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LONDON, 19 July 2013 – Research released today byJones Lang LaSalle shows that the Western Corridor continues to be a prime choice for organisations looking to locate in the South East. 608,000 sq ft of office space was let in quarter two (Q2), an 11% rise on the previous year’s second quarter, taking the half year figure to 1.3 million sq ft let.
Take up in the Thames Valley doubled that of the previous quarter with 442,900 sq ft let, though West London witnessed a 60% drop in activity compared to Q1, due to restricted supply, with lettings totalling 165,200 sq ft.
While the Western Corridor experienced steady demand throughout Q2, supply was 5% lower than the previous year. Grade A availability was restricted across the region, with West London’s vacancy rate at 2.5%, compared with 8.3% in the Thames Valley. This lack of Grade A space increased prime rents across the Western Corridor by 3.9% year on year, to £28.96 per sq ft. By area, West London experienced a 6.4% rise and Thames Valley a 0.9% rise.
James Finnis, Head of South East Office Agency at Jones Lang LaSalle said: “The lack of available Grade A space has created a need for new developments across the Western Corridor.
“Steady demand has instilled confidence in the market and as a result there is currently 815,700 sq ft of space under construction on a speculative basis, which will potentially complete in 2013. As two thirds of this is in West London, occupiers will have Grade A options to acquire which will boost activity in the region in the latter half of this year and the start of 2014."
The Western Corridor investment market remained buoyant, with £411.5 million transacted in Q2, almost three times the level achieved in Q1 2013. The half year total stands at £556.5 million, which is almost equivalent to the full year total for 2012.
Commenting on the investment market, Angus Minford, Director, South East Office Agency said: “The continued occupational improvement in the Western Corridor is being reflected in the growing weight of money looking to invest in the area.
"This is across both prime and secondary assets as well as development opportunities and comes from both UK and Global sources. Investor demand is now generally outweighing supply across the board."
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