Available Grade A offices in Thames Valley are in short supply, causing businesses that are seeking high-quality office space to look in other regions. The news comes from research conducted by a commercial property consultancy firm, Lambert Smith Hampton (LSH).
Nick Coote, Head of the Thames Valley team at LSH, expressed: “The quality vs supply dynamic is becoming an increasing issue for the Thames Valley’s office market. While we are seeing take-up quickly reducing the available stock, there is limited replacement product in sight. Over the coming year we hope to see commercial property investors becoming braver, and occupiers relocating due to lease events or resizing of their business operations are likely to struggle when it comes to acquiring the best quality space.”
Figures from July-September 2011:
Grade A Offices in Nottingham are also experiencing similar trends to Thames Valley, as Phil Quiggin, Director of Lambert Smith Hampton’s (LSH) Nottingham office, stated: “The office sector in the region has undoubtedly felt the impact of difficult market conditions over the last two to three years.”
However, there is a constant supply of non-Grade A calibre offices available, but whether businesses will ‘downgrade’ their office needs is another matter, as Mr Quiggin stated: “[There is] higher demand for second-hand space, but there is an added supply problem with much of the space being out-dated or unfit for purpose.”
“However, most space available is second-hand and much of it is inferior and incapable of meeting modern occupier requirements.” Understandably, we’ve seen a limited appetite for speculative development, and new-build schemes are unlikely to get off the ground without pre-lets in place,” Mr Quiggin added.
So what can commercial property landlords do to help ease the demand pressure in Thames Valley and Nottingham? Landlords could consider refurbishing their current office spaces to meet Grade A standard, as Mr Quiggin put across: “There is a need for landlords to look at comprehensive refurbishment options if they are to attract occupiers who have been unable to find suitable grade-A or grade-B office space.”
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