Emerald Group Publishing Limited
Copyright © 2000, MCB UP Limited
M25 experiences strong take-up growth
Demand across the M25 market remains strong and, according to Richard Ellis St. Quintin, is expected to continue. In their latest M25 market survey Richard Ellis St. Quintin anticipate that a number of companies remain active and are looking to expand or consolidate their property interests, particularly in the M4/Thames corridor.
Take-up for the first half of 1999 reached 2.9m sq.ft - a 12 per cent increase on the previous six months - back in line with expected levels. Demand for large units remained strong with ten deals concluded in excess of 50,000 sq.ft. Occupiers also continue to focus their searches on good quality accommodation with 2.2m sq.ft (74 per cent) of take-up in either new or prime second-hand units.
The majority of deals, totaling 1.5m sq.ft were concluded in the western quadrant with computer services being the main takers of space acquiring 0.9m sq.ft - more than any other sector. A number or transactions by Regus - the serviced office company - resulted in office services accounting for the second largest share of identified take-up.
Whilst not on a level with demand to the west of the M25, take-up in the eastern quadrant reached its highest biannual level of 418,000 sq.ft, following three large deals in excess of 30,000 sq.ft. This included the largest deal of the year so far to Barclay Life Assurance, who took 180,000 sq.ft at Gloucester Business Park, Basildon.
Newly marketed space totaled 4.9m sq.ft, reflecting the traditional marketing patterns of landlords and developers - this is up 54 per cent on the last reporting period. Developer confidence is sustained with 2.0m sq.ft of new supply in new space - both developments and completed schemes.
With availability at historically low levels, especially for quality new and second-hand buildings in good locations, lack of choice is a real issue for prospective occupiers.
James Brounger comments:
With the effect of the Government Planning Policy Guidelines in respect of car parking now being felt we anticipate that the supply of new developments will remain tight around the M25 with good prospects for continued growth in rents.