outline consent for B1, B2 and B8 use Freehold
(Dwyer Plc)
Hamilton Business Park, Hedge End 1.62 ha Outline consent for B1,B2 and B8 use Leasehold
(Hargreaves)
Holton Heath, Poole
4.04 ha Outline consent for B1, B2 and B8 uses TBC
(BK Bluebird)
Concept Park, Poole
4.86 ha Outline consent for industrial, warehouse Freehold
(Space Properties)
trade park, offices
Osprey Quay, Portland
(SWERDA)
32.4 ha Employment uses Long leasehold
Merlin Park, Portsmouth
(SEGRO)
Voyager Park, Portsmouth
(SEGRO)
Phase 2 Southampton International
Airport
(BAA Lynton)
Marchwood Marine Park
Southampton
(Oceanic Estates)
Chancerygate Southampton
(Chancerygate)
Test Lane South, Southampton
(Southampton City Council)
BAT Site, Southampton
(BAT)
VT Woolston, Southampton
(SEEDA)
Cobham Gate, Wimbourne
(Glenbeigh Developments)
Mount Pleasant Business Park
Weymouth
(New Look)
Dunsbury Hill Farm, Waterlooville
(Portsmouth CC / Havant BC)
2.28 ha Outline consent for B1, B2, B8 up to
10,404 m².
12.95 ha Cleared site identified within the
Local Plan for employment uses. Two
speculative phases of 7,432 m² available
on a leasehold and freehold basis.
19 ha Cleared land-locked site to the northern
edge of the existing airport.
2.42 ha Site on western side of Southampton
Water for new specialist marine park
development.
4.85 ha Planning Permission for 46 B1,B2 and B8
units including 12 trade counter premises;
total scheme is 22,998m² (247,448ft²)
6.39 ha Identified within the Local Plan as an
employment site.
Leasehold
Freehold and leasehold
TBC
Freehold
Freehold/
long leasehold
Freehold.
4.45 ha Former cigarette production facility Freehold
2.42 ha Waterfront marine-related development Freehold
9.3 ha 9.3 ha business park. Design and build Freehold or Leasehold
options available
12.9 ha Mixed-use employment development site Freehold
105 ha Mixed-use employment development site TBC
14

Office market review
In any property cycle the office sector tends to be
the last to recover and the first fall. To date there
is little sign of any faltering, with strong demand,
record rents and significant pipeline schemes across
the region. The structural shortage of good quality
space in the Metropole region has at last been
recognised by the development sector, and the
rewards are there for those prepared to take some
risk, with occupier demand remaining buoyant.
It took almost all of 2007 for Ordnance Survey
to obtain detailed consent for a new 13,656 m²
headquarters on the Adanac Park site adjacent to
the M271 to the west of the city. Construction of
the infrastructure road is now under way although
it is likely to be mid-2010 before Ordnance Survey
can take occupation. The remainder of Adanac Park
has outline consent for a further 69,676 m² which
with a restrictive covenant restricting any further
development to a large space user. The owners, The
Barker Mill Trust, are seeking a developer partner to
assist them in the marketing of this site through the
latter part of 2008.
Street art, Southampton
Over the past two years we have reported a very
upbeat message on take-up which has increased
year on year since 2005. The five year average of
30,000 m² up to 2005 was exceeded in 2006 by
around 17.5%; 2007 continued the upward trend
with a record year seeing the average annual takeup
increase by 100% above the five-year norm. If
we take into account the two largest pre-lets to
Ordnance Survey and Carnival UK in 2007 a further
30,000 m² can be added to these take up figures.
This would give us a total increase closer to 200%
over the five-year norm.
Carnival UK headquarters, Southampton
Carnival UK’s new Southampton headquarters is
now under construction after receiving planning
in the second quarter of 2007. This 13,656 m²
headquarters building on part of West Quay 3 will
certainly kick-start the look of this area; however,
with the site being adjacent to the new IKEA
store, the location may not be as attractive as first
thought.
The construction of Number One Dorset Street in
Southampton was well under way at the beginning
15

King Sturge: South Coast Metrolpole 2008
of 2007, and before practical completion Grant
Thornton had signed a new 15-year lease on three
floors totalling 1,627 m² of this prestigious office
development in the city centre. Grant Thornton paid
£226 m² setting a new record for the city centre.
HSBC Southampton Airport
The public sector added to the record year with
the Primary Care Trust also taking refurbished
accommodation. Southampton PCT took College
Keep on Terminus Terrace. This building totalled
1,244 m² with PCT paying £161.46 m².
Xansa the NHS outsourcing company also acquired
1,207 m² in Compass House at the Ordnance
Survey complex in Maybush. This refurbished airconditioned
building achieved £150.09 m².
Cavendish & Gloucester are trying to replicate the
success of Business Homes with their office scheme
on the former Brookside Centre in Millbrook. However,
trying to achieve £2,798 m² on converted buildings
with old northlight roofs may prove problematical.
No 1 Dorset Street, Southampton
The refurbishment market saw a significant boost
with Capita, the outsourcing company, winning
the contract from Southampton City Council. This
gave an immediate need for 3,800 m² to 4,600 m².
With limited stock ready for immediate occupation
Capita took two buildings which required some
refurbishment. The Park House in Above Bar Street
totals 2,833 m² and, although not considered a good
office pitch and with only two car parking spaces
included in the transaction, the space achieved
£172.22 m² once refurbished. In addition Capita
also acquired a floor of Overline House, above the
central railway station, totalling 1,142 m².
Charlotte Place, Southampton
In Southampton city centre Irish developers McAleer
& Rushe will complete the fit-out of their previously
shell and core building known as Charlotte Place.
16

This 7,618 m² building has suffered in the past as it
was not ready for immediate occupation. However,
with the reduced quoting terms to £212.59 m² and
the fit-out finally completed, this building should
start to attract some serious attention this year.
The key to the continuing growth in take-up and
rents in Southampton city centre will depend on
how bullish the developers are. The city centre has
never had so many potential office developments
in the pipeline.
Probably the most prestigious scheme in the pipeline
is the Mayflower Plaza site owned by Terrace Hill.
The developer has submitted a planning application
for 180 apartments, a 150-bed hotel and a 10,591
m² office building. The office building, known as
Mayflower Point, is undoubtedly the most prominent
of the new build opportunities in Southampton.
The seven-storey building will provide floorplates
of approximately 1,394 m² with basement parking.
With close proximity to the railway station and the
city centre the scheme should attract early interest.
The hotel element has already been pre-sold to a
major chain, and a residential developer has been
selected. The offices will be built speculatively.
Adjacent to the Carnival UK development on West
Quay 3 a new 13,656 m² scheme known as Aqua
is proposed. This site does not have planning
permission and therefore a large building can be
tailor made to suit occupier requirements.
as Grosvenor House, Cumberland Place. It is likely
that the two adjoining buildings including the former
Bank of Ireland accommodation will be brought into
this development. Plans are yet to be unveiled,
although it is likely to end up a high multi-storey
mixed-use scheme.
Former ambulance station, Southampton
In April 2007 Durngate received planning for a
new headquarters for Raymarine in Portsmouth.
The site was originally planned for a circa 11,148
m² office development in two buildings; however,
with Raymarine requiring 6,503 m² of office space
with 2,787 m² warehouse accommodation the site
met their requirements perfectly. Contractors are
currently on site.
Linden Homes have obtained consent for a 6,503
m² office development in three buildings on the
former New College site on the Avenue north
of Southampton city centre. Linden Homes are
currently seeking a commercial development
partner to take this site forward.
The former Ambulance station on East Park Terrace
has outline consent for apartments, an hotel, an
aparthotel and 6,503 m² of office space. Imperial
Developments, the current owners, are seeking to
offload the commercial element of this scheme.
Through 2008 we are also likely to see further
planning applications submitted for the
redevelopment of the former AXA building known
Raymarine Headquarters, Portsmouth
17

King Sturge: South Coast Metrolpole 2008
The extensive refurbishment of the former IBM
complex at North Harbour by Highcross has been
re-launched as 1000 Lakeside. The building has
already seen success with lettings to Regus and
Handlesbanken totalling approximately 1,858
m². These transactions represent under 10%
of the whole building. This scheme will provide
Portsmouth with long-awaited good quality office
accommodation, although there is rather a lot of it.
In January 2007, on a site adjacent to Zurich’s
two existing buildings at Solent Business Park,
developers PPG and Bellhammer commenced
construction of a new speculative 4,181 m² office
building known as “Purple”. By March Zurich
had signed a 15-year pre-let. This was particularly
satisfying for PPG and Bellhammer as a five-year
option in favour of Zurich expired just before they
purchased the site from Arlington.
The Forum, Solent Business Park
Refurbished buildings in the out-of-town market also
attracted demand, particularly at Solent Business
Park. Greenhills purchased and refurbished the
former Digital buildings and have undertaken an
extensive refurbishment. When released to the
market they secured two lettings very quickly.
Interbay Funding took 929 m² on part of the ground
floor and The Hampshire Constabulary took 1,672
m² on the second floor with potential to expand into
a further 372 m². Both these lettings were on short
flexible leases.
As well as the notable large leasehold transactions
the smaller freehold market has also had a good
run. Business Homes started their 14-unit scheme
Victory Park on Solent Business Park and before
practical completion had sold half the scheme.
They achieved prices from £2260 to £2368 m² and
currently only have three units remaining.
Forum 4, a 4,459 m² building, which forms part of
the flagship office development on the south coast
undertaken by PRUPIM has offers outstanding.
There are also two additional requirements from
local occupiers, including Matchtech, of between
3,800 m² and 4,600 m².
In January 2007 Hampshire County Council acquired
another building in Southampton Road Eastleigh,
known as Nueance Global House. This building
totalled 2,323 m².
The Hampshire PCT entered into a complicated
transaction to take 1,858 m² in Omega House,
Southampton Road, Eastleigh. This building was
formerly occupied by Swatch, who surrendered
and vacated their lease on the first three floors,
enabling the landlords PRUPIM to refurbish this
accommodation to the PCT’s specification. Swatch
have already signed their surrender document for
later on this year when PRUPIM will refurbish the
remaining two floors and the agreement to lease
of the whole building will complete to PCT. This
refurbishment increased the rent on this building by
50% up to £161.46 m².
In the first month of 2008 HSBC signed a new 15
year lease on the new Cavendish & Gloucester
development at Southampton International Airport.
The record year concluded with the eventual
completion of the 3 year Lambert Court – Blake
Lapthorn Tarlo Lyons drama. The solicitors eventually
completed the acquisition of Lambert Court, the
former 5,295 m² Pfizer building at Tollgate Business
Park, Chandlers Ford.
A proposed new speculative 2,044 m² detached
office building at Botleigh Grange is already
attracting potential occupiers before a start on site.
The building is due to complete before the end of
2008.
The Standard Life development at Kingsworthy Court,
18

