Spotlight on South Coast Offices
An 11% increase in Grade C office space on the South Coast in the second quarter of 2013 has driven a 4.5% rise in overall availability in the region compared with Q1 to 1.88m sq ft, says Lambert Smith Hampton. Grade A and B office space only increased 3%, but Grade B space still dominates at 69% of the total.
Nearly all the Grade C availability is in town locations, Lambert Smith Hampton points out, providing the potential for conversion to residential and other uses.
Activity in the market for South Coast offices was steady in Q2 2013 compared with the previous quarter, with take-up of 61,339 sq ft vs. the 61, 865 sq ft recorded for Q1. Enquiry levels were also consistent with the first quarter, the firm notes, with most office enquiries for space below 20,000 sq ft. A significant amount of total South Coast office supply now falls into the sub-5,000 sq ft category, so to give a more accurate reflection of supply the firm’s analysis now includes offices under 2,500 sq ft.
Prime rents for city-centre office space on the South Coast remained at £18.50 per sq ft in the second quarter, while out-of-town prime rents were £18.75 per sq ft. Out-of-town rents came under downward pressure, LSH says, with Grade A supply levels higher there than in city centres. Rents for offices in Winchester outperformed other centres in the region, as here the supply of office space is constrained compared with elsewhere, which has helped to maintain higher rent levels.