South Coast steady

JLL has just published its Q3 2016 report on the ‘South Coast Metropole’, covering Portsmouth, Southampton and Bournemouth. The headlines are that prime building office rents reached £21.50 per sq ft; there has been a 6% increase in take up from this time last year and there is a shortage of new office schemes coming through the pipeline. The market has generally stabilised after the initial shock of the Brexit vote.

In Q1 – Q3 2016 there has been a 16% increase in take-up compared to the same period last year. Take-up has risen from from 337,366 sq ft in 2013 to 419,160 sq ft in 2014 and to over 500,000 sq ft in 2015. The largest letting over the last year was Utilita Energy which took circa 52,000 sq ft at Hutwood Court, Chandler’s Ford. More recently Just Develop IT  took 25,000 sq ft at Segensworth; Peach Telecom took 14,000 sq ft at Fareham and One Insurance took 12,500 sq ft at Chandlers Ford.

The south coast remains a popular location for businesses in the defence, technology and financial sectors. JLL point to a trend for larger occupiers moving to out-of-town locations due to lack of suitable new schemes in city centres.

Metropolis is tracking over a dozen companies looking for over 10,000 sq ft of offices in Portsmouth, Southampton and Bournemouth.

The occupational market in the region is being been driven by lease events with companies consolidating into single buildings or relocating to take advantage of newly refurbished, better quality accommodation, often from cellular offices into more modern open plan space.

Speculative office development has been quiet with the exception of one building at Southampton Science Park and in Bournemouth, One Vision is currently under construction as part of a mixed use scheme where offices will be provided up to 83,300 sq ft by 2018. Development sites at Royal Pier Waterfront in Southampton, Lakeside Northarbour in Portsmouth and Chilcomb Centre in Winchester may as a result, see new offices built, as supply continues its steady decline.

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