Winchester, achieved a record rent for the South
Coast when Barcardi took Building 2 totalling 1,821
m² on a new 10-year lease. Barcardi paid £140.00
m², an increase of £3.50 from the last transaction on
the scheme. In Winchester city centre another high
rent was achieved for refurbished accommodation.
Business Design Partnership acquired a couple of
floors of accommodation above Barclays Bank at a
rent of £215.28 m², a record rent for second-hand
accommodation in the city.
Poole, and Regents Place, the first speculative
office building in Bournemouth for over 15 years,
is rumoured to be under offer to Bournemouth
University. The 4,181 m² Grade A air-conditioned
building is due for completion in September 2008.
Royal Court Offices, Kingsworthy, Winchester
The Winchester market will receive a boost from
two refurbished buildings, Winton House and
Helmstan House, totalling nearly 1,858 m², currently
with strong interest in both.
Salisbury also saw some of the action with one of
the most notable transaction in the city’s recent
history. Trethowans Solicitors have taken 1,997 m²
in Building 1, Salisbury Office Park, leaving 1,208
m² available.
Further to the west, the early signs for 2008 show
that the occupier market is still relatively strong.
Barclays Bank are still seeking over 9,290 m² in
19

King Sturge: South Coast Metrolpole 2008
Table 3: Metropole region: New office land and building supply
Location Developer Scheme
Dorset Street
Southampton
Dorset Street Properties
Four-storey office.
Three floors let to Grant Thornton
3rd floor 684 m² available
Mayflower Plaza
Southampton
Phase II
Skandia Point
Southampton
Charlotte Place
Southampton
Terrace Hill
Brentwood Estates
McAleer & Rushe
City-centre office, residential and hotel site. Planning
submitted for granted for 10,500 m2 of offices, 198
apartments and 150 hotel
A site for 3,030 m² six-storey city-centre office
Possible increase to 6,038 m²
7,674 m2 nine-storey offices.
Finished to shell & core
New College
Southampton
West Quay
Southampton
Former Ambulance Station
Southampton
Adanac Park
Nursling
Linden Homes
Dev Sec
Imperial Developments
The Barker Mill Trust
Planning for three detached office building totalling
7,432 m²
Site for an additional 16,656 m² building adjacent to
the new Carnival HQ
Mixed-use site including 9,290 m² for a detached
office building
Strategic 25 ha site for corporate headquarters
adjacent to J3 of M27 motorway. Detailed consent for
the new OS HQ and outline for a further 69,676 m²
Southampton Science Park University of Southampton Site for 8,000 m² R&D high-tech facility.
Centris
Eastleigh
Botleigh Grange Office Campus,
Hedge End
Kingsworthy
Winchester
Victory Park
Solent Business Park
Fulcrum
Solent Business Park
Phase Two
Solent Business Park
The Forum
Solent Business Park
Langstone Technology Park
Havant
Highland Developments
6,727 m² five-storey office, pre-let basis only.
A site for 2,322 m² detached office building
Standard Life
Building 1 pre-let to PPD Pharmaceuticals
Building 2 let to Bacardi
Building 3 available, 984 m²
Business Homes 14 buildings from 232m² to 557m²
11 buildings sold three buildings available
Allied Site available for D&B up to 19,113 m²
Outline consent
Goodman 8.09 ha, with outline consent for 22,296 m²
Prudential
Forum Four , Five and Six
232,255 m² available as D&B
Laselle Investment Management New D&B available up to 10,000 m²
Bournemouth International Airport MADL Planning submitted for 18,580 m²
St Paul’s Square
Bournemouth
Riverside Avenue
Bournemouth
McAleer & Rushe
Troika
Detailed consent for 9,548 m² plus 184 residential
apartments.
Planning submitted for 23,225 m² plus
4,645 m² medical
20

Retail and leisure market review
On a macro level, the retail sector fared extremely
well in 2007. Despite the cumulative effects of
five interest rate rises over a short space of time,
rising energy costs, the wettest summer on record
and the well-documented credit crunch, consumer
confidence remained remarkably robust. Monthly
like-for-like retail sales were ahead of the previous
year for every month during 2007.
Retail sales monitor. BRC-KPMG total and LFL retail sales
vs ONS retail sales value and volume (seasonally adjusted
7%
6%
5%
4%
3%
2%
1%
0%
Jan
07
Feb
07
Mar
07
Apr
07
BRC total retail sales
Source: King Sturge
May
07
ONS retail sales volume
Jun
07
Jul
07
Aug
07
Sep
07
Oct
07
BRC LFL retail sales
Nov
07
ONS retail sales value
Contrary to most media reports (many of which
seem determined to talk the UK economy into
recession), this strong performance continued
to the all-important Christmas period. The British
Retail Consortium (BRC) reported that total sales
growth for December was 2.3% year-on-year, or
0.3% on a like-for-like basis. Doom-mongers may
point to the fact that the rate of growth was lower
than in previous years but this misses the point.
The fact that the sector reported any growth at all,
against extremely tough comparatives of 2005 and
2006 and defied weakness in the wider economy,
marked a very solid performance.
As ever, there were significant performance
disparities between both retail sub-sectors and
individual operators. In simplistic terms, food
retailers fared very well, while the clothing sector
struggled. In bulky goods, DIY was strong, while
electricals and furniture were weak. As discretionary
purchases, these sectors tend to be the first to
suffer from a forthcoming downturn.
While retail trading generally exceeded expectations
last year, few retailers are under any illusions
Dec
07
Jan
08
140
135
130
125
120
115
Index 2000 = 100
that 2008 will prove anything other than difficult.
Consumer confidence is already showing signs of
weakening, while retailers are bracing themselves
for margin-eroding cost inflation (eg cost of raw
goods and energy). This year has already seen a
number of retail casualties, with high street names
including Dolcis (footwear), Select (value fashion),
Elvi (plus-size fashion), The Works (discount
books) and Ponden Mill (soft furnishings) going
into administration. However, for all the downturn
in retail sales and belt-tightening by retailers, it is
important to stress that the underlying occupational
market is still holding up relatively well.
Trends in house prices, retail sales and housing equity
withdrawal (HEW)
30%
25%
20%
15%
10%
5%
0%
2002
2003
2004
Y-on-Y house price growth
Source: nationwide/ONS/Bank of England
2005
2006
2007
Y-on-Y retail sales growth
HEW as % of income
A strong occupational market was the key brightspot
for an otherwise difficult retail property market in
2007. According to the IPD Annual Digest, total
returns in retail fell by 6.1% last year, the worst
annual performance since 1990. This was fuelled
by a 10.1% slump in capital values, the first time
growth had been in negative territory since 2001.
On a more positive note, the strong occupier market
resulted in a 2.1% increase in rental values.
Internet shopping continues to grow exponentially,
but rather than representing a threat to the High
Street, the trend is, if anything, helping the high
street retailers: 14% (7% 2006) used the Internet
for most of their Christmas shopping in 2007,
with 74% using the web for at least one purchase
(Source RLI). Some 72% of retailers (51% 2006)
now provide online stores to complement their high
street businesses.
Although these figures are ostensibly poor, we
believe that this marked a correction in the market,
21

King Sturge: South Coast Metrolpole 2008
rather than a sustained downturn. Taking a view over
a longer term, total retail returns had comfortably
been in double-digits since 2002, prior to the sharp
correction in 2007. While a recovery may not be
imminent, it is likely to be on the medium- rather
than long-term horizon.
IKEA, the hugely successful Swedish furniture
retailer, has finally achieved planning permission for
a new site on the former Pirelli site in Southampton.
The centrally located site adjoining West Quay
Shopping Centre will provide 891 car-parking
spaces, and follows an unsuccessful attempt to
redevelop the Calor/Dimplex site in Millbrook Road.
The new 31,200 m² store on four levels will include
a 600-cover restaurant and, in line with other similar
stores in the UK, will draw in customers from a
very wide hinterland. Traffic chaos is guaranteed,
and will make car journeys into the city, especially
near Christmas when the football club is playing at
home, a challenge for even the most patient driver.
have had their value sharply adjusted to reflect
the current economic situation. However, most
commentators conclude that the market has now
corrected itself, perhaps too much, and there are
plenty of bargains out there for cash purchasers.
Parkridge have started to acquire retail investments
in the UK at post-credit-crunch prices and others
will follow. Helical Bernard Land Securities have
also announced they have £500 million to expand in
the sector. The UK market has a lot of positives: a
sophisticated offer in design and occupancy, and far
less risky than the troubled U.S market, or India and
China. The UK also provides greater transparency
and an easier legal system than some parts of
mainland Europe. The sector is likely to recover
well over the next two years, although recovery in
capital values will be led by an improvement in yield
against relatively flat rental growth.
West Quay Shopping Centre, Southampton
IKEA site, Southampton
A planning application by Sainsbury to build a
new 7,000 m² superstore in Portswood has been
rejected by the Secretary of Estate following a
public enquiry. Although the principle and size of
the store is accepted, the design is considered
inappropriate for the site. A revised application is
likely to be submitted later in 2008.
The credit crunch has certainly led to a correction
in the retail investment sector, with the value of
retail investments falling by between 10% to 20%.
Major schemes, such as British Land’s Meadowhall,
Parkridge have acquired the Bargate Shopping
Centre in Southampton from Derwent London for
£17.25 million. The purchaser also acquired Tudor
Arcade Shopping Centre in Dorchester for £14.75
million as part of a strategy to invest in the UK
retail sector. It is possible that the centre will be
redeveloped in due course.
Residential market review
The residential market is certainly slowing down,
both in terms of the number of transactions and the
value of stock, but is far from a state of collapse.
There are a number of dynamics influencing the
market in 2008/09.
22

