In Exeter the oversupply of out-of-town offices diminished in the first part of 1998 following strong demand in 1997.
This year will see the construction of a major pre-let office building at Exeter Business Park, along with other similar facilities. These developments follow the construction of a new Bass public house and Holiday Inn Express on this prominent site, adjacent to the M5's new junction 29.
The city centre office market has seen good demand in the prime area of Southernhay, with a steady increase in rents during the middle and latter part of last year. Prime ground floor space with a frontage to Southernhay is again achieving £129/sq m (£12/sq ft). Larger, less prominent areas in modern buildings are available at rentals of £86-£97/sq m (£8-£9/sq ft).
In Plymouth there has been patchy demand: the major deals have been for strategically located accommodation. There is a shortage of quality properties in the market. However, the city is proving attractive as a location for call centres and several organisations are considering buildings of 3,700-14,000 sq m (40,000-150,000 sq ft).
Outside Exeter and Plymouth, the office market is confined to small suites in semi-rural locations. These have proved popular with those who wish to avoid the congestion of cities and enjoy the quality of life that the Countryside offers, while taking advantage of modern communication. Mamhead House near Exeter is a typical example of quality space of this type.
Meanwhile, the takeover of London & Manchester by Friends Provident and Weslyan's proposal for the former Medical & Sickness space at Pynes Hill in Exeter could bring two major areas of office accommodation on the outskirts of the city into the market.
In addition, both Exeter and Plymouth are competing hard to attract the Regional Development Agency to locate in their cities.
Industrial supply has reduced dramatically throughout the county with a steady take-up of secondhand space, following record take-up in 1997.
The result of this is strong demand for design-and-build facilities, where the county is well placed with a good supply of development land.
At Matford Park in Exeter, Double Glazing Supplies has had a unit completed, Tile Flair is on site and a planning application is awaiting approval for a 7,897 sq m (85,000 sq ft) Car Land dealership.
Sowton 30 Exeter is a new development by John Laing Property of 7ha (17 acres) for B1, B2 and B8 use, adjacent to the M5's junction 30. It will be developed in two plateaus, to accommodate up to 26,500 sq m (285,000 sq ft). Main road positions are in strong demand, with rents of £65/sq m (£6/sq ft) being achieved on existing space. New space may command even higher figures.
Throughout Devon there has been a steady improvement in the market for industrial space.
At Barnstaple, Priority Sites has constructed two 930 sq m (10,000 sq ft) speculative units at Roundswell, providing much needed quality space for local companies. In Plymouth, Cattedown Regeneration is undertaking a scheme to produce two separate 2.4ha (6 acre) sites with a total of 15,027 sq m (161,750 sq ft) of commercial space. These include a cash and carry, a builders' merchant and 1,347 sq m (14,500 sq ft) of non-food retail.
The outlook for 1999 is good for new build industrial and out-of-town pre-let office schemes. Demand for high street retail space has continued to be exceptional, with the number of registered requirements in both Exeter and Plymouth probably at an all-time high.
Major developments are planned for both cities' centres. In Exeter, Land Securities' £80m scheme in Princesshay will provide much needed new shopping in the city centre.
Major local businesses have backed the proposal, viewing it as a good opportunity to enhance the city's regional position.
In Plymouth, P&O Properties applied for an undercover shopping mall last year. It is due to unveil updated plans after consultation with the city council.
There have been some major transactions in the county over the past 12 months, with Dawnay Day purchasing a 12,080 sq m (130,000 sq ft) office investment at Southernhay Gardens in Exeter, from National Mutual. Smaller investment lots have moved quickly. Investors have cash available for both fully-let and partly-let space, ready to take advantage of an improving market.
Ralph Collison, Partner, Alder King