Latest Issue - Q3 2011

Highest take-up in four years reduces the availability rate to below 5%

Southbank take-up was at its highest level in four-years in the 3rd Quarter at 370,000 sq ft, more than twice the quarterly average. Previously, in 2005-2007, high take-up was driven by major lettings or pre-lettings for large, new developments but it was not the case in the 3rd Quarter 2011. A combination of significant lettings for Grade A space between 20,000 and 40,000 sq ft and an overall increase in the number of transactions pushed take-up to a record level for this cycle.

Southbank office availability fell by 17% in the 3rd Quarter from 1.15 million sq ft to 950,000 sq ft, largely a result of the enhanced take-up for the quarter. The availability rate fell by 1.1% points to 4.9%, the lowest rate in Southbank since the 4th Quarter 2009. Secondhand availability fell 21% to 839,000 sq ft due to exceptional take-up of secondhand Grade A space. New and refurbished supply increased by 25% to 111,000 sq ft, but the absolute increase was low at only 22,000 sq ft.

Despite strong take-up and a relatively low availability rate, construction activity remained low in the 3rd Quarter. The only significant, stand-alone office development underway outside LBQ is the 50,000 sq ft redevelopment of The Harlequin Building, 65 Southwark Street. Advised by Farebrother, developer Moorevale and their funding partner Rockspring are undertaking a major reconstruction and extension of the building, due for completion in March 2012. The current development pipeline shows a gap in supply for medium sized redevelopment and refurbishment schemes. More development is needed to accommodate local occupiers seeking to upgrade and occupiers from other Central London markets looking to achieve better value for money.

For further information, please contact Lizzie Cave on 020 7855 3531.

Quarter 2 2011

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Quarter 1 2011

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