TAKE up in the South East office market reached a record level in 2017, according to a new report.
The report, published by BNP Paribas Real Estate found that office space take up in the region totalled 3.03 million sq ft in 2017, in line with the 10-year average and boosted by the strongest fourth quarter since 2007.
Smaller transactions represented an increasing proportion of the market, with 54 per cent of total take up now accounted for by transactions 5,000 to 20,000 sq ft.
However, there were no lettings over 100,000 sq ft, with the largest transaction being ASOS taking 75,000 sq ft at Leavesden Park in Watford.
Meanwhile, the serviced office sector was especially active over 2017, with the South East seeing a number of new entrants that had previously only considered Central London.
Spaces have been joined by Work.Life, Central Working, Pure Offices and WeWork, with the majority of this activity focused in Reading and West London.
Last year witnessed the speculative completion of 1.79m sq ft across 18 developments, with a bias to West London and the Thames Valley.
The company said that 2018 will see a much reduced level of development activity with only nine schemes, totalling 498,000 sq ft, due to complete.
Looking ahead, the company said levels of identified demand total 4.25m sq ft, with 625,000 sq ft currently under offer.
As part of this, lettings of between 5,000 to 20,000 sq ft are expected to continue to dominate take up, although there are also a number of significant corporate relocations on the cards with Sanofi, Novartis, Samsung, Virgin Media and PWC likely to go live early this year.
Ed Smith, head of National Markets Office Agency at BNP Paribas Real Estate, said: “Against the backdrop of uncertainty created by Brexit it is encouraging to see the market perform in line with the 10-year average. “The major corporate occupiers, with a few exceptions, continue to sit on their hands and it is the small to mid-sized companies that are getting on with life and committing to relocate to new offices.
“With 2017 being a record year for speculative completions it is not surprising to see fewer in 2018.”
Preliminary figures from BNP Paribas Real Estate indicated that the South East office investment hit levels of £3.27bn in 2017, up 18 per cent on 2016 and 36 per cent on the 10-year average.
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Source: Daily Echo