Two leading agents claim the M25 office market has nearly bottomed out.
M25 office vacancy rates will peak at 9.5% by the end of this year, according to Knight Frank.
And FPDSavills estimates that 27.3m sq ft of office space is available, a vacancy rate of 13.5%.
Its Q2 report predicts that availability will peak at around 28m sq ft, of which 90% will be new or good-quality secondhand space.
Knight Frank’s Quarter two M25 offices report also shows that, at the end of June, M25 vacancy rates were at their highest level since March 1995.
But the agent says low levels of development activity have helped to redress the imbalance between supply and demand.
Knight Frank said that, at the end of Q2, double-digit availability rates were evident in the north-west and south-west M25, at 12.1% and 10.6% respectively, compared with the south-east and north-east M25 rates of below 5%.
Alistair Elliott, Knight Frank’s head of national offices, said: “Unless there is an unforeseen dramatic increase in the number of tenants releasing space, we believe availability will peak at the end of this year.”
Savills forecasts that prime rents for the western sector will fall to around £26 per sq ft, representing an 8% decline over the year.
References: EGi News 25/07/03
