In our latest office market update we focus on Watford – the anomaly in the current north-west M25 office market.
The market for office accommodation in the region is muted with little activity both in terms of disposals or acquisition of space in the occupational sector and relatively little activity in the investment sector. Supply is for the most part restricted due to the impact of Permitted Development Rights, the absence of new build projects, coupled with relatively strong levels of take up prior to the end of 2016. Balanced against this in many locations demand has been relatively constrained as a consequence of uncertainty about economic direction and trading conditions. As yet this approximate balance and the absence of competitive pressure on both the demand and supply side has kept rents relatively stable.
Gloom and doom aside, Watford is one location that has bucked this trend and like the town’s football team, the time has come for it to enjoy its moment in the spotlight.
Our Business Space Team has taken a look at office market activity in the town including the first real speculative development in 16 years and how it is meeting the needs of the millennial workforce …….Watford – Home of TJX New HQ
In the last 24 months two substantial lettings took out most of the remaining office stock in Watford leaving just 17,000 sq. ft. available in a single building on the edge of the main commercial district. Going forward, within the town there is development taking place in the form of TJX’s new bespoke HQ opposite Watford Junction which will be linked into two adjoining buildings, both of which TJX have interests in.Speculative office development
Elsewhere, demolition of Gresham House (53 Clarendon Road) has set the stage for delivery of Watford’s first new town centre speculative office building (disregarding 36 Clarendon Road which was let shortly after commencement of construction) for sixteen years. Interestingly the originally consented scheme for this site incorporated a substantial residential element, but its new owners felt a wholly commercial scheme was more suited to the site and would capitalise on the current and predicted lack of supply of new grade ‘A’ stock in the medium term. Whilst this building will provide welcome supply in early 2021 it will not address the current space famine.