Space Race: Expanding premises focus attention on Workspace

Operations managers in south-east England with plans to expand will have their eyes on Workspace, the leading supplier of space to English small businesses with 6 million square feet under management to 3,000 tenants.

At its annual general meeting on Tuesday (1 August), Workspace, a ({@denom})146-million ( ({@denom})237-million) company is set to announce a long-trailed range of 'add-on services' to attract customers. Not that they need to. Analysts at Teather & Greenwood found that Workspace's occupancy was running at a healthy 92% rate while demand remains strong and rents are rising.

Last year, occupancy rates never topped 89%. The company will also give its outlook for the south-east and midlands business rental markets, which will be keenly watched to see whether rental growth will continue at 1999 rates.

Workspace's average rents in its 'core' portfolio rose 5% last year from ({@denom})5.69 per square foot to ({@denom})5.98, with the principal increases found in London and south-east England.

Prospects for space-letting in the region have become hard to predict since April when the Fairview Holdings' management team abandoned a buy-out bid partly because of increasingly soft and uncertain housebuilding market conditions in the Greater London area.

They said they put off the bid until the autumn when hopefully greater certainty and stability will prevail. Across the UK, the new Industrial Floorspace survey by property consultants King Sturge finds that total premises expanded by 1% in England and Wales in the first half of the year - a nominal increase of 160,000 square metres to 11.568 million.

In the regions South East England showed a rise of 1% South West and Wales up 3%, East Midlands up 8%, West Midlands down 3%, North West up 10%, Yorkshire and Humberside down 7%, North up 2%.

Interestingly, King Sturge analysts identify a 'new economy' phenomenon: the relocation of communication-hungry companies to areas with the best fibre-optic networks. Historically, just as spinning mills were located alongside water and distribution parks are developed alongside motorways, so the new economy will locate alongside telecommunications infrastructure, says King Sturge. As digital TV takes off, more and more web content will be delivered in video form, and it is likely that this will transform the expectation of net users and place huge demands for bandwidth. It may be that 'on fibre' may become much more important.