Guildford is booming thanks to town centre regeneration schemes, but a shortage of top-quality office space could become critical, says a sector specialist at property consultancy Vail Williams.
Luke Storey, part of the firm’s Western Corridor Agency team, says Guildford is benefiting from ongoing mixed-use and residential developments transforming it from a market town to a modern, amenity-rich environment.
However, limited prime office supply and rising occupier demand mean rents will continue to rise until more stock becomes available via the investment pouring into the heart of Guildford, which will shape the next phase of market activity.
Luke said: “Across Guildford and neighbouring Woking, office availability has fallen to 45% below the five-year average, with less than 250,000 sq ft available in total. In central Guildford, the squeeze is even tighter.
“There is very little new-build Grade A office space in Guildford’s pipeline, and much of the existing stock is dated and under pressure to modernise or convert.
“Prime office vacancy is now below 5%, with warnings that choice is becoming critically limited for businesses seeking well-located workspace.
“It is crucial that future schemes deliver modern office accommodation, and the market will now look to see whether further speculative office development can be unlocked to help alleviate the growing demand.”
Luke cited several key deals that have underlined the strength of demand, particularly for well-located, modern and sustainable office environments.
These include DTRE’s Grade A refurbishment of Bottle Works – the former site of milk giant Unigate’s depot – which is already 60 per cent pre-let and generating record rents, and Solum’s £150million Guildford Station Quarter project of 430 homes, 20,000 sq ft of office, complete with a new transport interchange, shops and public plaza.
Also, the former Debenhams site is now being redeveloped as the £125 million St Mary’s Wharf scheme which will deliver 183 riverside homes, new retail and cafés overlooking the River Wey, and the North Street development is set to transform a neglected area through 477 sustainable homes, new public areas and facilities.
Luke continued: “These regeneration efforts are having a ripple effect on Guildford’s office market. Improved public realm, new pedestrianised streets, riverside cafés and a growing central population are helping to create the kind of ‘live-work-play’ environment that increasingly appeals to employers – especially in the tech, gaming and professional services sectors.
“As new homes rise overlooking the River Wey, the accompanying rise in footfall is supporting a more active café and retail culture throughout the day.
“This is enhancing the quality of life for office workers and giving occupiers more reasons to base themselves in the town centre. Rather than commuting out or relying on out-of-town business parks, Guildford is reasserting itself as a self-contained business destination.”
He added: “It’s no surprise that occupiers are prepared to pay a premium for central space. With prime office space in short supply and occupier appetite continuing, rental growth is expected to continue, particularly for best-in-class space.
“The record rent achieved at Bottle Works follows similar upward pressure on headline rents in nearby schemes like One Farnham Road and strong pre-letting at the University of Surrey’s life sciences expansion at Surrey Research Park.
“However, the real challenge lies in supply, particularly for town centre buildings that offer the ESG credentials and amenities today’s tenants expect.
“Guildford is changing almost on a daily basis and there is a real opportunity out there for developers and landlords able to supply high-end refurbished or new-build office stock.”