A general slowdown in economic growth prospects
has reduced consumer confidence and levels of
surplus income. Both are necessary to keep the
residential market active. As a consequence many
people are choosing not to move, which is reducing
turnover and overall house prices. The credit crunch
has also dramatically reduced the availability of
cheap loans, particularly for high-risk individuals
and the buy-to-let market. This overall tightening of
lending criteria is to some extent countered by a
reduction in interest rates, but we expect to see a
very quiet market throughout 2008 until confidence
returns.
East Cowes
During the course of 2007 the oversupply of twobedroom
apartments began to make itself felt.
After the summer developers noticed a drop in
interest from purchasers, and footfall through the
show houses slowed dramatically. While London
has continued its growth, the north and to a lesser
extent the south, has seen a return to offers of
incentives from developers to encourage sales.
On the South Coast, however, sales are still being
achieved with location, parking and affordability all
major factors in the sales process.
The French Quarter, Southampton
Against this background house prices will inevitably
continue to fall in 2008, but this is likely, with some
regional variation, to be contained at around 5% to
7% for the whole year. Certainly this will be far less
than the 15% correction in 1991 at a time when
interest rates doubled and household finances
were in deficit (when basic expenditure exceeds
income).
23

King Sturge: South Coast Metrolpole 2008
In Southampton Linden Homes’ French Quarter
continues to sell well with prices aimed at the
affordable level. Barratt’s landmark scheme at
Oceana Boulevarde, with good views over the docks
and Southampton water, has sold well at the lower
end of the market but has struggled with the more
expensive two-bedroom apartments. This reflects
the oversupply of two bedroom apartments in the
south at the moment but shows that the lower end
of the market is still moving. We believe the market
will return for the two-bedroom apartments but
quality of finish, location and parking will be a major
factor in achieving sales.
The city has again seen some interesting planning
applications including Mayflower Plaza, a mixed
scheme of office, hotel and residential in a prominent
central location with good views over the city and
docks from the upper floors. Developers Terrace
Hill, after long pre-application consultations with
the planners, expect a decision in the summer of
2008.
City Lofts’ scheme on the site of the former Tyrell
and Green building in Southampton moved a step
closer to development with the grant of detailed
consent, but has yet to start construction. With
some other interesting high-rise schemes waiting
in the wings, Southampton, Bournemouth and
Portsmouth are poised for landmark schemes in the
coming years, reflecting the confidence developers
place in the South Coast region.
by Barratt Homes for £2.2 billion. This could lead
to the development of the next phase in Ocean
Village, which will provide 435 flats and 5,000 m² of
new retail and restaurant units.
The Isle of Wight has again seen pockets of
dramatic growth with developments in Cowes
coming to completion and Barratt’s new scheme
‘Nautiqua’ well situated on Cowes seafront still
under construction. The market here, reliant as it
is on mainland second-home buyers, has been
affected by the slowdown, although the Barratt’s
scheme in East Cowes, known as the Hawthorns
and whose first phase in now under construction,
has generated a lot of interest from both local and
mainland buyers. The interest in the island market
from mainland developers continues at pace with
more and more recognising the potential the Island
has to offer.
Cowes chain ferry
Miller Homes are the latest developers to journey
across the water, having been chosen as preferred
developers for the Pan Scheme at Newport in the
centre of the island. This scheme will involve a high
proportion of affordable homes and will be a major
expansion of the island’s capital.
Telephone House, Southampton
Also in Newport plans for a major development
of Blackhouse Quay have been announced which
will include 217 homes, business units and a
hotel. London-based Fairholme Estates are the
applicants.
Wilson Bowden, the developer of Admiral’s Quay at
Ocean Village, Southampton, has been taken over
24

market, although there are some larger apartment
schemes still in the planning stage.
Dolphin Quays, Poole
East Cowes
Poole’s popularity, especially the Sandbanks
peninsula, continues unabated with some of the
most expensive property in the world in one of
the most stunning locations. This has been further
fuelled during the year by a television documentary
about life on the peninsula. Elsewhere in Poole, Patch
Properties have revealed plans for a 13-storey hotel
and up to 250 apartments, shops and restaurants
on the former Thistle Hotel and East Quay Depot
Site.
Bournemouth, like many towns in the south,
suffers from an oversupply of two-bed apartments,
although as ever good location and sea views
continue to be the catalyst for successful sales.
The C&A building in Commercial Road has provided
interest with Asset Trust Housing developing
shared ownership apartments. Other developers
in the area continue to develop schemes usually
just below the affordable housing threshold. Local
specialist developers continue to dominate this
Poole Harbour
Portsmouth Football Club continue to seek a new
site for their club with the futuristic proposal close
to the docks not finding favour with the authorities.
Wherever is eventually chosen, residential
development in one form or another is bound to be
a catalyst either in the sale of their existing site or
the creation of a new one. Linden Homes will soon
be marketing ‘Vista’ a development of one- and twobedroom
apartments close to the railway station,
while Berkeley Homes market the last of their luxury
crescent penthouses at Gunwharf Quays. Barratt,
Crest, Bellway and Bryant are all active in the city.
Berkeley’s striking tower development known
as No 1 Gunwharf Quays will accommodate 141
studios and one-, two- and three-bed apartments.
This spectacular building is meant as a foil to the
Spinnaker Tower, which represents sail, while No 1
represents steam.
25

King Sturge: South Coast Metrolpole 2008
acquisition of New College in The Avenue and the
former Hendy Ford garage in Chandlers Ford.
Gunwharf Quays, Portsmouth
Chichester has also seen some exciting activity
with the start of David Wilson’s Roman Quarter,
a flagship development set in the historic walls of
this cathedral city. This development comprises
116 one-, two- and three-bed luxury apartments. On
the outskirts of the town Try Homes are preferred
developers for the former Graylingwell Hospital
site. This comprehensive and exciting proposal
aims to be 100% net zero carbon and will add to the
history, performance and the arts of Chichester. The
residential element will be in nine clusters and will
feature some innovative and interesting designs.
East Cowes
Galliford Try have acquired Hampshire-based Linden
Homes for £244 million. The acquisition makes Try
Homes one of the top ten residential developers in
the UK, with 3,000 new homes proposed in 2008.
Linden have been responsible for a number of key
developments in Southampton, including Telephone
House, The French Quarter and more recently the
26

Table 4: Major new build residential developments 2008
SOUTHAMPTON
Site
Developer
Landowner
Conversion/
New build
No. of
units
Notes
Ocean Village Wilson Bowden New build 435 Phase 1 and 2 almost sold.
Planning permission achieved
for Phase 3 (230 units)
Former Tyrell and Green,
Above Bar
Former Ambulance Station,
East Park Terrace
City Lofts New build 259 Planning permission has been
granted. Start on site 2008.
Imperial Property
(Southampton)
Telephone House Linden Homes Conversion and
extension
New build 225 Apartments. Planning application
has been submitted. Mixed-use
scheme including a hotel and
office.
128 Approaching completion of
sales.
French Quarter, High Street Linden Homes New build 175 Mixed-use scheme including
bars and restaurants with
residential above. 52 of
the 175 are for sheltered
accommodation.
Mayflower Plaza Insight New build 197 Mixed-use scheme including
197 apartments. Detailed
consent awaited.
Havelock Chambers,
Oxford Street
The College Annex,
Albert Road, South
Lance Homes Conversion 22 Show home open. Eight
apartments remaining.
Clydesdale
Conversion/New
build
104 44 conversion units all sold. 60
new build micro flats in pipeline.
The Crescent, Canute Road Inner Circle New build 88 Full planning achieved
College Street Crest Nicholson Wessex New build 90 Full planning granted
Woolston Centenary Quay Crest Nicholson Regen New build 100 Full planning pending
Phase 1
Ocean Village Boatyard Linden Homes New build 99 Full planning pending
East Park Terrace Delph Group New build 121 Full planning pending
Ordnance Survey Phase 1 Kier Group New build 64 Full planning pending
West Quay Site B Dev Sec New build 165 Pending Application
Admirals Quay, Ocean Village Wilson Bowden Full granted 230 Full planning granted
As well as the above the following sites in Southampton are earmarked for some residential development:
Royal Pier
Central Station
West Quay
BAT Industries
Civic Centre and Guildhall
27

King Sturge: South Coast Metrolpole 2008
PORTSMOUTH
Site
Developer
Landowner
Conversion/
New build
No. of
units Notes
Gunwharf Quays Berkeley Homes New Build 120 Blue building has been released.
Historical Naval Dockyard, Car Park Crest Nicholson New Build 550 Planning application submitted.
Queen Mary’s Hospital TBA New Build 120+ Has detailed planning
permission.
Pompey Village (Fratton Park),
Fratton
TBA New Build 500 500 apartments. Has detailed
planning permission as part
of the redevelopment of
Portsmouth Football Club.
Queens Street Barratt Homes New Build 160 Construction continues.
Tipner Regeneration Area Master Plan being considered.
Somerstown Regeneration Area Viability Study under way.
BOURNEMOUTH
Site
Developer
Landowner
Conversion/
New build
No. of
units
Notes
St Paul’s Lane Rokscar New build 185 Mixed-use scheme with
9,290 m² of offices. Detailed
planning achieved.
Midland Hotel KingsOak New build 80 Planning approved for
apartments.
Honeycombe Chine, Boscombe
Pier
Barratt Homes New build 169 Apartments. Marketing
continues.
Winter Gardens New build 208 Part of mixed-use development
site.
28

