Busy Skies

Prime industrial rents have remained stable in this market despite the turbulent economic conditions. In contrast office rents around Heathrow have fallen by at least 12.5% as the Thames Valley market bears the brunt of the uncertain equity markets and the slowdown in the TMT sector. The propensity of hi-tech occupiers to locate close to airports has accentuated the impact on off-airport office markets.

The fastest growing European passenger airports are regional airports boosted by low-cost carriers. These airports are increasingly important to regional economies. Many do not have established off-airport commercial property markets, at least in part attributable to the poor surface infrastructure around many of these airports. However, airports such as Prestwick have significant plans for aviation-related commercial activity.

Despite the low-cost boom King Sturge has not observed an increase in demand for industrial/warehouse premises around the fastest growing airports. Although the budget airlines do carry freight this is constrained by short turn-around times and operating on short-haul routes. In addition, the 'no-frills' approach requires less catering support than the traditional airlines.