The office space vacancy rate hit an astonishing 21% in June, which is the highest it has been for 18 years. Despite this, new space is still being built. However take up of office space actually improved in Q2 of this year compared to Q1, surprising many analysts. In Q2 29,000 sq m of office space was completed, with 78,000 sq due to be completed by the end of the year.
Some would argue that a “serviced office is a serviced office” and that this infers that they are pretty much of a muchness inside. Many corporate style suites will be similar in appearance because this is what the majority of tenants will demand. The reason serviced offices have been so successful with corporates as they know that they can move into one, wherever that may be from Atlanta to Zurich, and that they will know what to expect.
Take up of office space in Manchester was lower in the first two quarters of this year compared to the same period last year, but should recover by the end of the year. The take up level was above the ten year average however. Over 247,000 sq ft of office space in Manchester has been let since January. However another 300,000 sq ft is under offer with a possible 200,000 sq ft in deals that should go though before the end of the year.
The City of London will be the area that will revive the capital’s office space market. That’s the view of Helical Bar Plc CEO Mike Slade. He said he planned to start building again in two years and that the City would “rebound” the fastest.
The company has not focused on the area since the early 1990′s. The value of the offices in this area have fallen by half since the peak of mid 2007. However with prices so low, there is only one way they can go once the market has bottomed out. The company were the first to build a scheme after the last recession without a pre let agreement. With rents falling 33% from the 2007 peak, large commercial building projects may not start again for another 24 months, experts say.
With the West End beset by an exodus of private equity companies and Canary Wharf crippled by job losses in e Banks, the City appears to be the key office market that will recover first.
Two seminal office schemes, the â€œCheesegraterâ€ and “Walkie Talkieâ€ buildings have been postponed due to the sluggish market conditions.
Barclays is to take office space in Manchester‘s Spinningfield’s business district. The banking giant was scheduled to take 80,000 sq ft at 3 Hardman Street which was to be used for the Barclaycard division, but changed it’s mind on the deal. The deal which has gone through is a 15-year lease for 36,000sq ft of space. The bank will place it’s Commercial Banking division, moving 270 staff from around the City into one location.
Avanta have teamed up with Entrepreneur Country to offer budding UK business people a step up into the world of serviced office space. They are offering members of Entrepreneur Country a 20% discount on their ready to use office space and on demand meeting rooms. The community which was set up by Ariadne Capital has members who will be looking to grow businesses and help drag the UK out of recession.
The commercial property market in the UK may slowly be seeing signs of recovery, with RICS members reporting a slowing in decline of tenant demand in the retail and office sector. The fall in demand and confidence in the market slowed to the lowest rate since Q3 2007, when the credit crunched really started to take hold.
The office space market in London is beginning to recover, according to commercial property experts. Although rents are continuing to fall, in some areas they are stabilising. Investments levels are also continuing to increase, in particular from overseas investors.
With commercial property prices being so low in the capital, investors have been attracted to strong yields. Most of the acqusitions have been in prime areas such as the West End, which is where rents rose the most during the boom time. The commercial property market is likely to be one of the first sectors to recover out of recession.
Just seen a PPC ad for Mini Offices. These guys have been around for a while now, so I thought it would be worth giving them a mention. If you look at their website they offer easy to install office space in your garden. Yes that’s right in the garden. Seeing as I only have a communal garden, this would not suit my circumstances, however, it’s clearly been of interest to some people.
The office space market in Bristol may soon be starting to improve, according to local commercial property agents. The total investment transactions for 2009 equal Â£54.2m, which is twice the amount for the first sixth months of 2008. Much of the investment has come from cash rich overseas investors. Prime yields in the areas are also starting to stabalise at 7.73%. As well as overseas investors there is a great deal of local property companies there have invested in local commercial property schemes.