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A Look Back
It has been a tough few years for Crawley/Gatwick, with the Airport and supporting businesses hit particularly hard during the pandemic. Still, an impressive 189,000 sq ft has been leased in the past 12 months, representing the market's best take-up return for some time.
This level of take-up, combined with some obsolete offices being sold for alternative use, has helped reduce the substantial oversupply of office product seen in Q1 2022 (about half a million sq ft) to a more acceptable level of circa 160,000 sq ft for Grade A/New.
Notable transactions have included Schlumberger's downsize to c.54,000 sq ft at Minerva, Nestle's commitment to take c.40,000 sq ft at Park House, Bramble Energy acquiring Atrium Court (34,000 sq ft) and Dolby Vivisol's acquisition of 22,500 sq ft at Palladian. Interestingly, these transactions are in out-of-town locations, demonstrating that the broader trend of city centre offices does not apply to all markets. Whilst take-up has been encouraging, a prime rent above £30.00 is yet to transact.
A Look Forward
With professional services firms significantly reducing office footprints, there is uncertainty over where the large requirements will come from. Still, Crawley/Gatwick consistently demonstrate that it is a market that can attract larger occupiers.
As prime rents have not increased significantly, it makes refurbishment and repositioning of older / Grade B or C office schemes more challenging. Prime headline rents in the mid and high £ 30.00's at the Council's Create building have been discussed but not yet secured, while RLAM's refurbishment of c.30,000 sq ft at 2 City Place Gatwick will seek to achieve that £30.00psf+ headline rent not yet seen.