Take-up across the South East office market (defined as the Western Corridor and the north and south M25 markets) witnessed a significant increase in Q3 2014, reaching 716,000 sq ft, according to Strutt & Parker.
Take-up across the South East office market (defined as the Western Corridor and the north and south M25 markets) witnessed a significant increase in Q3 2014, reaching 716,000 sq ft, according to Strutt & Parker.
This represents a 73% jump from the previous quarter where 413,436 sq ft was transacted, the lowest take-up for the area ever recorded by Strutt & Parker. Take-up for Q3 2014 was also marginally up on the five year quarterly average.
Ed Smith, head of national markets office agency at Strutt & Parker, said: “After the success of 2013, when the South East performed better than it had done since 2007, the first half of 2014 was relatively quiet as many of the larger requirements had been satisfied and much of the speculatively built stock delivered was accounted for. As the take-up figures for Q3 demonstrate this is no longer the case and we are seeing a return to transactional volumes that are in line with the five year average.”
Strutt & Parker’s research indicates that take-up for the last quarter of 2014 is set to be strong with identified demand currently standing a 5.81m sq ft, up 42% from Q2 2014 when it was 4.08m sq ft. Currently, 975,000 sq ft of space is under offer in the South East office market which represents 17% of the total demand.
Ed Smith added: “Landlords and developers who have delivered, and are continuing to develop, speculatively built stock in key South East towns are certainly reaping the rewards as identified demand increases. Deals that are completing on Grade A buildings in strong locations are achieving headline rents and incentives are moving in to pre-recession levels.
"Our findings suggest that if all of the space that is currently under offer completes by the end of Q4 the total take-up for 2014 will reach at least 2.8m sq ft. Whilst this means that 2014 will not replicate the heady heights seen in 2013, it is in-keeping with the five year average and will instil further confidence in South East locations where new developments and refurbishments are being considered.”
View more about our commercial property services.