Rents and take-up rose in the Western Corridor over Q3, but a quiet final quarter has been forecast by Jones Lang LaSalle.
A total of 602,000 sq ft was taken-up in the Western Corridor between July and September; a 9% jump on the five-year Q3 average of 553,000 sq ft.
Over three quarters (76%) of the transactions were from manufacturing clients, in particular from pharmaceuticals, JLL said in its Western Corridor report.
James Finnis, director of South East office agency at JLL, said: “Take-up volumes recovered in Q3 as the surge in demand witnessed in Q2 fed through to transactions. There is a healthy crop of new large requirements in the Western Corridor. However, we are forecasting that the majority of these requirements will not transact until 2012, so take-up volumes by the end of 2011 will be lower than those seen in 2010.”
Overall supply in the area fell to 12m sq ft in the third quarter, reflecting an overall vacancy rate of 13.8%.
Grade-A vacancy stood at 5.5% in compared with 5.9% in Q2 and 6.3% in Q3 2010. The shortage of stock is most severe in the west London submarket, where the vacancy rate stands at just 2.9% of total supply, the lowest level for nearly 10 years.
Meanwhile, rents rose by 1.4% from Q2. JLL is expecting annual growth of 1.4% for the whole of 2011, taking the average prime rent in the region to around £28 per sq ft.
joanna.bourke@estatesgazette.com