Main commercial centres
Southampton and Eastleigh
Industrial Office Retail
Prime rent £80.73m 2 £236.81m 2 £4,090.32m 2
Prime yield 6.50% 6.25% 5.00%
Prospects ✓ ✓✓✓ ✓
Southampton
Industrial Office Retail
Prime rent £80.73m 2 £236.81m 2 £538.20m 2
Prime yield 6.50% 6.25% 6.00%
Prospects ✓ ✓
Eastleigh
Issues
Ordnance Survey have received planning permission
to move into a new world-class headquarters building
at Adanac Park, adjoining J3 of the M27 motorway
west of Southampton. The new facility will provide
16,409 m² for the company who will move out of the
existing Maybush headquarters once the scheme is
completed by developer Kier. As well as a detailed
planning permission for Ordnance Survey, the 29.94
hectare site has also been granted outline consent
for up to 60,000 m² of new office accommodation,
allowing the city to compete globally for inward
investment from new office occupiers. Barker Mill
Trust, who own the site, are considering options
to promote the balance of the site to the market.
Ordnance Survey’s existing facility in Romsey Road,
Maybush, will be redeveloped to provide a mixeduse
residential, office and retail scheme.
Hammerson are acquiring the final site adjoining the
West Quay Shopping Centre from Southampton
City Council. The developers, who also own the
shopping centre, are proposing a mixed-use retail,
cinema and 120-bed hotel scheme on the site.
The site will also incorporate a new piazza and a
27-storey high-rise residential block providing 200
new apartments. The scheme could be completed
by 2010 and provide a boost to retailing in the city
which has seen its national ranking slip from seventh
to thirteenth. The site adjoins a new headquarters
for cruise ship operator Carnival and IKEA.
West Quay, Southampton
Antelope House, one of Southampton’s ugliest
buildings, has been demolished to make way for
a new mixed-use development. The building on
Bursledon Road, Southampton, will be replaced by
the second phase of Rokeby Developments’ new
16,722 m² mixed-use scheme, Antelope Park. The
first phase replaced builders’ merchants Jewson, in
a new 1,858 m² unit, a relocation from their original
store under Antelope House. The scheme, funded
by Morley Pooled Pensions is pre-let to home, retail
and garden retailer The Range (6,503 m²), Gola
Leisure (3,716 m²) and KFC. A further 5,574 m²
remains available.
Southampton General Hospital
Key Property Investments, a joint venture between
St Modwen Properties and Salhia Real Estate,
has taken over the former Alstom carriage works
in Campbell Road, Eastleigh. St Modwen are now
operating the 55,741 m² of railway repair sheds
and warehousing as a managed estate, while
29

King Sturge: South Coast Metrolpole 2008
30

King Sturge: South Coast Metrolpole 2008
the long-term future is appraised. 12,077 m²
has been let to VFS, LETS, P&M Packaging and
Knights Rail Services. St Modwen are looking at
long-term regeneration of the area together with
Eastleigh Borough Council and SEEDA, the regional
development agency.
Rok, the Devon-based contractor, has pulled out of
the commercial development sector, and is closing or
winding down all its offices in the UK to concentrate
solely on construction. The Southampton office of
Rok has been involved in a number of transactions
in the region including Dakota Park in Havant, and
the former Co-op Dairy site in Cumberland Road in
Portsmouth.
First Group have acquired the freehold interest in
the former Excel Logistics site in Empress Road,
Southampton. The bus company bought the 1.368
hectare site for £4.05 million, including buildings
totalling 7,757 m², from owners DHL Real Estate.
The site will be used as a depot for First Hampshire
& Dorset, following a relocation from Portswood.
Southampton City Council continues to support and
promote high-rise buildings in a seemingly relentless
quest to see a series of iconic buildings rise up across
the city skyline. One of the latest proposals is the
City Gateway, a 15-storey residential and medical
centre proposed at the junction of Stoneham Way
and Thomas Lewis Way. The scheme includes 117
apartments and a convenience store, and is being
promoted by CareCapital and Southampton City
Council.
f
Street art, Southampton
Grosvenor Square, Southampton
PPG have acquired the former AXA building in
Cumberland Place from investors Irish Life. The
building has remained vacant for many years,
and they intend to redevelop the building to
provide a prime landmark office scheme. It is
likely that adjacent sites could be absorbed into
a new development, as the city council are keen
to encourage high-rise iconic buildings in the city
centre.
A £40 million extension to the Rose Bowl, home of
Hampshire Cricket Club, continues to be promoted
by owners Rose Bowl Plc. The plans, including
an 18-hole golf course and 175-bed hotel and
conference facility, are intended to attract major
events to the 64.75 hectare site in West End,
including potentially future Test matches. Detailed
plans were submitted in the spring of 2008, and
include proposals to improve the road infrastructure
around the site.
32

Plans to redevelop the 12.54 hectare former Vosper
Thorneycroft Shipyard in Woolston, to the east of
Southampton, have been submitted to the city
council. The new proposals are for a high-density,
high-rise residential development of up to 1,653 new
waterfront apartments and 21,000 m² of marinerelated
employment. The preferred residential
developer, Crest Nicholson, has also included a new
foodstore, 100-bed hotel and 4,500 m² of offices.
The possibility of a major boat-builder taking a large
chunk of the marine space remains very real and
this could help to kick-start the scheme. It remains
debateable whether Woolston could absorb so
many new flats in such high density, but it is clear
that critical mass is needed if this off-the-beatentrack
location is to succeed. The new scheme,
known as Centenary Quay, is now in the hands of
planners.
Swan Centre, Eastleigh
Eastleigh town centre is receiving a boost with a
new £24 million nine-screen multiplex cinema and
20-lane bowling alley. The scheme, currently under
construction adjoining the Swan Shopping Centre,
will be operated by The Vue and AMF Bowling, and
includes a Frankie & Benny and Nandos restaurant
outlets.
Southampton Docks
Swan Centre, Eastleigh
The future of the former Tyrell & Green (John Lewis)
department store in Above Bar, Southampton, is
far from secure. The site is currently in its second
ownership, acquired by stylish developer City Lofts
for £7.25 million. The redevelopment is an important
step towards the regeneration of the northern area
of the city, but with an over-supply of luxury flats in
the city and a weakening market, rumours of the
developer looking to sell on the site yet again are
probably correct.
The hotel market is currently booming across the
south, and with an exponential rise in the cruise
ship market, operators are desperate to secure
representation in the city centre. Radisson have
consent for a new 204-bed hotel, Etap have opened
close to the docks and a 225-bed hotel is earmarked
for Ocean Village. Terrace Hill’s development in
Commercial Road has also attracted an operator for
a 150-bed facility.
Swan Centre. Eastleigh
33

King Sturge: South Coast Metrolpole 2008
The long-running saga to redevelop Southampton’s
Royal Pier continues to be just that. Two undisclosed
developers have undertaken discussions with port
operators ABP and Southampton City Council to
regenerate the pier and adjoining Mayflower Park to
provide a major mixed-use waterfront development.
The proposals, which would give much-needed
public access to the waterfront have once again
been dropped. The only positive outcome is that
Southampton Boatshow can continue to use the
site, but the city will lose out to neighbouring
settlements unless it can provide a meaningful
waterside facility.
Royal Pier, Southampton
Southampton Docks
Dean & Dyball’s M3 Trade Park in Eastleigh has
seen a number of successful freehold disposals.
Abel Ceramic & Marble have acquired a 279 m²
trade-counter unit, and Headlam have acquired
Units 10 and 11, totalling 557 m². Finally Hendy
Ford acquired Unit 5 as part of their new showroom
and servicing facility.
Tyrell and Green, Southampton
Industrial activity
Aqua Pacific UK have taken a new five-year lease on
10 Oriana Way, Nursling, Southampton. CB Richard
Ellis Investors let the 5,667 m² warehouse at a rent
of £305,000 per annum following Aqua’s relocation
from the Romsey Industrial Estate.
Petersfield Developments have let Unit 4 on the
North Brook Industrial Estate, Shirley to Solent Rev-
Use. The 417 m² unit achieved £19,500 per annum
on a new six-year lease, equivalent to £46.72 m².
Royal London Asset Management are constructing
a new 5,416 m² high-bay warehouse at Royal
London Park, Flanders Road, Hedge End. The unit
is due for completion in May 2008 with 10m clear
internal height to eaves, air-conditioned offices and
both grade and dock level loading.
34

