15.11.2011The latest South East Office Snapshot from Colliers International has revealed that despite uncertainty in the economy, and a resulting low volume of turnover, the South East offices market continues to strengthen. Key findings: Total M25 availability fell for the second successive quarter to stand at its lowest level for 12 months. Take-up surged in Q3 2011 rising by over 100% quarter on quarter. Q3 take-up totalled 1.2 million sq ft, which was the highest quarterly take-up since Q4 2010. Overall, Thames Valley availability fell by 2% to reach 9.5 million sq ft. This is the lowest level of availability in over two years and represents an annual reduction of 6%. The North M25 recorded its highest quarterly take-up since before the onset of the credit crunch, with Iveco (75,000 sq ft) in Watford and SOG plc (33,000 sq ft) in Hemel Hempstead. The technology and media sector continues to drive demand in the South East market, accounting for close to 1 million sq ft of take-up in units over 5,000 sq ft in the year to date. Guy Grantham, Director of Research & Forecasting at Colliers International commented: “Although starting from a low level, the Thames Valley saw take-up double quarter on quarter with a number of deals that had been under offer in Q2 2011 completing. Thames Valley vacancy now stands at a two year low. “The North M25 recorded its highest quarterly take-up since before the onset of the credit crunch with major deals to Iveco (75,000 sq ft) in Watford and SOG (33,000 sq ft) in Hemel Hempstead. Total deals over 10,000 sq ft accounted for 165,000 sq ft of take-up, compared to just 44,000 sq ft in the entire first six months of 2011. “The Technology and Pharmaceutical sectors remain extremely active and have been the key drivers of demand in 2011. The technology sector alone has accounted for over a third of all take-up in 2011 across the South East. For take-up of units in excess of 5,000 sq ft, Technology and Pharmaceutical occupiers account for 45% of all transactional activity since the start of 2010.” Philip Papenfus, Head of South East Offices at Colliers International commented: “We continue to see some progress in the overall health of the South East Office Market. However the volume is low based on historic turnover of space, a reflection of the uncertainty in the wider Economy. “The market has again for this year been characterised by lease event led requirements and we will need to see more ‘balance sheet’ confidence return to see the larger corporate moves. We will also see a far greater number of named occupiers which we would hope might lead to further improvement next year when combined with the reduction in availability of Grade A supply in some prime centres, such as West London where there is now some evidence of rental growth.” Download the South East Offices research report here.