South East: Office market take-up steady as deals rise
Take-up figures for the first half of 2017 represent an increase of 10% on the five-year average for the first six months of the year but fall by 9% when compared to the same period of 2016. The second quarter of 2017 saw a minimal fall of 2% compared to the corresponding quarter of 2016.
According to Strutt & Parker, whilst the quantity of space transacted across the South East office markets has remained relatively stable the number of deals taking place has increased, with 50 separate leases agreed in Q2 2017 compared to the long term average of 39 per quarter.
The amount of space occupiers are taking has reduced (the average deal size was 14,000 sq ft) with the majority of activity concentrated in the 5,000 sq ft to 20,000 sq ft size bracket, which reached a new peak this quarter accounting for 52% of all of the space that was transacted.
Strutt & Parker believes that these stable levels of take-up show no sign of abating with the region enjoying sustained levels of identified demand. It cites requirements for office space in the South East as totalling 4.68m sq ft, with 565,000 sq ft of this under offer.
It said: "Developers and landlords continue to respond to this mandate for new space and the first half of 2017 saw completions of new stock peak for this development cycle."
Ed Smith, head of national markets office agency at Strutt & Parker, said: “It is encouraging to see that take-up remains stable, but is now predominantly made up of deals in the 5-20k size range. Identified demand is limited in the larger size bands and those that have delivered new product to the market will have to adapt to the new demand characteristics by having a flexible leasing strategy.”
Source: CoStar
