Alchemy Asset Management and Tristan Capital Partners have completed what they consider one of the most pioneering repositioning projects for out-of-town offices at Reading’s Campus Read More
Guy Bishop, the founder and director of London and South East asset manager Alchemy Asset Management, is on site to show off what is clearly his pride and joy.
Bishop founded Alchemy alongside David Hughes, and the duo are evangelical about what has been achieved at the project. Richard Harding of Bray Fox Smith, leasing agent alongside Savills, is equally effusive about a development they say is reinventing what offices should be offering in the UK.
The property, known for most of its history as Reading International Business Park, was bought in December 2020 by EPISO 5, a fund advised by Tristan Capital Partners, for around £120 million. ICG completed an £86.8 million senior loan to Tristan Capital Partners secured by the park at the beginning of 2021 – all major commitments to South East offices in the midst of the pandemic.
The park has always been something of an outlier and a bellwether for the Thames Valley. Reading International was developed in 2000 and 2001 by Mark Glatman and Trevor Silver’s Akeler and quickly became the European headquarters for MCI Worldcom, which is now Verizon, in one of the market’s biggest occupier transactions.
In 2015 then-owners EPF and DWS sounded out the market about a potential sale before deciding to hold. They then brought the park to market formally in 2019 via Savills seeking upwards of £130 million. Tristan and Alchemy went under offer ahead of a strong list of bidders in December 2019 for a price believed to be more than the guide.
And then the pandemic hit and everything went on hold. The eventual acquisition around a year later was at a reduced price of around £120 million.
It has always been a striking 375,000-square-foot office building, immediately on Junction 11 of the M4, and immediately familiar to those driving between the South West and Wales and London.
“We had looked to buy the campus for six or seven years. We first offered in 2015 when EPF considered a sale. It was a classic Akeler development that was ahead of its time in many ways, being such a large building in an out-of-town setting, yet under one roof. It was designed to be multilet but then Verizon took the whole building and the opportunity to create a community building was lost.”
Bishop said when the opportunity came around again in late 2019, just in the run-up to the pandemic, the fact that Verizon had surrendered its headlease, vacated some of the space and let a third of the building represented a strategic opportunity to reposition and make it relevant for the post-pandemic office market, in terms of design, ESG and amenity provision.
Around 180,000 square feet is now available to lease in a variety of configurations that Alchemy and Tristan say have been repurposed and built to suit the space needs of the modern occupiers that are emerging from the pandemic.
“The tenants here – including Verizon, Investec and Accenture – are leading corporates while around half the site is vacant. What it offers is scale, which allowed us to create something very special.”
Alchemy, which asset manages other developments in London, as well as the South East and South West, sees the building as one of the jewels in the Thames Valley and the perfect canvas on which to create something that moves the UK office market forwards.
“We wanted to create something that was different from the bland and disparate business parks and deliver an exciting and vibrant community building. Single ownership parks provide a much better offer to occupiers compared to 10-15 years ago, as demonstrated by the likes of Frasers at Winnersh and Mapletree at [nearby] Green Park. But we were inspired by the likes of Derwent in central London and wanted to create something more contemporary, youthful and energetic, but in an out-of-town setting.”
Critical, Bishop says, is that everyone is under one roof – and it is a large roof. “It really does have the scale to create something truly special for everyone here. That does involve a significant capex commitment to improve the site and the amenity, but we had that built into the business plan from day one. Tristan shared our vision that this was what the market wants.”
“After COVID hit we revisited the plan. We have developed a vision that creates much more of an operational site to include a diverse amenity offering with an emphasis on quality of service for the end users. As a multilet building, well suited to small and medium-sized occupiers, we feel we can build a community which cannot be replicated in other out-of-town locations. That said you can get 62,000 square feet on a single floor, the largest single floor plate in the Thames Valley, and 85,000 square feet in a single block, so we can accommodate a very wide range of requirements.”
