The South East office market recorded its highest quarterly take up figure in five years during the fourth quarter of 2023, hitting 1.1 million sq ft according to the South East Snapshot report from Colliers.
The quarter also marked only the second time in five years take up surpassed 1 million sq ft during a three-month period. The firm notes that the increase in take up was driven by a higher number of larger unit sizes that transacted. Some 16 units in excess of 20,000 sq ft transacted in Q4 alone, compared to 22 for the whole of Q1-Q3. As a result, average deal size rose to 16,488 sq ft in Q4 23, up from 12,999 sq ft in Q4 22.
Key Q4 transactions include Wood Group taking 120,000 sq ft at 400 Longwater Avenue on Mapletree’s Green Park, relocating to a best-in-class building within the Reading market. Also 75,397 sq ft was acquired by Air Products at 1000 Hillswood Park in Chertsey and Stanley Black & Decker secured a 30,066 sq ft pre-let at Legal & General’s Tempo in Maidenhead.
Willem Janssen, Head of South East Offices at Colliers, comments: “The strong fourth quarter means that we ended 2024 with south east vacancy at 12.4 per cent, a 12-month low and 60 per cent of locations we monitor saw a fall in availability. A significant proportion of demand has come from occupiers looking to secure the best office stock in the region, not only in accordance with their ESG goals, but to provide working environments that their staff want to be in as the return to the office continues at pace.”
The report shows that Woking, Guildford, Maidenhead and Watford all saw significant reductions in vacant space, with vacancy falling to an 18-month low across all four locations. Key locations across the South East have also seen an upward movement in prime rents. Central Maidenhead has seen a new high of £51 per sq ft achieved at L&G’s Tempo scheme, against the previous headline of £40 per sq ft. Chertsey, Crawley, Croydon and Reading (out of town) all saw growth of 5 per cent in Q4.
Guy Grantham, director in the Research team at Colliers, added: “Following several quarters of stasis within the market it was fantastic to see the year end on a high with reductions in vacancy and associated rental increases. Construction levels continue to be healthy and we are monitoring approximately 2.6 million sq ft of new office space currently under development across the wider South East. However, as demand is continuing and almost a third of this, amounting to 726,000 sq ft, has been pre-let.”
