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News Release


Take up in the Western Corridor for Q1 2013 is four times higher year-on-year

Say Jones Lang LaSalle in latest Office market commentary

London, 24th April 2013 - Total take-up in the Western Corridor for Q1 2013 closed at almost 650,000 sq ft - nearly 4 times the level transacted in Q1 2012 and one third above the 5-yr quarterly average of 487,500 sq ft say Jones Lang LaSalle in their latest market update.

This strong start to the year can be largely attributed to the activity in West London where take-up reached 408,000 sq ft in Q1, compared to the 5-yr quarterly average of 247,600 sq ft boosted significantly by BP acquiring 135,000 sq ft at Building 2, Bedfont Lakes. This is the highest level of take-up during the first quarter in West London since 2003.

Thames Valley take-up totalled 234,700 sq ft in Q1, up 17% on the last quarter and is significantly up on the same period last year. The biggest transaction in this market was TAG at Farnborough Business Park (37,800 sq ft).

James Finnis, Head of South East Office Agency for Jones Lang LaSalle said: "The pace of recovery in the Western Corridor office market has quickened in Q1 2013; take up increased by 30% on the 5 year quarterly average and Grade A supply has fallen further.

“As seen in 2012, the focus for take-up is the best space. The transaction at Bedfont Lakes marks a sea change with a major corporate taking a pre-let rather than re-gearing in existing space.  We are forecasting take-up in excess of 2.25m sq ft for 2013 with deals being driven by the pressing issue of obsolescence backed up by the hard deadline of The Energy Act.  There will be further pre-lets in 2013 which will help to drive rents forward as Investors/Developers with new schemes will not be prepared to take the development risk unless they are seeing an adequate return."

Current supply in the Western Corridor is down approximately 5% Q-on-Q and Y-on-Y with the largest fall recorded in the Thames Valley.

The Western Corridor vacancy rate is down from 14.8% at end-2012 to 14.0% at the end of Q1 2013. Looking at specific markets, the West London vacancy rate currently stands at 8.5% and the Thames Valley market considerably higher at 19.8%. Grade A vacancy rates in West London stand at 2.4%, 7.7% in the Thames Valley and 5.0% in the Western Corridor.

Angus Currie, Head of South East Tenant Representation at Jones Lang LaSalle said: “More than ever occupiers are focused on being in the right location to retain and attract talent. This is borne out by the variations in market strength within a relatively small geographic region. With the increasing tightening of good quality supply, particularly at the larger sizes in the hotter markets, we are continuing to advise clients to plan further ahead to protect their options and costs as we move towards a pre-let market.”

Average rents increased by 4.8% Y-on-Y across the Western Corridor totalling £28.63 psf.  Thames Valley rents remained stable Q-on-Q and Y-on-Y with growth remaining concentrated in West London where rents have increased by 1.3% Q-on-Q and 8.7% Y-on-Y

There is 2.4 million sq ft of active named demand in the Western Corridor which is on a par with this time last year, and provides a solid base for the market going forward. 

Commenting on the investment market, Angus Minford, Director at Jones Lang LaSalle said: “The continuing improvements in the Western Corridor occupational markets has resulted in further demand from investors across the board for prime and secondary stock. Although the traditional UK-based investors continue to hold a significant share of the market there are increasing numbers of overseas investors who are becoming competitive. The main concern is the lack of availability of stock which if it continues is likely to result in increased competition for assets and the hardening of pricing.”