A healthy Q1 for the office market in the South Coast region saw enquiry levels bounce back after a quiet Q4 and take-up was maintained at the quarterly average, albeit dominated by the letting of Hutwood Court in Chandlers Ford.
Supply continues to fall though, and with a continued desire from developers to remove space from the market for conversion to residential use, we expect the supply available to fall to below 1m sq ft by the end of 2016.
Andy Hodgkinson, director of office agency for Lambert Smith Hampton’s South Coast team, comments: “The diminishing availability of office space, in particular Grade A space, along the South Coast is driving rents up, but it is worth noting that these are still only back to levels that were being achieved 25 years ago!
“The region is in dire need of new offices to meet the changing demands of today’s occupier market and to deliver this, rents will have to rise further. There will be a recalibration in the market and prime rents for new build offices in the best locations will inevitably have to set a new benchmark for the region.
“Given that the fall in available supply looks set to continue and demand is being maintained, the scenario where this becomes reality is getting closer, following a trend that is already evident in other regional office centres in the UK.”
