Bournemouth – dressed up for business but nowhere to go

Bournemouth’s reputation as a Dorset tourist destination is irrefutable, boasting miles of golden sandy beaches, breath-taking views and cliff-top walks, together with a good range of restaurant and bars.

But the benefits of the town as a place to locate your business are, perhaps, less well-known.

With a high-growth digital sector and as one of the fastest growing areas for startups in the UK, Dorset – and more specifically, Bournemouth – is a fantastic location for global enterprise.

Home to over 168,000 people, the town has access to a local market of some 435,000 residents. Indeed, the wider BCP region employs some 200,000 people and contributes £20 billion in GVA to the UK economy through the 56,000 active businesses in Dorset.

But what makes it such a good place to do business, and what does the Bournemouth office market have to offer? Our Bournemouth-based Agency Partner, Bryony Thompson, explores.

As representative for the region on behalf of the Dorset LEP, and based at Vail Williams’ office in Bournemouth where she acts for occupiers to secure office premises across the region, Bryony understands the machinations of the regional office market here more than most.

Home to two Universities with around 25,000 students between them, Bournemouth is responsible for producing a world-class talent pool, particularly in digital and creative media and the arts. However, one of the key challenges for Bournemouth is retaining this talent.

With such good rail connectivity direct to the City, most graduates end up leaving the town for the bright lights of London.

But despite this, and thanks in part to its rail and airport connectivity which opens up access to the UK and Europe, major international businesses in the financial services, aerospace, engineering, digital and creative sectors continue to call it home. Indeed, some 250 businesses have their head office operations here.

Many of these businesses benefit from the incredibly competitive office rents in Bournemouth, which are well below the South Coast average. Yet, there remains a sense of untapped office market potential in Bournemouth which is still to be addressed.

The problem is, it’s a chicken and egg situation for landlords and developers, as Bryony explains.

When you add to this the fact that rents aren’t at a level yet to make investment in refurbishing aged or secondary stock viable to meet this demand, it leaves landlords and investors in a bit of an investment quandary.

According to Bryony, market rents for Grade A office space in Bournemouth is currently peaking at around £25.00 per square foot (psf) and, whilst this is heading in the right direction from the pre-covid highs of £18.00 psf, there is still some way to go.

“In order to justify refurbishment or development of high-quality space to meet occupier demand, landlords and investors need to command rents in the order of £30.00- £40.00 psf to make this viable.”

Whilst the highest market rents are around £25.00 psf, for the best quality of stock. This is what we have achieved at the Wessex Fields Development, which we are marketing and managing on behalf of Troika and Ageas.

Made up of Tringham House, Everdene House, Stour House and Deansleigh House, the development offers high-quality Grade A office space, strong ESG credentials and plenty of parking which has recently attracted occupiers including Vail Williams, Allianz.

But what else is on the market, and is there enough city centre stock?

High-quality office space is lacking in the town centre, despite occupiers wishing to locate there.

Ben Duly, Associate specialising in office investment at Vail Williams, added: “Bournemouth occupiers rightly want to have their cake and eat it. They want to be in Grade A office space in the town centre, boasting a variety of specification – from open plan office space and collaboration areas, to Zoom booths and meeting rooms.

“Alongside that, they also want better energy efficiency and sustainability credentials such as good EPC ratings or BREEAM Excellent and Fitwel ratings, but they will need to be prepared to pay for the rise in rents that investment in refurbishment and improvements will inevitably bring.

“The challenge for Bournemouth, and its commercial property landlords, is delivering against occupier needs in the town centre, where quality stock is needed most. But invest in an ageing asset, and they will come.”

Untapped opportunity for Lansdowne

Despite the lack of good quality town centre office space available, Bournemouth is home to a good range of household names, including all the major banking and insurance companies, including Barclays which relocated 700 staff from Poole to Bournemouth’s Lansdowne area in 2022.

Home to Bournemouth University campus, this part of Bournemouth is characterised by a mix of tall modern buildings and heritage buildings.

However, due to a lack of investment for over 30 years in the area, it has failed to harness its potential and was proposed for public realm redevelopment in 2015. In 2017, the Lansdowne Business District (Lansdowne Programme) was awarded £8.5 million to redevelop the public realm here, but the plans never took off.

With good connectivity, located close to Bournemouth railway station, and providing occupiers with access to town centre amenities, there is a lot of office potential in the Lansdowne quarter.

However, as was highlighted at a panel event hosted by South Coast Property Show earlier this year, security improvements are needed to help workers feel safer here – particularly in the winter months when leaving offices via poorly lit streets, including the ominously named underpass, ‘the pit’.

Speaking at the event, Caroline Peach, Head of Strategic Planning at Bournemouth City Council, explained this was already on the Council’s radar. Meanwhile, Bournemouth Town Centre BID continues to invest in a variety of initiatives to improve safety for workers and visitors.

From their own research, the BID already knows that those who work, visit, or live in Bournemouth Town Centre want safe and secure streets and this is why they invested heavily in  making the town centre a safer and happier place through the Business Crime Reduction Partnership (BCRP) and the operation of their Town Ranger programme which, together, is helping office workers to feel safer particularly after dark.

Invest now and tap into Bournemouth’s potential

It is clear to see from the businesses that continue to choose Bournemouth as a place to locate, that the town has a great deal more to offer than its stunning beaches and coastline.

But it is going to take an astute landlord and investor with the necessary funds behind them, to help realise its office market potential.

Improvements to support better personal safety for workers, together with investment in some of the office stock at Lansdowne, will certainly help Bournemouth to attract more occupiers into the town centre, so that they can benefit from the amenities on offer there.

Sometimes we have to speculate to accumulate. We know that occupiers in Bournemouth want more high-quality office space, particularly in the town centre, so why not be an early adopter, and potentially reap the benefits in the longer term?