No Thaw In The Commercial Property Market - B4 Article Spring 2013
Despite the disappearance of January’s snow there is little warming in the commercial property market. VSL’s research also points to a lack lustre market in 2012.
The general theme continues to be limited demand for both office and industrial space. At the same time, supply levels are still high whilst generally declining as a consequence of no new build and limited Receivership/Administration causalities. The best quality office and industrial buildings have now been taken up. We foresee that in 2013 some limited speculative development may occur and rental incentives may reduce towards the end of the year and into 2014.
The OFFICE Market Take up in 2012 was the lowest on record at only 135,000 sq ft, a reduction of 50% from the 2011 take up. Even stripping out the pre-let Centrica deal (82,000 sq ft) from last year’s figure this still provides a 30% decrease.
The 5 year average from 2008 to 2012 is 240,800 sq ft and so this further demonstrates how the market has slowed in 2012. The city centre office market remains strong with supply of only 60,000 sq ft in comparison with 330,000 sq ft on the ring road.
Milton Park however is operating at near full occupancy with rumours of two new speculative offices being built in the near future.
The INDUSTRIAL sector has seen a slight increase of 3% in take up to 521,000 sq ft. Demand is still sourced predominantly from locally based companies with the majority of deals being leasehold due to difficulties with funding.
The key deals being 66,000 sq ft sold to a confidential purchaser in Bicester and 70,000 sq ft let to All Makes 4x4 at Milton Park. Supply levels have reduced by 16% from 2.27M to 1.90M sq ft. Units over 100,000 sq ft still account for over 35% of the total supply. The only new development is a scheme totalling 25,000 sq ft of industrial hi tech units at Milton Park on Olympic Avenue. We are still seeing a lack of good quality medium sized stock and development land continues be a scarce commodity throughout the rest of the county.
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