Pharmas head to Valley

The region is seeing low availability of office units coupled with growing demand, particularly from pharmaceutical companies.

This marks a recovery for offices in the zone west of London, which saw a downturn in 2001.

A new report from property agent King Sturge said the office vacancy rate in the Thames Valley was falling. It has reached just 10.6%, compared to 11.6% 12 months ago.

Mairéad Foley, senior office market analyst at King Sturge, said that while the Valley was a traditional home for technology, media and telecoms tenants, it was becoming a favourite of pharmaceutical firms. "They're being attracted by lower rents, good locations and high quality space."

The pharmaceutical sector single-handedly accounted for 35% of the total floorspace taken during the fourth quarter of 2005. Pharmaceutical firms have until now converged around the M40 and Cambridge area, Foley added.

They’re being attracted by lower rents, good locations and high quality space

Mairéad Foley, senior office market analyst, King Sturge

Overall, take-up increased in the fourth quarter of 2005 to 47,750m2 from 39,450m2 in the previous quarter, the King Sturge report found.

The size of individual transactions in the area is also on the rise. The research found that the average size of units taken over the fourth quarter of 2005 increased to 2,400m2. The year ended with a number of large transactions taking place during the quarter. A massive 57% of take-up was for units of between 5,000-10,000m2.

Foley said the positive performance of the market segment was expected to continue throughout 2006.

Areas to watch in the Thames Valley in the future are Maidenhead, Uxbridge, Hammersmith, Chiswick and Richmond, she said.