This is provided by way of a commentary of the current Commercial property market in Ipswich and will be updated as trends change.

****WELCOME TO IP CITY****

Previously regarded as Britain's best kept secret, Suffolk, and more particularly Ipswich, is now the rising star in the East. The town may have lost out to Brighton and Hove, Wolverhampton and Inverness in being award city status, but Suffolk's County Town has become a 'virtual' city as the hub of a new technology triangle.

Ipswich has suffered in comparison to a number of other regions in the UK over the last 10 years or so from lack of inward investment and decentralisation. But the town, like it's football club, is now achieving premier status.

The economy of Ipswich was previously built off the back of engineering, agricultural equipment and horticultural products but now says Martin Reader of Reader Commercial, 'the town has turned the corner' with tangible evidence of Ipswich now enjoying an economic resurgence lead by the high-tech sector.

The recently initiated Cambridge to Ipswich Hi-Tech Corridor really is heralding high-tech growth in the town says Reader and the Ipswich/London/Cambridge triangle really is creating new opportunities.

BT, with the largest single concentration of scientists any where in the world at their research centre at Martlesham (East Ipswich), now seem to have stepped from behind the shadows to not only promote the excellence of their innovative research, but is also spinning out new start up companies off the back of BT Bright Star 'the corporate incubator' set up by BT last year to assist the creation of new small firms to exploit some of its thousands of patents. Plans have also been unveiled for one of Britain's top universities to open a new post graduate school at Adastral Park, the BT Research and Development Centre at Martlesham Heath.

Agilent Technologies (formerly part of Hewlett Packard) is another major high-tech company based in Ipswich and they major in fibre optic communications based at a substantial site at Whitehouse Road, west Ipswich. Plans have been unveiled to provide a new 80,000 sq ft extension. Currently employing 800 staff at Whithouse, Agilent is one of the largest suppliers of fibre optic modules to the networking industry, exporting 70% of their products to over 30 countries world-wide.

4e-networking provide business technology news and knowledge management provision for major corporations. They are targeting growth to around 350 employees turning over £100m annually within 3 years.

Getech operates from purpose built office headquarters in Ipswich and has a current turnover of £28m, employs over 150 people and specialises in technical support and maintenance.

Smart 421, one of the fastest growing companies in the UK, delivers innovative e-business solutions to established blue chip clients and dotcom start up companies. They have offices in Cambridge and Ipswich; the Ipswich offices being at Felaw Street Maltings on the Ipswich Waterfront.

Partly as a consequence of the take up of space by high tech companies, the availability of office space in Ipswich has fallen from the typical level of availability of circa. 400,000 sq ft to somewhere today in the region of 100-150,000 sq ft.

According to Reader Commercial, office rents in Ipswich for modern/refurbished accommodation are in the £7.50-£8.00 psf bracket but clearly new development cannot be sustained until a minimum of £12.50-£13.00 psf is achieved.

The market hit these levels, and beyond, in the late 80s but Martin Reader believes that the current hiatus will be broken by end users, probably led by the high-tech sector, being prepared to pour money into new facilities and hence bringing rents up to this new tier.

In terms of existing office stock, Reader Commercial are joint letting agents for Crown House which was purchased by Commercial Estates Management 2 years ago. This 90,000 sq ft complex was approx. 50% occupied at the time of CEM's purchase but only 5,000 sq ft remains. Rents achieved are £7.75-£8.00 psf. The Agents point out that with such a large office building space tends to become available within a fairly regular cycle as leases expire etc.

The Borough Council's commitment to the development of the high-tech sector is underlined by their willingness to unlock a prime 20 acre site at London Road, which has previously been the subject of a number of false starts, to be released for high-tech development.

The development of Ipswich Waterfront is not only providing regeneration for the town but is helping reshape and revitalise the hinterland between the existing prime core of the town centre and the Waterfront are effectively creating one continuous centre. The docks have attracted office users to the impressive Felaw Street Maltings and residential development is being kicked off by Bellway Homes who have completed their Neptune Quay development providing 69 flats. New retails units are also being created at ground floor level aimed at attracting speciality retailing.

