Office enquiries rising in some locations – King Sturge
As the market buzzes with reports that King Sturge and Jones Lang LaSalle are in merger talks, today we take a look at King Sturge’s latest research into the offices sector. Its survey of occupier trends across the UK during the first quarter of 2011 shows there was a sharp drop in take-up during Q1, but the number of new enquiries rose, which the firm says indicates a better second half lies ahead.
King Sturge’s analysis, which covers deals over 50,000 sq ft in central London and over 10,000 sq ft in the key regional centres, shows that slightly over 1m sq ft of office floor space was acquired in the three months to March, which was down 68% from the previous quarter and 65% lower year-on-year. There were 43 significant deals during the quarter, which was 7% below the Q4 2010 level but down 26% from Q1 2010. In the year to March 2011, office floor-space take-up was 6% lower than for the previous 12 months, and the number of deals was down 7%. The average deal size was unchanged year-on-year at 11,300 sq ft.
Over the past 12 months London has remained at the forefront of demand for office space, King Sturge notes, with its share of total take-up rising from an annual average of 35% to 46% of all floor space transacted. But outside the capital the market has been mixed. The Thames Valley region and Manchester outperformed their annual average take-up levels; however, other key regional centres performed at or below the annual average. “Analysis of floor-space take-up in the past 12 months across the regions shows that Thames Valley, Manchester and Nottingham, all outperformed the annual average, in contrast to all other regions which recorded below average annual floor-space take-up,” it adds.
King Sturge received a 13% increase in the number of significant enquiries during Q1 2011 compared with the previous quarter, across its UK network. However, the firm notes that the amount of floorspace required did not rise at the same rate as enquiry numbers – floor space required by occupiers was down 11% quarter-on-quarter. And the level of enquiries overall across the UK was the same as that received a year ago, during Q1 2010.
The firm notes that eight centres recorded higher levels of enquiries year-on-year – these were Bath, Bristol, Edinburgh, Exeter, Glasgow, Leeds, Newcastle and the South East. It says the rise in the South East was most notable, at 69% growth, while Exeter (+67%) and Glasgow (+64%) also registered large increases.