End, Southampton. Custom TV Ltd have taken a
new five-year lease at a rent of £23,750 per annum
on the 305 m² unit.
Vista Nova, Nursling
Norwich Property Trust have let Unit 5 on the
Stanstead Road Trade Park in Eastleigh to
Independent Garage Services. The refurbished unit
of 456 m² achieved £80.73 m² on a new 10-year
lease subject to a break at year 5.
AC English Developments, the Chandlers Fordbased
developers, have started construction of a
new business/office scheme on Ensign Business
Park, Hamble. South Point, on a site of 0.56 hectares,
is the final development within Ensign Park and will
provide nine new business units totalling 2,917 m².
The scheme will incorporate two office buildings
totalling 633.99 m² and units between 257.89 m²
to 1,301 m² at the rear. Completion is due in the
summer of 2008.
PRUPIM have let Unit H Griffin Industrial Park,
Calmore Industrial Estate, Totton, to Technic
Electric. The 827 m² unit achieved £54,966 per
annum on a new three-year lease. The landlord is
preparing to refurbish the remainder of the estate,
totalling 15,119 m² at a cost of £1 million.
Southampton Docks
Coal Pension Properties and LaSalle Investment
Management have let Unit 24 City Industrial Park,
Southampton, to South Central Ambulance Service.
The 113 m² unit achieved £12,200 per annum or a
new lease expiring March 2012.
Southampton Docks
The Universities Superannuation Scheme Ltd have
let 6a Herald Industrial Estate, Botley Road, Hedge
Universal Marina on the River Hamble has
undergone a £4 million refurbishment to provide a
modern boatyard following the merger of Crableck
Boatyard and Universal Shipyard. The 4 hectare
yard, once owned by the Astor family, adjoins a
23.47 hectare nature reserve in the same ownership
and has backing from HSBC. The refurbishment has
provided new buildings, a boat hoist and capacity
for 249 boats.
35

King Sturge: South Coast Metrolpole 2008
Lok’n’store have acquired a 0.97 hectare site on
Third Avenue, Millbrook, Southampton, for £3
million. The vendors were Southern Engineering &
Machinery Components.
Solent Re-Use has taken a lease on Unit 4 Northbrook
Industrial Estate, Shirley. The 417 m² unit achieved
£19,500 per annum, equivalent to £46.72 per m².
The landlords were Petersfield Developments.
Waste to Energy facility, Southampton
Kier Commercial Investments have acquired the
0.91 hectare Brazier Industrial Estate on Millbrook
Road West, Southampton. The freehold industrial
investment provides 4,088 m², fully let, providing
a total income of £217,000 per annum. Tenants
include Carillion Construction, Solent Plumbing
Supplies and Covers & Linings. Kier also acquired
an adjacent freehold office building fronting Third
Avenue last year.
SEEDA, the regional development agency, has
acquired RAF Hythe, a 6.87 hectare waterfront former
military base to the west of Southampton. SEEDA
acquired the site following the de-commissioning
of the base under inter-governmental land transfer
arrangements. The acquisition ensures the site
remains in employment use, and surprised many
private sector developers who were expecting the
Ministry of Defence to market the site. The transfer,
at between £4 and £5 million, will enable SEEDA to
promote marine-related employment on the site. A
joint venture partner is likely to be sought in due
course.
Office activity
After an exhaustive search, Hampshire Constabulary
looks certain to develop its new police station on
a curious site close to the docks. The triangle site
adjacent to West Quay Road, Mountbatten Way
and Southern Road, owned by the council, will
accommodation a new 9,290 m² facility, having
previously been used as a haulage depot. The new
facility will provide 42 cells and the CID.
Freshwater Property have let the fifth and sixth
floors of Dukes Keep, Marsh Lane, Southampton
to Carnival, on a new five-year lease at £150.69 per
m². All Leisure Group Plc have also taken the 14th
floor at a similar rent.
Fairline have taken a new 15-year lease on 743 m²
of production and office space at Hamble River
Boatyard. The building provides 604 m² of workshop
space and 232 m² of offices. Fairline are paying
£70,000 per annum and will use the space to sell
their range of motorboats.
Skandia House, Southampton
Southampton Docks
Teesland IOG and HBOS have let 372 m² of
36

Grade A office accommodation in Oceana House,
Commercial Road, Southampton, to Benefex. The
letting achieved an annual rent of £80,000.
Craigard Investment have let part of the first floor
of Hampshire House in High Street, Southampton,
to chartered accountants Hayhursts. The fiveyear
lease, subject to a break clause in year three,
achieved £16,500 per annum.
Mapeley Estates have let the ground and first
floors of Grenville House, Southampton to BPP
Professional Education. BPP took a new 10-year full
repairing lease on 687 m² following a £1.5 million
refurbishment of the building. Costa Coffee have
taken the former Victory Pub on the ground floor
facing Southampton Railway Station.
Gate 4. The purchasers outbid Big Sleep, hotel
operators backed by the actor John Markovich, who
specialise in refurbishing buildings for hotel use.
The future of the building is yet to be decided.
Other activity
Hammerson, owners of West Quay Shopping
Centre, have sold a 50% share to GIC Real Estate,
the investment arm of the Singapore Government.
The £299 million disposal follows an acquisition
of 50% from developers’ joint venture funders
Barclays Bank for £240 million in 2004. GIC Real
Estate were part of a consortium that acquired ABP
for £3 billion in 2007.
West Quay, Southampton
Premier Marinas, the acquisitive marina operator
backed by Merrill Lynch, have had their planning
application to revitalise Swanwick Marina called in
by the Secretary of State. The scheme includes 50
new waterfront houses, a new pavilion, offices and
a brokerage business. Premier acquired the site
from A H Moody & Son in 2005 and subsequently
sold the boat-building business to Hanse Yachts in
Germany. The Bill Dixon-designed yachts will now
be built in Greifswald, Germany.
Zurich House, Portsmouth
Portcultis House, the former home of the Inland
Revenue in Southampton, has been sold to Cherry
Maine. The building is immediately adjacent to Dock
Hendston Properties have acquired a former school
at Church Lane, Fawley, to convert into offices.
Formerly the offices of Trant, the two period
buildings with a total area of 595 m² are available as
individual suites.
Woolworth have vacated their 2,090 m² store in
Above Bar, retaining a presence for the time-being
in Eastleigh and three sub-centres in Southampton.
37

King Sturge: South Coast Metrolpole 2008
T K Maxx, part of the £8.5 billion US operation TJX
Companies Inc, have relocated into the building,
following a surrender by Woolworth and their
lease to UBS Triton Property Fund ten years before
expiring.
Southampton has fallen from seventh to thirteenth
place in the ranking of shopping destinations in the
UK (Source: Experian). This is more to do with new
schemes coming on stream in other major centres
such as Cardiff and Newcastle than a fall in the
quality of the retail offer. However, new schemes
planned in Portsmouth and Bristol mean the
competition is increasing and Southampton does
need to continually upgrade its retail offer to stay
competitive.
Portsmouth and Gosport
Industrial Office Retail
Prime rent £83.42m 2 £204.52m 2 £1,991.34m 2
Prime yield 6.50% 6.50% 5.50%
Prospects ✓✓ ✓ ✓✓
Portsmouth
Industrial Office Retail
Prime rent £73.35m 2 £129.17m 2 £538.20m 2
Prime yield 7.00% 7.25% 6.00%
Prospects ✓✓ ✓ ✓✓
Gosport
Issues
Highcross have completed the dramatic
refurbishment of 1000 Lakeside, part of the former
IBM premises at North Harbour, Portsmouth. The
£13.8 million improvements include a new fullheight
glazed atrium fronting 25,548 m² of office
accommodation. The scheme adjoins J12 of the
M27 motorway and sits on a 40.87 hectare office
campus adjoining IBM’s retained UK headquarters.
The building provides 1000 car spaces with 6,689
m² floorplates, with Regus taking an initial 1,858 m²
at £182.99 per m².
Core Capital have acquired the former residential
facility for oncology patients in Southampton to
provide a new Addiction Clinic. The Manor House
Hospital provides 1,672 m² in an 18th-century
building and sold for £1.5 million. The 15-bed facility
is intended to be the first in a chain to rival the Priory
unit in Marchwood.
Zurich Building, Portsmouth
38

McAleer & Rushe, the Irish property developers,
have acquired Zurich House for £90 million, the
prominent 8,361 m² office building in Portsmouth,
sitting on a 0.80 hectare site. Zurich were the
vendors, following a decision to relocate to Solent
Business Park. The purchasers are proposing a
new Jury’s Inn Hotel, together with an office and
residential scheme. The developer carried out a
similar scheme in Southampton with the same hotel
operator, where it is yet to let the office element.
Raymarine headquarters, Portsmouth
A review of naval dockyards in 2007 included
Portsmouth on a list of potential closures. The dock
is now safe following a decision to build two new
aircraft carriers at a cost of £3.9 billion. This follows
news that VT is to merge its shipbuilding operations
with BAE Systems, who will take a 55% stake in
the new vehicle. The new carriers, HMS Queen
Elizabeth and HMS Prince of Wales will be in service
by 2016. Portsmouth Naval Docks will contribute
towards the project ahead of final assembly and
commissioning in Scotland. VT are expected to sell
their 45% share after 2010 to concentrate on their
business support services.
Portsmouth is celebrating the 11,613 m² relocation
of the marine electronics firm Raymarine to Durngate
Property Group’s 1.66 hectare site north of the city.
The building is under construction on the site of
the former Johnson & Johnson factory, and follows
on from the first phase of this SEEDA-instigated
development. Adjoining occupiers include Highbury
College, Sheffield Insulation and Trade Depot.
The long-awaited redevelopment of the Tricorn
Centre by Centros Miller is almost ready to start,
subject to the completion of the final compulsory
purchase order. The £350 million scheme will
provide a total of 92,900 m² to be known as Northern
Quarter. John Lewis will anchor the scheme with a
20,438 m² store, relocating from their existing store
in Southsea.
Marks & Spencer have also taken 7,432 m², providing
the development with a guarantee of success.
Traditionally Portsmouth shoppers have been very
loyal to their own retailers, and the scheme, when
completed in 2012, will provide a serious regional
rival to Hammerson’s West Quay Shopping Centre
in Southampton. As well as 80 retail shops, the
Northern Quarter includes a 150-bed four-star hotel
and 200 apartments.
The long-running saga of where Portsmouth City
Football Club finally relocate to is set to run for a
while longer. A proposal by Sellar Property Group
to develop a site adjoining the naval docks on land
to be reclaimed has received a mixed reaction.
Curiously, one major stumbling block would be
where to relocate HMS Warrior, the navy’s first
iron warship, which would sit alongside the new
scheme. Other sites under consideration include
land at the entrance to the city, adjoining the M275
39

