There are several reasons why Reading operates like a regional city market. It has excellent transport links to markets across the country and fast journey times to central London. Crossrail will improve journey times and connectivity even further when it becomes operational in 2019.

Modern office stock

Despite Reading’s modest population of 163,000, the town’s strong office provision has enabled businesses to grow and expand without leaving the area.

Reading is the dominant office market in the outer south east, outperforming many other large office markets. The long-term average office take-up is more than 400,000 sq ft and the town has an estimated office stock of around 10 million sq ft.

Reading ranks fourth for office investment flows, highlighting the town’s appeal and its ability to offer prime office investment opportunities in town-centre and out-of-town locations. Reading exceeds total office investment in larger regional cities such as Glasgow, Bristol, Leeds and Cardiff, highlighting its strong performance and high-quality office stock.

^{Source: Property Data}

Global appeal

International corporations continue to locate in Reading. The town’s talented catchment workforce and large business parks attract these occupiers as they favour campus-style working environments.

Historically, large out-of-town business parks have attracted traditional technology and pharmaceutical occupiers. Here, business parks with greater amenities have performed best at attracting such companies and this will remain the case going forward.

Following amenity improvements, 76,000 sq ft was let at Arlington Business Park in the first half of 2017. Prior to those improvements, there had been limited transactional activity in recent years.

In town, there is a growing trend for serviced office operators leasing space that meets the co-working culture. This targets Reading’s strong start-up community – particularly in the tech and software sector.

According to the Tech Nation 2017 report, there were, on average, 605 start up births per year from 2011-2015 and more than 40,000 digital jobs based in the town. With this thriving tech scene, co-working operators accounted for 24% of take-up in the first half of 2017.

People working in Reading are a rich mix of international and domestic workers. Some 29% of tech businesses say they employ people from outside the EU, the highest figure in the UK. This provides Reading with a degree of insulation from Brexit and underlines its identity as a leading technology hub in a global context.

We believe the traditional golden triangle of knowledge economies – Cambridge, Oxford and London – can be extended to Reading to form a knowledge kite. This is based on the advanced knowledge economy that exists in Reading and the thriving technology sector.

Furthermore, as highlighted by the National Infrastructure Commission, the improved East West Rail Link will provide a greater service between Cambridge and Oxford, and also connect them to Reading. This will ensure Reading remains a key component in the regional and wider economy.

Leading target for investment

The past 20 years has shown that Reading has the ability to attract global companies. To support this, the commercial property market has responded by providing an appropriate stock of property to cater for company needs.

The flow of global corporate investment helps us identify the strength and location of commercial real estate. Reviewed alongside property demand and supply, this provides a guide to the market potential in the short to medium-term.

We have reviewed 212 corporate investment deals in Reading since 2012, including venture capital (VC) and mergers and acquisitions (M&A). Within the M&A market, there have been deals worth £10 billion: 87% involving companies headquartered in the UK and 13% with headquarters in the US. The strength of the M&A market is an indicator of the more mature companies present, and the US prevalence in Reading.

During the same period, there was £2 billion of other types of corporate venture capital investment. These are more reflective of the start-up community and an indication of future growth. The corporate strength of Reading lies in the IT and B2B sectors and the corporate transactions reflect this. A more detailed breakdown of the deals shows that the software sector accounts for 37% of the overall five-year total.

^{Source: Company Data}

How Reading performs, corporately, is impressive compared with key cities across the UK. In terms of the IT sector, Reading is in third place. Only Cambridge (£24 billion ARM acquisition by SoftBank and Alibaba Group) and Bristol (£12.5 billion acquisition of EE by BT) are ahead. Reading also performs well in the B2B market – lying third behind Manchester and Edinburgh.

This demonstrates that Reading has a significant and diverse offering for employees and exceeds the level of corporate investment activity in most major UK cities. Overall, it will remain a leading corporate location.