A late surge of Reading office deals in the final quarter of 2004 means developers and agents have high hopes of a meaningful recovery in 2005. It is widely expected that PMB Holdings will start building the town centre's only speculative office scheme in the first half of the year. Furthermore, the buzz created by Land Securities' planned sale of the Station Hill site has got the market talking about even bigger developments.

LaSalle Investment Managers Thames Valley Opportunity Fund acquired Portfolio Holdings' Thames Tower for £26m in 2004. With a lease expiry coming up this year, and consent for three more floors, how LaSalle proceeds will be an indicator of the market.

James Knowle Investment director at DTZ says:

"LaSalle sees Reading as one of the towns where occupier demand will first come back, and drive up office rents"

Local agents believe the floor-to core depth will rule the possibility of residential conversion; a fate which has befallen many of Reading's offices.

Ian Campbell, partner at Campbell Gordon reports that that 16% of the office take-up in Reading in 2004 was buildings being taken out of the market for residential conversion or redevelopment: this compares with 20% take-up from the IT sector. However, it is all helping to push down supply.

Construction has started on one of Berkshires' only speculative office schemes. Theale Lakes by Denton & Gibson and J Mould Properties will create 65,000 sq ft (6,040 sq m) of office units of 2,500 sq ft to 10,000 sq ft (230-930 sq m). Agent Holt Walters is quoting freehold values of £250/ sq ft (£2,691/sq m) and rents of £20/sq ft (£215.28/sq m).

US technology company APC has taken 10,000 sq ft (930 sq m) at Prudential's GreenPark in Reading at £22 sq ft (£236.80 sq/m) on a 10 year lease. Lambert Smith Hampton acted for APC.

LSH director Christopher Reeves notes:

"This is the first US-owned company to take space in Reading for some time."

Knight Frank and Campbell Gordon acted for Prudential.