Demand across the South East
office market increased by 10% in the second quarter of 2014, according to
Savills.
150 new requirements came to the
market in the period, which together total 2.7m sq ft of wanted space.
Total demand for the first half
of the year is up 15% on the previous half, totalling 4.5m sq ft.
Requirements include 100,000 sq
ft for Dixons/Carphone Warehouse; 100,000 sq ft for Amadeus; 80,000 sq ft for
FM Global; and 20-40,000 sq ft for Smeg.
Grade A availability is currently
at 4.1m sq ft, said Savills, which when based on average take-up of 3.6m sq ft
a year would provide 1.1 years of supply.
Currently 550,341 sq ft is under
offer and a number of other companies are believed to be committing to new
space, including Lidl, Pepsico, Robert Bosch, Gartner, Hyundai, Gilead
Sciences, UCB and Haymarket.
However, take-up in the second
quarter was 30% lower than in the first quarter at 352,000 sq ft.
Jon Gardiner, head of Savills’
South East office agency team, said: “It is an interesting time in the South
East office market, if also quite frustrating, in that we are all reading
positive economic news about growth, jobs and the general improving economy and
yet occupational take up hasn’t quite caught up.
“However, the sheer volume of
occupational demand, which has been increasing over the past 12 months,
underpins our undoubted confidence in the South East office market, which is
significantly undersupplied of grade A space and continues to experience
increasing rents.
“We are in a new business climate
where occupiers are doing more due diligence and undertaking more research to
ensure they are able to make a fully informed property decision that is right
for their business for the long term, even if it costs the business two to
three pounds per sq ft more by taking longer to commit.”