South East office space growth cloaks challenges ahead
Property specialist’s Strutt & Parker have urged caution over the latest figures from the commercial sector, which show a quarterly rise of 7% in office space take-up from the previous quarter.
They commented on the findings, which they advised cloaks a grimmer outlook to what the figures suggest.
Even though there was a 7% increase in Q3, there was disproportionate representation from leasing of properties below 20,000sq ft., and have pointed to the 715,000sq ft of unclaimed space in the South East as a prime example.
Rhodri Shaw, partner of Strutt & Parker said the lack of take-up in medium sized floor space in the 20-40,000sq ft range will be a key influencing factor of growth in Q4.
Mr Shaw also identified a lack of new office complexes across the South East, with just two new projects set to come onto the market by the end of the year.
Even though there is still strong demand for grade A commercial property, transactions have fallen to their lowest levels in 14 years.
So far in 2012, grade B commercial space has only accounted for 24% of deals done in the region.
Higher rent levels for property across the board and current economic conditions have stifled property development in the sector, with few office complexes planned in 2013 compared to that of two years ago.