The
KS said office take-up in the region was 1.9m sq ft, a 115% increase on the previous year. The figure was driven in particular by a bumper third quarter.
Quarter 4 take up was approximately 319,000 sq ft in 15 transactions, 47.5% up on Q4 2009.
The largest deal to sign in the quarter was the freehold sale of the 69,692 sq ft
The year also saw the volume of supply finally begin to fall with 7.5m sq ft available at the end, compared to 7.6m ft2 at the end of 2009.
Supply peaked at 7.9m sq ft at the end of Q2 2010 and the vacancy rate at the year end was 12.2%.
King Sturge is predicting a tougher year in 2011 with approximately 1.4m sq ft of take up (slightly below the five year quarterly average), but “still significantly more than the cycle low point”.
Piers Leigh, Partner, South East Office Agency, said: “Following the record quarter of 916,000 ft2 of take up in Q3, Q4 saw a reality check for the market with another quarter of below average take up.
“However, as a whole the market bounced back strongly in 2010 from the low of 2009 with encouraging signs for 2011 and justification for cautious optimism moving forward.
“There are a number of larger active requirements, with the likes of LG, Bosch (both looking for over 100,000 sq ft) as well as unsatisfied requirements such as Akzo Nobel and Centrica both circa 150,000 sq ft.
“2011 will be a solid if unspectacular year with 2012 looking likely to be the start of a more sustainable upturn in the market.”
Angus Minford, partner responsible for South East Investment, said: “Speculative development also returned to the Thames Valley in 2010 with BAM starting on site at Chiswick Green (81,544 sq ft) and Rockspring also expected to start with Toyen (80,130 sq ft) in Uxbridge during the first half of 2011.
“The market for short-leased well located stock in select towns is attracting more and more interest from developers and investors with access to funding. While prices remain relatively low, this sector of the market represents good value for purchasers looking to refurbish or redevelop properties in time for the market upturn in 2012/2013.”
paul.norman@estatesgazette.com
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