Despite faltering take-up caused by Brexit uncertainty in the short term and an ongoing lack of supply, occupier enquiries are increasing, particularly among SMEs, rents are expected to hold their position and demand for prime and good quality secondary assets has remained steady in the investment market. We hope to see the current high level of enquiries start to translate into a healthier level of take-up by the end of the year.
Andy Hodgkinson, office agency director, Lambert Smith Hampton, explains: “It can be no coincidence that the period leading up to the EU Referendum vote saw limited market activity. The long-term impact of the UK voting to leave and whether this will slow economic growth in the region or act as a catalyst is difficult to forecast. The reality is it is likely to benefit some and not others. For example, weakened Sterling against both the dollar and the euro may have a positive effect on export businesses. However the financial services sector may be adversely affected.
“What is clear is that enquiry levels have improved and this is likely to result in take-up recovering in the second half of the year. With the South Coast continuing to suffer from a limited supply of office space and, in particular, grade A offices, those occupiers who are expanding and looking to relocate to better quality space will have limited choice and lease terms will reflect this.”
Jerry Vigus, capital markets director, adds: “The investment market is currently in a period of uncertainty following the result of the EU Referendum. Leading up to the vote, values remained fairly consistent but have since plateaud on prime offices and reduced in the secondary market. The most active sellers currently are retail funds. On the buying side, due to the drop in values, we are seeing more property companies coming back into the market looking to secures opportunities”.
