|
contents | business | |||||||||
| Take-up slowing but rents remain resilient in M25 region of the UK British property services group Savills' six month Greater M25 Office Survey has revealed that take up in the region will be muted this year and supply will recede, particularly in some core towns. However, rents have continued to rise and look set to remain healthy. Savills' summer report, commenting on the first half of the year, predicts that rents will continue to rise, although each of the regional sectors have, over the past year, had different experiences. Average headline rents in the Western sector rose by 7%, compared to 3.7% in the Southern sector, whilst the Northern sector saw a 2.6% fall in top rents achieved. However, the highest rent achieved in a single transaction in all three areas was greater across the board. According to the report, in line with the expected economic downturn, take-up will be slightly slower throughout the rest of 2008, having seen a 4% rise in 2007. However, the Western sector will fare better, with take up in the first half of this year in line with the same period of last year. The report found that 2 million sq ft (185, 800 sq m) of deals have taken place so far this year in the area. The Western sector, including towns such as Maidenhead and Reading, continued to dominate the market with a 54% share of the total take-up in 2007, rising to 63% in the first two quarters of 2008. Take-up by the manufacturing sector was found to be above average, helping to diversify the type of demand in the market. Savills' report indicates that development completions in the next year are expected to be high, with 2009 predicted to see the highest level of completions since 2002. This level of development has been triggered by lack of supply in the market and some significant pre-lets, including Unilever, Wyeth and O2. Investment, however, has seen little activity after a flurry of deals at the beginning of the year. In the South East office market the volume of transactions has fallen dramatically with the first half of the year 75% down on the second half of 2007. Yields prove difficult to pinpoint with so few transactions, however Savills predicts that a yield for a grade A office in a strong town centre on a 15-year lease should lie in the region of 6.25%. write your comments about the article :: © 2008 Construction News :: home page |