- Grade A supply now accounts for 40% of the total, compared with 27% in 2013
- Grade B supply is diminishing – 2012 total = 6,368,000 sq ft, 2013 total = 5,474,000 sq ft and 2014 total = 4,740,000 sq ft
This polarisation is largely due to speculative development activity on the supply side and take up of quality grade B space on the demand side. Occupiers have taken the available high end grade B space out of the market, leaving only the lower end grade B space available. This cannot be replaced unless businesses give up space, which is not happening at present.
Therefore, new occupiers are increasingly faced with a choice between poor end grade B or new grade A space. Grade A facilities are being built, but occupiers will have to be prepared to pay higher rental values.