• Supply increased by 7.3% from 1.219m sq ft in Q3 2015 to 1.316m sq ft in Q4. Based on current take-up levels, this still reflects less than three years’ supply
• Availability at the start of 2015 was 1.507m sq ft which therefore reflects an overall fall across the year of 12%
Q4 2015 saw some much needed high quality space return to the market, such as at Building 3000c, Solent Business Park (53,000 sq ft) and Buildings 2000 and 3000 Lakeside (115,507 sq ft) which are undergoing refurbishment by owners Northwood Investors. Work has also commenced on the region’s first speculative office building since Charlotte Place at Southampton Science Park (36,000 sq ft), again providing grade A space. This is due for completion in September 2016.
Office space leaving the market for alternative uses via permitted development or successful change of use applications continues to play a major role in the reduction of supply in the market.
This includes The Bond in Southampton, which had consent for a 160,000 sq ft grade A office building, but has recently been successful in its application for change of use to student accommodation. However, with office rents on the rise and with the supply/demand balance for student accommodation shifting, we anticipate offices in strong locations that may have been subject to change of use now being refurbished and retained as office accommodation. This is likely to act as a brake on the fall in supply throughout 2016.