The UK office market has had a strong start to 2013, with leasing volumes well above long term averages.
Early analysis of data for the first half of the year indicates that a total of just over 3.8 million sq ft has been acquired for occupation across the South East and nine cities monitored, an increase of 16% on the second half of 2012. 2013 has the potential to be one of the strongest years for occupier activity since the recession started.
Regional cities have had a strong boost, with take-up 22% higher than the long-run average. In particular there have been strong upturns in take-up during the first half in Leeds, Edinburgh, Manchester and Bristol.
Stronger regional economic growth prospects, particularly within the service sector, is now beginning to be reflected in an upturn in enquiries and deals done. Crucial to this renewal has been the return of larger transactions. Exeter based SPACE currently have meaty office requirements in Bristol for 5,000 – 8,000 sq ft and in office requirements in Exeter for 6,000 – 8,000 sq ft as well as our smaller requirements on behalf of retained clients. The Exeter industrial market is also thriving with a definite lack of available warehousing. We are currently acting on behalf of a client with a 12,000 sq ft industrial warehouse requirement for Exeter.
Demand for Grade A office space across all markets continues to squeeze supply with a restricted completion pipeline. Only two major schemes completed in the first half of the year; one in Birmingham and the other in Edinburgh, both of which are already part pre-let. In Exeter of course the new generation of business park “SkyPark” continues to undergo ground breaking development with sustainable principles as well as the new Exeter Science Park which occupies some 26 hectares and will supply 820,000 sq ft of brand new, state of the art commercial property. Exeter Science Park will be completed in two phases. The new 27 acre Matford Green Business Park is also due to commence at Matford on Marsh Barton later this year which will consist of 500,000 sq ft of office, industrial & commercial property (B1, B2 & B8 uses).
Much of the regional office market continues to have significant quantities of poor quality secondary / tertiary stock, which under the Government’s new Permitted Development Rights for conversion from office to residential, may make way for development, though this does of course depend on sales pricing and demand for rented stock. Many poorer quality offices are also being refurbished to a high standard.
Tim Wadsworth of SPACE added “The consequence of the improvement in market conditions is that supply levels, particularly of Grade A space, are declining and most Westcountry cities (Exeter, Bristol & Plymouth) now have less than 500,000 sq ft remaining and limited choice for those clients seeking the best quality space. This will improve as more commercial property is constructed in the Westcountry.”
SPACE acts only on behalf of tenants & occupiers. SPACE assists businesses and commercial occupiers with lease renewals & renegotiations as well as commercial property relocation for office, industrial & retail users. SPACE are based in Exeter but work with clients throughout the South West. We save you money, conserve your time and give you peace of mind for all commercial property.
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