Elsewhere around the docks deals done include Beazer Homes acquisition from Anglo Norden of their Eagle Wharf land plus a further 10 acre parcel on Wherstead Road (West Bank) Martin Reader of Reader Commercial says that 'this activity has led to a number of approaches to other existing quayside users and Reader Commercial is a party to a number of these discussions where a further announcement should be made shortly.

In terms of retail and leisure development the town centre remains the exclusive domain of A1 retailers with bulky goods and items sold in 'out of town' stores being controlled. The Mint Quarter is the subject to intense activity by Helical Retail. In the absence of a commitment to proceed with the scheme rumours abound in terms of 'will it or won't it?' but the agents believe there is an opportunity for the scheme to happen with the development being anchored by the Ipswich & Norwich Co-Operative Society and Woolworths. The agents believe that Helical may have factored into their development some leisure activity in the form of a theme pub, nightclub etc..

Leisure activity in the town focuses on Cardinal Park anchored by the 12 screen UGC cinema, 24,000 sq ft Liquid (Luminar Leisure) plus Brannigans etc. Ipswich has become the Las Vegas of East Anglia with a series of other pubs, clubs and restaurants and the Ipswich Town Football club which attracts capacity crowds to each home game is currently being extended to include a new east stand which will improve seating capacity by an additional 7,500. Proposals are also in hand to expand the west stand to provide a major seated enclosure which will be jettied across Portman Walk with the road effectively tunnelling through the stadium.

A multi million pound new hotel and leisure development opposite the Ipswich Town ground is set to go ahead. The development includes a leisure club, a bowling alley, a restaurant, a crèche and a multi storey car park alongside a 150 bed hotel.

The planning application has been submitted by Chelmsford based development company, Turnstone Estates, and the owners of the land, Ipswich Borough Council, has set up a partnership scheme with Turnstone Estates to transform the area.

Elsewhere the story on out of town retailing is dominated by the recent opening of the Homebase Megastore at Bury Road which is a 160,000 sq ft site and is the company's largest store in the UK. The recent sale of the Homebase business to Schroders has led to the recent shock announcement that the new buyers wish to put the Ipswich Megastore on the market. The agents believe that although B&Q have made an application for land at Ransomes Europark, this could be fraught with difficulties and that B&Q may inevitably take over the Homebase Megastore.

The Ipswich industrial market has remained fairly static throughout the year with no new starts of any significance. Deals tend to represent existing stock being passed around the market between local firms. Good quality space is available however at the former Serif Cowells complex at Whitehouse Estate, West Ipswich which was recently purchased by the Minton Group and offers end users the ability to secure quality modern industrial/warehouse space in units from 14,000 sq ft - 61,000 sq ft on either long or short term leases at rents from £3.25 psf.

Braceforce Properties, represented by Reader Commercial, are to break the mould by developing a 15 acre site to be known as Orion Business Park at Gt. Blakenham (West Ipswich). The first phase is to provide for 250,000 sq ft of good quality B2/B8 space of which 100,000 sq ft has been pre-let to the Paul Magnus Group. The agents say that this will be the best space in the town being 30' to eaves with curtain glazing and very generous yard and car parking provisions set in a heavily landscaped environment with a lake and other environmental benefits. Rents are from £4.50 psf and completion/occupation of the first phase will October 2001. The agents also report that terms have been agreed to sell the investment which is now under offer.

The recent sale of the Harris Bacon Factory at Hadleigh Road (18 acres), the sale by Dunblane to Beazer Homes of industrial land at Wherstead Road (10 acres), the planned re-development of Eastways (30 acres) and the disposal of the remaining land at Ransomes (circa. 80 acres to Ikea) put the town in jeopardy of having its industrial land allocation being mopped up by a series of residential brownfield developments and large end users coming in to the town and places pressure on the Council to identify and release additional employment land.

The proximity of Ipswich to Felixstowe (approx. 10 miles) does not alter the massive influence which the Port activity exerts on the town as a number of transport, haulage and distribution companies continually seek B8 shed space.

As with the office market, rents are shy of the £5.00-£5.50 psf level needed to trigger new development but it does ensure an ongoing and healthy demand for economical, second hand space on a short term basis.

Ipswich is an exciting market which extends beyond the frontier of emerging new businesses and a town rich in sport and leisure facilities but transmits on to the street into a sense of fresh new civic pride.

7th February 2001