King Sturge: South Coast Metrolpole 2008
motorway spur. Any relocation will need to be
cross-subsidised both by the redevelopment of
the existing football club at Fratton Park, and land
adjoining any newly identified site.
Tudor Bros (Properties) have sold the freehold interest
in Unit 5 Warrior Business Centre, Fitzherbert Road,
Farlington. The 376 m² unit achieved £220,000.
Ankers and Rawlings have sold 1.3 Central Point,
Kirpel Road, Portsmouth, to H Monfared Ltd for
£445,000. The 426 m² mixed office/industrial unit
provides ground-floor production space with firstfloor
offices.
Adventure College have taken a new three-year
lease on Unit 19, Fairway Business Centre, Airport
Service Road, Portsmouth. D Durow achieved
£13,500 per annum on the 165 m² unit.
HMS Warrior, Portsmouth
Market activity
SEGRO, formerly Slough Estates, have sold Unit D1
on their Voyager Park development in Portsmouth
to Clares Office Supplies. The 976 m² unit achieved
£1 million.
Kindale have sold the last two remaining units at
Applued House, Fitzherbert Spur, Farlington, to
owner-occupiers. Landview and Nightreacher have
acquired Units 2 and 4 respectively at close to the
asking price of £715,000. Both units provide 883
m².
Portsmouth historic dockyard
Portsmouth historic dockyard
40

Rok have completed a £1 million mixed-use scheme
in Cumberland Road, Portsmouth. The former Coop
Dairy site has been developed into a five-storey
building providing 64 two-bedroom apartments and
seven self-contained offices on the ground floor
totalling 8123 m².
Nucar have taken a new 10-year lease on the newly
refurbished industrial unit at Unit 1 Applied House,
Fitzherbert Spur, Farlington. Kindale achieved
£56,880 per annum on the 883 m² unit.
BST Warehouses have acquired the long-leasehold
interest in Unit 2, Dock Road, Gosport, for £825,000.
The 337 m² unit adjoining the Asda car-park produces
a rent income of circa £41,000 per annum.
TMB Solutions (186 m²) and a 210 m² unit to Kahrs
(UK). The sales follow the completion of highways
improvements to Harts Farm Way.
Dent-Art have taken a new 12-year full repairing
and insuring lease on Unit F2 Cumberland Business
Centre, Northumberland Road, Portsmouth. The 68
m² unit achieved £8,800 per annum.
SEGRO have let two units within their Railway
Triangle development in Portsmouth. Cog Ice Cream
have taken a new five-year lease on 115 m² at a rent
of £12,000 per annum. Kear have taken a 10-year
lease on 188 m² at a rent of £17,200 per annum.
Portsmouth historic dockyard
Durngate Properties have sold 21 out of 23 units on
their 4,645 m² Endeavour Business Park in Penner
Road, Portsmouth. The latest acquisitions are from
41

King Sturge: South Coast Metrolpole 2008
Bournemouth and Poole
Industrial Office Retail
Prime rent 80.73m 2 £193.75m 2 £2,152.80m 2
Prime yield 6.50% 6.50% 5.00%
Prospects ✓ ✓✓
Bournemouth
Industrial Office Retail
Prime rent 80.73m 2 £193.75m 2 £1,614.60m 2
Prime yield 6.25% 6.00% 5.25%
Prospects ✓ ✓✓
Poole
Issues
Bournemouth is to join an elite group of only four
other places in the world with an artificial surf reef.
The reef, located 2.5 km to the east of Boscombe
Pier, and taking up approximately 1 hectare, 225 m
from the shoreline, is intended to attract surfers
from all over Europe. The only other artificial reefs
are in Narrowneck, Queensland, and Cables, both
in Western Australia and Mt Managanui, New
Zealand.
Irish developers McAleer & Rushe have acquired
the St Paul’s Square site in Bournemouth from
Rok, following a decision by Rok to dismantle
their development business. The site currently
has planning permission for two office buildings
totalling 9,290 m². McAleer & Rushe intend to apply
for consent for a new Jury’s Inn Hotel on part of the
site, mirroring similar schemes in Portsmouth and
Southampton.
P.H Warr have acquired Link House, Poole, once
the home of Exchange and Mart, for a major
office refurbishment. The 3,299 m² building will be
available for occupation mid-2009.
Key Property Investments, a joint venture between
St Modwen Properties and Salhia Real Estate Co of
Kuwait, have let 1,858 m² within their office scheme
at Canford House, Discovery Court Business Centre
Poole. Bournemouth and Poole Primary Care Trust
took a new 15-year lease at an annual rent of
£168,300 with breaks in 2011 and 2018. The letting
within the 7,432 m² business centre followed the
merger of Bournemouth Teaching PCT and Poole
PCT.
Poole Harbour
Poole continues to find room for an ever-increasing
stream of new industrial developments. Space
Property, funded by Standard Life have completed a
3,530 m² scheme with ten units at Poole Trade Park.
Trade Park specialists Fix UK have also acquired 15
units totalling 3,902 m² from Chancerygate, at the
Broadstone Way Trade Centre.
Patch Properties, who acquired the Thistle Hotel in
Poole for £19 million in 2006, are proposing a major
redevelopment of site. Plans are being considered
for a new 13-storey hotel and 250 apartments on
the waterside site. The scheme could also include
retail and restaurant units. The 1.49 hectare
site is currently the subject of an environmental
scoping exercise to determine the impact of any
development on the site.
McCarthy and Stone, Bournemouth
42

Birchmere have let Building D.22 at Admiralty Park,
Holton Heath, Poole, to The Lighthouse. The 477
m² unit will be used as a non-denominational church
and achieved £25,000 per annum. Birchmere
acquired the 16.18 hectare business park in 2002
and it now has a total space of 26,477 m² with
lettings to Jigsaw Furniture, Pilkington Marine and
Media Conversion.
Bournemouth Rotunda
Market activity
The high-profile search for new premises in Poole for
Barclays has unexpectedly unearthed a site owned
by Asda. Planning permission has been granted
for a new 9,290 m² regional headquarters in West
Quay Road. The scheme is being undertaken by
Asda and their development partner Marsh Baxter,
with completion due in 2010.
No 2 Cold Harbour Business Park, Sherborne, has
been sold at a net initial yield of 5.25%. The site,
including a refurbished two-storey office building,
provides 2,958 m² with 37 car spaces. The building
is let to Aviation Training International on a 21-year
lease from June 2006 at a rent of £77,148 per
annum, equating to £95.80 per m².
TW Building (Southern) have taken a new six-year
lease on No 5 Bournemouth Central Business Park
at £6,000 per annum.
Donaldson Locksmiths Ltd have taken a new
10-year full repairing and insuring lease on Unit 11,
Burlington Arcade, Bournemouth. The shop unit
achieved a rent of £15,000 per annum.
Bournemouth Rotunda
Coffee Republic have taken a lease on a retail unit
at 9 Holdenhurst Road, Bournemouth. The 65.03
m² shop achieved £17,500 per annum on a new
15-year lease.
Dolphin Quays, Poole
43

King Sturge: South Coast Metrolpole 2008
Benridge Investments have let Unit M The Fulcrum,
Poole, to a care services company on a new 10-year
full repairing and insuring lease. The 1,069 m² unit,
part of the 10.52 hectare Mannings Heath Business
Park, achieved £80,000 per annum.
Dean Park House in Bournemouth, overlooking
Horseshoe Common, has been let to the Passport
Office and Noodle Telecom in two separate
transactions. Both tenants took 249 m² on two
separate floors of the seven-storey building at a
rent equivalent to £134.55 m².
Towergate Insurance have let the ground floor
of Forelle House, Marshes End, Poole, to the
Department for Communities and Local Government.
The 372 m² office suite achieved a rent equivalent
to £140.00 m² on a new 10-year lease.
Unit 4 Sovereign Business Park, Willis Way, Poole,
has been sold to Laser Crystal. The 315 m² unit
achieved £235,000.
Giggins have acquired the freehold interest in
Unit 9 Virage Business Park, Stanley Road, Poole,
for £490,000. The new industrial/warehouse unit
provides 415 m² of accommodation.
Zenith Services UK have taken a new three-year
lease on 105E Alum House in the Discovery Court
Business Centre, Wallisdown Road. Kay Property
Investments achieved £10,368 rising to £10,892
per annum on the 35 m² unit.
Building Civil (Solutions) have acquired the freehold
interest in the Old Dairy, Easton, for £350,000. The
302 m² office and storage facility is part let to DJB
Contractors, with BCS occupying the balance.
Sunlight Service Group have taken an assignment
of Unit 16 Willis Way on the Fleet Lane Industrial
Estate, Poole. The 541 m² unit is let until December
2009 at a rent of £29,630 per annum. Dialstat were
assignors.
The second phase of the successful Arena Business
Centre in Poole has just been completed by Mildren
Construction. The scheme at Holy Rood Close, off
Cabot Lane, accommodates 70 small companies in
units up to 121 m². Tenants include Royal Mencap,
Parker Hannifin and Dometic Marine.
Glenbeigh Developments have submitted a
planning application for 37,161 m² of new offices
and industrial units on the Ferndown Industrial
Estate. The 10.11 hectare site adjoining the A31 is
the final phase on the estate and will provide units
up to 9,290 m².
A three-storey office building at 8 Stratfield Saye,
20/22 Wellington Road, Bournemouth, has been
sold for £350,000. The 144 m² unit is let to the Port
Office at a rent of £18,600 per annum on a lease
until February 2014. The sale achieved a net yield
of 4.9%.
Willowfield Properties have let 511 Christchurch
Road, Boscombe, Bournemouth, to De Souza and
Garcia. The 132 m² retail unit is let on a new 21-year
lease at a rent of £12,000 per annum.
Office Angels, part of the Adecco Group, have taken
a new 10-year lease on 93 High Street, Poole. The
unit, redeveloped following a fire provides 80 m² of
office space and achieved £26,000 per annum.
Eberspacher, the diesel heating specialists, have
taken a new 10-year lease on three units in Liberty
Close, on the Woolsbridge Industrial Estate. The
926 m² facility achieved a rent equivalent to £72.66
m².
Dolphins Quay, Poole
44

