M25 Market – Moving up a Gear

A report out this week, by property consultant Knight Frank on the M25 motorway office market, highlights take-up of over 750,000 sq ft during Q1 2014, which is the highest total of office deals in a quarter since 2008. The 57 transactions was the highest in a three month period since 2007 and some 2.7m sq ft of office take-up is forecast for the whole of 2014.

Notable deals included TK Maxx taking 47,000 sq ft in Watford; UKTV taking 34,000 sq ft in west London and Samsung taking 15,000 sq ft in Chertsey. Knight Frank calculate that there is 5.8m sq ft of unfulfilled office requirements around the M25 with finance, telecom, technology and retail sectors leading the way.

Metropolis Research bears these numbers out, with over 50 searches underway around the M25, listed on the database. These include ongoing office requirements from companies such as Thomas Cook, Travelport, Pourshins and Webfusion.

Looking ahead, there are over 100 mid-large sized companies with lease expiries coming up over 2014 and 2015. Metropolis is tracking decisions in Surrey, East Berkshire, South Buckinghamshire, Hertfordshire, Essex and West Kent over the next two years and these are likely to prompt more deals. In particular there is a spike of office lease expiries in 2015 around Heathrow and the Woking/Guildford area

The expansion of the technology sector has prompted overseas companies, particularly from the US to start searches around Heathrow and an improved economic confidence is likely to drive a further rise in deals over the next two years.

 

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