PROPERTY development and investment company the Adderstone Group has reacted to the recession and fall in commercial property prices by cutting rents – allowing it to shift almost 100,000sq ft of office space in recent months.
The Jesmond company says its change in focus has helped it conclude in excess of 20 property leases in the second quarter, with some rents coming down by more than 25%.
Managing director Ian Baggett said: “Twelve months ago we were staring at almost 100,000sq ft of empty office space across four separate developments in the face of a seemingly inevitable recession. Securing tenants became a key priority for our development surveyors and in-house solicitors.
“It was no good sitting around waiting to achieve the rent we had factored into our appraisals.
“It is a tenants’ market. There are plenty of businesses out there looking for new premises and a better deal.
“We have handed tenants some great incentives, but at least our space is mostly occupied and we can look towards supporting our tenants’ businesses in any way possible so as to maintain the value of our investments.”
Adderstone had initially quoted rents of £21 per sq ft on its Keel House development on Newcastle’s Quayside but has recently concluded more than 11,000sq ft of deals at £15 per sq ft to Non-Linear Dynamics, B Group and B Daily. It has one 2,000sq ft suite remaining.
Its conversion of the old telephone exchange in Jesmond became fully occupied last week with a range of companies on all-inclusive rents of £24 per sq ft, compared with rents of £30 per sq ft initially quoted.
Leases to Adessi, Somethinkelse, Chamilia Europe and Prima Training have led to the occupation of more than 12,000 sq ft of its Maling Court development at Ouseburn, Newcastle, with these being agreed at £14.50 per sq ft.
Deals have included generous rent-free periods and compare with asking rents of £16 per sq ft pa. Adderstone has only a single unit left for sale or to rent.