Other commercial sectors
Fareham
Industrial Office Retail
Prime rent £80.73m 2 £212.59m 2 £968.76m 2
Prime yield 6.50% 6.50% 5.50%
Prospects ✓ ✓
Fareham
Market activity
The Mortgage Lender (MDL), a specialist broker
of mortgages to high-risk borrowers, has been
the most recent victim of the credit crunch. The
company has gone in to receivership and have
consequently vacated 4,459 m² in Forum 3, part of
PRUPIM’s development on Solent Business Park.
MDL’s holding company are seeking to sub-let the
premises.
Mission Performance have taken a new six-year
lease on office space at Lakeside Studio, Carron
Row Farm, Segensworth Road, Fareham. The suite
of 73 m² achieved a rent of £12,000 per annum.
site at 1 and 2 Smeaton Close, Segensworth, to
Sentry Self-Storage. The lettings achieved £45,000
per annum on a new 10-year lease.
Meon View Estates have let an office suite of 114
m² within The Roundel, St Clairs Farm, Droxford.
One2create took a lease with five car spaces at an
annual rent of £12,000.
Barrett Europe, part of the Australian radio
communications group Barrett Communications,
has acquired Unit 9 Victory Park, Fareham. The
284 m² office suite achieved £655,000. Eleven of
the fourteen units built by UK office park specialist
Business Homes have now been sold in the scheme.
Barrett joins solicitors Lawcomm and estate agents
Beals on the park.
In Fareham, 126 West Street has been let on a new
six-year full repairing and insuring lease. Phoenix
House took a lease at a rent of £18,250 per annum
subject to a three-year break-clause.
Adecco UK have let offices at 2 East Street,
Fareham, to First People Recruitment. The 81 m²
office achieved £8,750 pa on a new 4.5 year lease.
Australian investors Stockland Halladale have let
a women-only gymnasium to H30 at Locks Heath
Shopping Centre in Fareham. The tenants have
taken a new 10-year lease on the 194 m² first-floor
premises at a rent of £19,250 per annum, equivalent
to £99.25 per m². The letting followed a surrender
by the previous gym operator Busy Bodies.
Building Monitoring Services have acquired the
long-leasehold interest in Royal House, a twostorey
business unit near Fareham. The 223 m² unit
sold for £290,000 with the occupier relocating from
Crescent House, Eastleigh.
Unit 1 Funtley Court, Fareham, has been let on a
new six-year lease subject to a three-yearly review
at £6,700 per annum. Mobite Money took the 45
m² office unit from landlord Hitchcock Management
Services.
Hampshire County Council have let a 0.29 hectare
45

King Sturge: South Coast Metrolpole 2008
Winchester
Industrial Office Retail
Prime rent £91.49m 2 £247.57m 2 £1,776.06m 2
Prime yield 6.50% 6.25% 5.00%
Prospects
Winchester
Issues
Nothing happens quickly in Winchester, and in the
medieval city centre the pace of change can seem
positively glacial. However, Thornfield Property
have now finally received planning permission to
redevelop the run-down Silver Hill area, to provide
9,290 m² of retail and leisure space in 14 units.
The scheme includes a 2,787 m² foodstore, 260
apartments, 2,044 m² of offices, a medical centre
and bus station. A successful development may
require a compulsory purchase order to buy in third
party ownerships within the site. This includes land
owned by London & Henley, who own the Brooks
Shopping Centre and have in the past promoted a
rival scheme.
St Thomas’ Passage, Winchester
The UK’s largest planetarium opened in Winchester
at Easter 2008. INTECH’s Science Centre provides
a state of the art 176-seat theatre allowing visitors
to explore the know universe through a high tech
system of projectors and sound systems. The
centre opens following a grant from the regional
development agency, SEEDA.
The owners of the Bar Offices at Barton Farm,
Winchester, have let the converted farm buildings
to English Courtyard Developments. The 232 m²
office complex with 26 car spaces achieved a rent
of £40,000 per annum on a new six-year lease.
King Alfred statue, Winchester
Maple House Investments have let Units 5 and
6 Moorside Place, Moorside Road, Winnall,
Winchester, to Hampshire County Council. The
units provide 967 m² of office space with 19 car
spaces, and have been let on a new 15-year full
repairing and insuring lease at a rent equivalent of
£113.00 per m².
46

Dutton Gregory have taken the third floor of St
George’s House, St George’s Street, Winchester.
The 213 m² office suite achieved £35,603 per
annum on a new 10-year lease subject to a fiveyear
break clause.
Kenmore Homes, the Winchester-based residential
developer, has been acquired by Highcross Strategic
Advisors, and re-branded Highmore Homes.
Established in 2001, the company has offices in
Winchester, Essex, The Midlands and Scotland.
Highmore Homes has a pipeline with a projected
turnover of £100 million in 2007/08.
Production of the Vermouth Martini moved back to
Italy in 2006.
Belfast based investor Deramore Holdings has
acquired the freehold interest in 12-15 High Street,
Winchester, from British Land, for £11.25 million.
The 4,702 m² Debenhams store is let on a lease
expiring in March 2034 at £538,445 per annum.
Maple House Investments have let Unit 2, Moorside
Place on the Winnall Industrial Estate to Cinewessex,
as their new production headquarters. The 433 m²
unit with nine car spaces achieved £46,900 per
annum on a new 15-year lease. The tenants have
an option to acquire the freehold interest within the
first two years.
Paul Tanner Associations have taken an assignment
of the first and second floors of 50 St George’s
Street, Winchester. The 38 m² suite is let at £7,000
per annum on a lease from September 2004.
Winchester
11 Bridge Street, Winchester, has been let to
Redwood Health Therapies on a new 10-year lease
at £18,000 per annum.
Winchester Cathedral
Market activity
Bacardi have moved their UK offices to Royal
Court, Kings Worthy, near Winchester, following
the closure of their bottling plant in Southampton
Docks. The plant primarily produced the alcopop
Bacardi Breezer, which has seen a fall in popularity.
Colin Bashford Associates (CBA Trees) have taken
a new five-year lease at Apex House, The Apex
Centre, Colden Common, Winchester. The twostorey
suite of 165 m² with 10 car spaces achieved
£25,000 per annum.
Keyhaven Land (Winchester) have sold the freehold
interest in Unit 3 Northgate Chambers, Staple
Gardens, Winchester, to Tax Innovation. The 157 m²
office block achieved the equivalent of £240 m².
47

King Sturge: South Coast Metrolpole 2008
Salisbury
Industrial Office Retail
Prime rent £78.03m 2 £161.46m 2 £1,291.68m 2
Prime yield 6.75% 7.00% 5.00%
Prospects ✓
Salisbury
Issues
The future of Salisbury is currently the subject
of a major consultation exercise following the
publication of ‘Salisbury Vision’ a joint initiative
to focus on regeneration over the next 20 years
by SWRDA and the city council. The areas under
consideration include the Maltings, Market Place
and Guildhall Square in the centre and Southampton
Road and the rather tired Churchfields Industrial
Estate. This estate has poor infrastructure, but
without the allocation of a major employment site
elsewhere in the city, any meaningful regeneration
looks doubtful.
Winchester Cathedral
Environtech Properties have let 12 Southgate
Street, Winchester, to Tin Roof Images,at £6,750
per annum. The second-floor offices provided 38
m² of accommodation.
Salisbury Cathedral
Salisbury Council have granted planning permission
for a major new sports and leisure facility on the
A303 at Solstice Park, Amesbury. The scheme
will sit alongside a new Holiday Inn hotel and two
speculative office developments at The Crescent.
The Nick Holmes Leisure complex includes five-aside
football pitches, tennis courts, dance studios
and a conference facility.
Market activity
Dean & Dyball, forward-funded by Standard Life
Investments, have let a new 4,088 m² Court facility
48

to Her Majesty’s Court Service (HMCS) in Salisbury.
HMCS will take a new 30-year full repairing and
insuring lease on the £18 million scheme in Wilton
Road, Salisbury. Dean & Dyball Construction are
undertaking the specialist building works scheduled
for completion in April 2009.
Nurse Plus and Carer (UK) have taken a new sixyear
lease on Unit 10, Centre One on the Old
Sarum Business Centre, Salisbury. The 113 m² unit
achieved £10,500 per annum.
Unit 4, Centre One, Old Sarum, Salisbury has
been sold to PM Total Maintenance. The industrial/
warehouse unit totalling 185 m² achieved
£165,000.
Unit 212, The Beacon Centre, Solstice Park,
Amesbury, has been let at a rent of £13,750 per
annum. City Link Builders Ltd have a new 5 year
lease on the 173 m² industrial unit.
Salisbury Law Courts
Panasonic have taken a new 10-year lease on a
98 m² retail unit in Cross Keys Shopping Centre,
Salisbury. The unit achieved £28.500 per annum
following a surrender of an existing lease to Ricara.
Trethowans, the legal practice, have agreed a prelet
at Danescroft’ Office Park on London Road,
Salisbury. The 1,997 m² office building achieved
£172.22 per m². Two further lettings of 464 m²
and 743 m² respectively have been completed.
Trethowans have moved from two listed buildings
within the city centre.
W. Mundy & Son have acquired the freehold
interest in Unit 6, Centurion Centre, Castlegate
Business Park, Salisbury. The 399 m² industrial unit
overlooking Old Sarum Airfield achieved £272,000.
Glenmore Commercial Estates have let Unit 6
Glenmore Business Park, Churchfields Industrial
Estate, Salisbury, to Ace Office Supplies Ltd. The
191 m² industrial unit achieved £14,650 per annum
on a new 10-year lease subject to a five-year breakclause.
Wiltshire County Council have sold Denton Business
Park for £1.5 million to the Wilton Estate. The
investment produces £110,000 per annum from
five sub-divided units totalling 3,372 m² on a site of
6.3 hectares.
Forey Motor Group have taken a new 10-year lease
on Unit 4 Netherhampton Business Centre. The 607
m² unit achieved £29,000 per annum from landlord
London & Lincoln Properties.
Denman Electrical Wholesales have taken a new
10-year lease on Unit 3, Hi-Tech House, Brunel
Road, Churchfields Industrial Estate, Salisbury.
The 284 m² industrial unit achieved £20,000 per
annum.
49

