RETAIL WAREHOUSES CONTINUE TO SHOW GROWTH
Office Parks, over the six months to November, saw very little movement in rental values with almost half of the regions monitored experiencing no change. Consequently, over the year, office parks overall only saw a 1.3% rise in rental values. The most substantial movement over the half year was recorded in the North West, with 2.2% growth. Only three regions saw any yield movement over the six month period - the greatest being a 0.2 of a percentage point fall in Scotland.
In contrast to most of the property market, retail warehouses are showing substantial rental value growth. Indeed, over the half-year to November, the growth rates showed a marginal increase compared to the previous period, producing almost 11% growth over the year. This has been due to large increases in just three regions. With the exception of Scotland, all regions experienced falls in their yields over both the six month period and the year.
Rental value levels in market towns saw a very marginal increase during the six months to November whilst high bay warehouses experienced an increased rate of rental value decline. Yields were unchanged for both sectors, from May 1995.
DEFINITIONS :
Hillier Parker uses the following definitions in producing the Average Yields and Rent Indices in the following tables :
OFFICE PARKS
Offices with B1 planning consent, situated outside town centres and often situated in 'park' schemes. Our definition covers all major out-of-town developments, both free standing and in parks.
Size: Over 930 sq m (10,000 sq ft)
Height: Two or more storeys
Parking: At least one space to 18.5 sq m (200 sq ft) (net)
Sample: 85 locations
RETAIL WAREHOUSES
(a) A building with modern specifications from which a wide variety of bulk goods (including DIY, carpets etc) are sold.
(b) Gross floor space of 930 sq m (10,000 sq ft) or more with a car parking ratio of at least 5 spaces : 93 sq m (1,000 sq ft) gross.
(c) Each building must be well situated, having main road frontage and with a catchment population of 50,000 people or more.
MARKET TOWNS
(a) The market town must have between 4 and 15 multiples.
(b) Shops to have had a rent of less than £20,000 in 1982.
(c) The town to be outside a major conurbation.
(d) Have 12% or more of male population with a higher education qualification (in order to eliminate small and industrial towns).
HIGH BAY WAREHOUSES
(a) 9,300m2 (100,000 sq ft) floor area
(b) 10m eaves height (30 ft)
(c) Site cover of 45% or less
RENT INDEX
6-month Annual
Change Change
Nov May Nov Nov- May May- Nov Nov- Nov
94 95 95 94 95 95 95 94 95
Office Parks 116 117 117 0.5 0.7 1.3
Retail Warehouses 180 189 199 5.0 5.5 10.8
Market Towns 264 263 263 -0.2 0.1 -0.1
High Bay
Warehouses 105 104 102 -1.0 -1.9 -2.9
AVERAGE YIELDS
Yield Movement
Nov May Nov May Nov- May May- May
93 94 94 95 94 95 94 95
Office Parks 7.7 7.7 7.8 7.8 0.0 0.1
Retail Warehouses 7.0 7.3 7.4 7.2 -0.2 -0.1
Market Towns 7.0 6.7 7.6 7.6 0.0 0.9
High Bay Warehouses 6.3 6.5 6.8 6.8 0.0 0.3
RENT INDEX
6-month Annual
Change Change
Nov May Nov Nov- May May- Nov Nov- Nov
94 95 95 94 95 95 95 94 95
Office Parks 116 117 117 0.5 0.7 1.3
Base (May 1989=100)
London 77 77 78 0.5 1.1 1.6
South East 85 87 87 1.9 0.7 2.6
South West 95 95 95 0.0 0.0 0.0
East Anglia 81 81 81 0.0 0.0 0.0
East Midlands 184 186 187 1.0 0.5 1.5
West Midlands 122 123 125 1.2 1.4 2.6
Wales 144 142 142 -1.9 0.0 -1.9
North West 107 107 109 0.0 2.2 2.2
Yorks & Humbs 117 117 117 0.0 0.0 0.0
North 140 142 145 2.0 1.9 3.9
Scotland 124 126 126 1.4 0.0 1.4
Retail Warehouses 180 189 199 5.0 5.5 10.8
Base (May 1986=100)
London 174 178 188 2.2 5.6 8.0
South East 178 181 197 1.5 9.0 10.6
South West 169 173 183 2.3 5.8 8.2
East Anglia 172 170 179 -0.9 5.3 4.4
East Midlands 202 202 219 0.0 8.1 8.1
West Midlands 201 240 248 19.1 3.4 23.2
Wales 145 147 153 1.3 4.4 5.8
North 206 222 232 7.8 4.5 12.7
Scotland 225 230 239 2.5 3.7 6.3
Market Towns 264 263 263 -0.2 0.1 -0.1
Base (May 1984=100)
High Bay
Warehouses 105 104 102 -1.0 -1.9 -2.9
Base (May 1990=100)
AVERAGE YIELDS
Yield Movement
Nov May Nov May- Nov Nov- Nov
94 95 95 94 95 94 95
Office Parks 7.7 7.8 7.8 0.0 0.1
London 7.8 8.0 8.1 0.1 0.3
South East 7.4 7.6 7.6 0.0 0.2
South West 7.7 7.7 7.7 0.0 0.0
East Anglia 7.7 7.8 7.8 0.0 0.1
East Midlands 8.0 8.0 7.9 -0.1 -0.1
West Midlands 7.9 7.9 7.9 0.0 0.0
Wales 7.8 7.8 7.8 0.0 0.0
North West 7.7 7.8 7.8 0.0 0.1
Yorks & Humbs 7.7 7.8 7.8 0.0 0.1
North 8.9 8.9 8.9 0.0 0.0
Scotland 7.5 7.7 7.5 -0.2 0.0
Retail Warehouses 7.3 7.4 7.2 -0.2 -0.1
London 7.9 7.9 7.7 -0.2 -0.2
South East 7.1 7.1 7.0 -0.1 -0.1
South West 7.3 7.3 7.1 -0.2 -0.2
East Anglia 7.1 7.1 6.9 -0.2 -0.2
East Midlands 7.1 7.1 6.8 -0.3 -0.3
West Midlands 7.4 7.4 7.3 -0.1 -0.1
Wales 7.4 7.4 7.3 -0.1 -0.1
North 7.5 7.5 7.3 -0.2 -0.2
Scotland 7.1 7.4 7.6 0.2 0.5
Market Towns 6.7 7.6 7.6 0.0 0.9
High Bay Warehouses 6.5 6.8 6.8 0.0 0.3
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information please contact Alan Patterson on 0171 629 7666 extension 2376 or write to him at Hillier Parker , 77 Grosvenor Street, London W1A 2BT.
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