The South East office market can look forward to an “inevitable” recovery after the highest take-up for three years, Knight Frank has said.
In its latest survey the agent found that take-up in the last quarter of 2004 was 964,000 sq ft, with vacancies standing at 8.1%. This was a very different story to 2003, when take-up in the last quarter was only 607,700 sq ft, while the vacancy rate was 9.8%.
Taken as a whole, 2004 saw the “fastest rate of decline” in availability since 1998, while take-up was at its highest since 2001, totalling 3.4m sq ft.
Joint head of research Catherine Penman said that demand had come back far more quickly than forecast at the beginning of the year and had been driven primarily by new companies such as brewer SABMiller taking space.
“This is very encouraging for the market, as previous take-up figures were dominated by companies reoccupying space they had vacated during the downturn,” she said.
Head of national offices Alistair Elliott added: “While pricing is still generally under pressure and will remain so for the foreseeable future, recovery is inevitable.”
He said the Heathrow-Reading area was still struggling to find tenants, but that pockets such as Hammersmith, Chiswick and Uxbridge were successfully attracting interest.
Last month, Uxbridge attracted the Hertz Corporation to the 69,000 sq ft UB1 building, in one of the year’s largest deals.
But he warned that the market was still “missing the large strategic moves” such as ExxonMobil’s 200,000 sq ft requirement, which was put on hold in November, and Amgen’s 200,000 sq ft requirement, which was cut to 50,000 sq ft and has been on and off since it emerged nearly two years ago.