King Sturge: South Coast Metrolpole 2008
Havant and Waterlooville
Industrial Office Retail
Prime rent £78.04m 2 £182.99m 2 £592.02m 2
Prime yield 6.75% 7.00% 5.50%
Prospects ✓
Havant and Waterlooville
Closewood Air Conditioning have sold No 5 Lancer
House, Hussan Court, Westside View, Waterlooville,
to Compass Wealth Management Consultants.
The 217 m² unit on the Brambles Business Park
achieved £225,000 on a 125-year ground lease with
111 years unexpired.
Market activity
Seaward Properties have completed their £16
million development at Havant Retail Park, funded
by the Royal Bank of Scotland. The new scheme,
close to the M27 motorway, comprises seven
units, with tenants including Wickes, Aldi, KFC, The
Carphone Warehouse and DSG Group.
BAE Systems Technology Park is now fully let
following the letting of 532 m² of refurbished offices
to Integrity Financial Solutions. The tenant took a
new five-year lease at a rent of £62,942 per annum,
joining existing occupiers, Autoliv, G7 Computer
Services and CS & S Logistics and Information
Systems.
Rok’s £9 million Dakota Park in Havant is nearing
completion. The 7,432 m² two-phase industrial
scheme achieved an initial freehold sale of 1,579.32
m² to Formaplex, with a further six units ranging
from 313 m² to 383 m².
8/9 Queens Parade, Waterlooville, has been let on
a new 15-year lease at £50,000 per annum. The
Larger London Land Co let the retail unit with a total
area of 623 m².
Street Art, Havant
Glanvilles, the solicitors, have taken a new 10-year
lease in Block 100, Langstone Gate in Havant. The
scheme owned by Chichester-based Seaward
Properties, is multi-let. Glanvilles will occupy 487
m².
50

Isle of Wight
Industrial Office Retail
Prime rent £69.96m 2 £177.61m 2 £753.48m 2
Prime yield 7.00% 7.00% 5.50%
Prospects ✓ ✓
Isle of Wight
Issues
The island continues to attract investment in both
the commercial and residential sectors, and is
rapidly shedding its slightly shabby appearance,
re-emerging in some areas as a cool, chic and
upmarket place both to live and work.
regeneration project, where planning permission
has been granted to 550 new dwellings, a health
centre, 10,500 m² of marine employment and
a maritime museum. A residential developer is
about to be announced for the first phase out of
a shortlist of two, and an application for a new
marina is scheduled before the end of 2008. The
construction of a new 10 m hoist dock and crane
on the waterfront has gone some way to giving the
site credibility as a site for new marine projects. The
hoist can lift and launch up to 70 tonnes and will be
used for both one-off racing yacht projects and by
Vestas, the Danish-owned wind vane manufacturer,
who have a facility on the site.
East Cowes
Pimento Group have successfully completed their
mixed residential, office and retail scheme at No
1 The Parade, in West Cowes. The 19-apartment
scheme has seen record sales for the island with
one of the penthouse apartments achieving £1.2
million. The group have also acquired an office and
industrial site in East Cowes, adjoining Barratt’s new
550-unit residential scheme in Whippingham. The
waterfront site will be developed as a high quality
business park.
Red Funnel, West Cowes
A major coup this year is the attraction of Waitrose
onto the island, anchoring the redevelopment of
East Cowes town centre. The retailer intends to
open a 2,973 m² store together with a new Town
Square and retail units on part of the former GKN
works in 2010. This will help accelerate this major
Liz Earle, the successful Isle of Wight-based
cosmetics company, has relocated to a new
3,252 m² office and call centre in Ryde. John Peck
Construction completed the £4 million project in the
autumn of 2007.
Infracapital Partners, the infrastructure fund of
Prudential, have acquired ferry operator Red Funnel
for around £200 million. The deal should provide
Red Funnel with the financial leverage to invest in
51

King Sturge: South Coast Metrolpole 2008
further expansion of their passenger and vehicle
service from Southampton to Cowes, including
larger vessels. The deal follows an acquisition by
Bank of Scotland and the management team in 2004
for £100 million from J P Morgan Private Equity.
will provide a 70-bed nursing home, 50 cottages
and 44 apartments. The concept also includes
access to 24-hour support, retail and leisure units.
Construction is expected to commence in 2009.
A major residential scheme is planned for the Pan
area of Newport. Miller Homes have been appointed
to deliver up to 1,200 new homes on the 18.79
hectare site between Staples Road and Pan Lane.
The development is being overseen by the Isle of
Wight Council and Western Challenge Housing
Association. The initial phase, which includes
management of the wooded valley on the estate
will provide 560 private homes and 240 affordable
units.
Wightlink is building the next generation of
car ferries to ply the route between Yarmouth
and Lymington. Two further vessels are under
construction to replace the ageing fleet currently
in service. The new vessels, being built in Croatia,
will accommodate 360 passengers and 60 cars and
take up service in the summer of 2008.
East Cowes
East Cowes
The first phase of the regeneration of Island Harbour
Marina on the River Medina is nearing completion.
The scheme, 2 miles upstream of Cowes includes
over 200 berths, a restaurant, retail units and 48
new homes. Planning permission is being sought
by Island Harbours for a second phase to include
a hotel and conference facility and additional
housing.
Planning permission has been granted for the
first Care Village on the island at Scotland Farm,
Godshill. The scheme, promoted by Tresslewood,
52

Weymouth
Industrial Office Retail
Prime rent £70m 2 £156m 2 £720m 2
Prime yield 6.25% 6.50% 6.00%
Prospects ✓ ✓
Weymouth
The remarkable success of Weymouth as a location
continues to astound everyone. Once written off as
a fading seaside resort which the Navy abandoned,
the town is now thriving and there is plenty to be
cheerful about. The Isle of Portland is the location
for all the 2012 Olympic sailing events, and with a
full diary of pre-Olympic events the port is rapidly
becoming a centre of excellence for the world-class
sailing regattas.
Sailing Academy, Portland
Even the harbour entrance is set for a makeover
with plans completed for a regeneration of the 4.05
hectare Weymouth pier area to include housing,
a new marina, hotel and heritage-centre. Howard
Holdings are the appointed developer.
Weymouth Harbour
In Weymouth itself, New Look, the national retailers
who started business in the town, have received
planning permission for a new headquarters office,
together with 7,300 m² of non-food retail, a hotel,
enterprise zone and medical centre.
53

King Sturge: South Coast Metrolpole 2008
Contacts
King Sturge
Latimer House
5-7 Cumberland Place
Southampton
Hampshire SO15 2BH
Tel: 023 8023 2882
Fax: 023 8023 2684
E-mail: “firstname.surname”@kingsturge.com
PARTNER IN CHARGE
Direct dial
Michael Green 023 8038 5613
AGENCY & DEVELOPMENT
Michael Green 023 8038 5613
Nik Cox 023 8038 5611
Matthew Poplett 023 8038 5621
Simon Keefe 023 8038 5612
PROFESSIONAL
Malcolm Barber 023 8038 5605
Steven Farndell 023 8038 5620
Peter Davy 023 8038 5617
Tom Bayley 023 8038 5632
BUILDING CONSULTANCY
Simon Nicholls 023 8038 5622
Mark Trewin 023 8038 5607
David Bassett 023 8038 5610
Kerry Sutherland 023 8038 5618
RESIDENTIAL
Emma Eaglestone 023 8038 5606
Diana Ayles 023 8038 5631
Roger Boxell 023 8038 5627
Kara Donohue 023 8038 5625
Rosie Moore 023 8038 5628
MANAGEMENT
Edward Martin 023 8038 5623
Suzanne Longhurst 023 8038 5633
Britt Cox 023 8038 5626
All data contained in this report has been compiled by King Sturge LLP and is published for general information purposes only. While every effort has
been made to ensure the accuracy of the data and other material contained in this report, King Sturge LLP does not accept any liability (whether in
contract, tort or otherwise) to any person for any loss or damage suffered as a result of any errors or omissions. The information, opinions and forecasts
set out in the report should not be relied upon to replace professional advice on specific matters, and no responsibility for loss occasioned to any person
acting, or refraining from acting, as a result of any material in this publication can be accepted by King Sturge LLP.
© King Sturge LLP April 2008
This publication is printed on recycled, post-consumer fibre, totally chlorine free paper produced from sustainable stock. FSC certification.
54

Notes
55

King Sturge: South Coast Metrolpole 2008
Notes
56

LOCATIONS
UK
England • Scotland • Wales
King Sturge LLP
Part of the King Sturge International Group:
THROUGHOUT EUROPE
including:
Belgium • Croatia • Czech Republic • France • Germany • Greece • Hungary
Ireland • Italy • Luxembourg • Netherlands • Poland • Romania • Russia
Serbia • Slovakia • Spain • Switzerland • Turkey
THE AMERICAS
A member of
ASIA PACIFIC
www.kingsturge.com
+44 20 7493 4933