The UK office market in 2015 saw strong performance and is set to follow into 2016, according to reports.
In 2015, there was a substantial demand in the British office market, mainly the sub markets such as London, Bristol, Manchester and Liverpool.
Prime office in the core sub markets was forecast to continue into 2016, with only 2.5% of new supply being apart of the total UK stock.
Overseas capital is set to move into more core sub markets other than London, with limited supply increasing interest in more prime regional and secondary markets such as Cardiff and Newcastle.
Also in 2015, there was a strong occupier activity which drove rental growth, averaging at 2.2% nationwide. Meanwhile, Central London and South East offices had the highest rates, at 3.4% and 2.1% respectively.
Looking into this year, the British Chamber of Commerce noted that output growth will reach 2.6%, a higher amount than global EDP projections for Western European countries which is set at 1.75%, This will have an overall positive impact on the UK office market at large.
Growth in sectors like creative, media and tech, are in turn putting pressure on rents and driving vacancy rates to new lows.
Other sectors, such as the resurgence of financial and banking sectors, will benefit the UK office market over the next 12 months due to the employment increase.
At the end of 2016, rental growth rates are to be 4% higher than the past 10 year average, which will benefit landlords and investors who have assets in the core UK office markets.
A combination of positive consumer sentiment and low inflation, along with an above average in the latest optimism index, will lead to an encouragement in business investments and drive growth further across strong regional office markets.
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