With Bray Fox Smith and Savills appointed on leasing, the duo is targeting rents in the “late £30s per square foot”.
Bray Fox Smith’s, Richard Harding explains that the vision for the project has been to create a Thames Valley office unlike any other, with “exceptional on site amenities, strong sense of community, large flexible floorplates and leading ESG credentials, in a contemporary refurbishment”.
So what does that really mean? Features include refurbished offices featuring displacement ventilation, a healthier air conditioning system designed to provide 100% fresh air. “We know that good air quality is increasingly important to occupiers, and the displacement system is best placed to provide this,” Harding says.
There are exposed concrete ceilings throughout with LED lighting but without ceiling-mounted mechanical and electrical equipment as the displacement system is below the floor, with the aim of providing a more attractive, uncluttered ceiling finish. “This again provides a strong look and feel to the office floors not seen in many competing buildings,” Harding adds.
Bishop says all of the work has been carried out on the principle that they needed to “provide a comprehensive provision of amenities and wellness provision, but equally to achieve this with a strong sense of design and changing the perception of the building”.
“That is vital. We have sacrificed office space to replace it with a 7,000-square-foot restaurant, multi-function rooms, a 5,000-square-foot gym and changing room space and excellent cycling facilities.”
The building is unusual in that it has the potential for a single floor of 62,000 square feet – the largest single floor in the Thames Valley.
The restaurant, which completes in August, is in the core of the main building. It will include terrace seating and will be a step up from a typical “landlord’s café”. This facility has been relocated from a separate amenity building at the suggestion of the tenants. “Food quality in the restaurant is also vital to what we are achieving in terms of wellness and it is what occupiers want,” Bishop says.
New design features include a large arch structure at the entrance to the building while the well-known terracotta tiles have been painted grey to create a softer and more contemporary look.
Bishop says Buckley Gray Yeoman’s work on design and landscaping has been critical. “It was always the big red building on Junction 11. BGY came up with a number of key interventions, including the new entrance arch, painting the building grey, establishing a large double-height reception and business lounge, and delivering a market-leading gym and end-of-journey facilities in the basement, all of which made the site feel softer and welcoming, more contemporary and also works better from an operational perspective.
“I think for Grade B offices it will be a tougher market going forward. Many occupiers will be consolidating into less space but equally into higher quality buildings and expecting more from their landlords.”
There has also been a major landscaping project to redesign and soften external areas in front of the building with a new entrance and reception that includes a business lounge area that has the aspect of a boutique hotel lobby in London’s West End.
The gym, plus studio space and treatment rooms, also in the core of the building, are exclusively for building occupiers.
“You have to offer something extra for office workers as staff return,” says Bishop. “The gym has opened and walking around just kind of incognito I have heard employees saying they go out of their way to come into the office for the gym. It really is about offering staff a reason to come in.”
There are also extensive “end-of-journey facilities” including a 175 space secure bike store and showers which are more akin to a health club. The site of the previous restaurant – outside of the main office and a stroll away that was unwelcome in winter – have been rethought to create a dramatic town hall and multi-purpose event space which occupiers at Campus are already using.
Harding says all that means the campus is targeting WELL Platinum and BREEAM Excellent. “We are advised that there are only six WELL Platinum sites in the UK, of which five are in Central London and one in Manchester.”
The building also has increased its fibre connectivity and has achieved WiredScore Platinum. The Campus App is live and supports community interaction and the live events calendar as well as providing smart building data for occupiers. “We recently hosted a launch party for the Campus App and over 300 people attended, showing that if you provide these kind of events, the staff on site are really keen to participate and join in,” says Bishop.
Campus has also moved to all-electric heating and cooling for all of the refurbished offices, and is developing proposals for a substantial solar photovoltaic facility on site, which will have the potential to produce up to 15% of the site’s own electricity consumption, putting the site on a trajectory towards net zero carbon.
Also integrated is Campus+ comprising three fully fitted suites available from 1,500 square feet to 3,300 square feet available for immediate occupation.
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