Viewpoint: Signs of spring for the Office Market
30 March 2005.jpg)
I hesitate to use that well-worn expression 'green shoots of recovery' but considering what's happening in the UK office market it's hard not to feel the fresh breeze of confidence blowing.
Phones are ringing, enquiries are rolling in and the signs are that good quality occupiers are looking for good quality space again. In my own office in Slough, the level of enquiries has increased steadily since the start of the New Year and the fact that more and more people are getting their deal-signing pens out confirms we are moving in the right direction. In the Thames Valley - which I feel reflects the general shape of the market across the UK - there is a growing confidence that occupiers are shrugging off the hesitancy, which has marked the sector over the last couple of years, and that there is money to be spent on the right office at the right price. 'Good quality occupiers are looking for good quality space.'
This growing optimism is supported by positive news across the country. At Canary Wharf, news of deals totaling over 200,000 sq ft (18,580 sq m) was reported in early February as Cantor Fitzgerald and FTSE took space. Up in Leeds, O2 has completed one of the city's biggest out of town deals in years by taking 87,000 sq ft (8,080 sq m) at White Rose Office Park. The indications of an increase in transactional activity are, unsurprisingly, matched by signs that rents are starting to creep up again. In the City, which I expect to lead the upward moves, heightened demand is already having a knock-on effect on rents. Our own Central London Office Report predicts headline rents could reach £52.50 psf by the end of 2005 compared with £47.50 psf last year. Other agents are also predicting that London 'has turned the corner' so there is genuine confidence of better times ahead.
'Without being rash, I think we can look forward to a lively, busy and rewarding year which will really give us the chance to show what the collective power of our UK market presence can do.'
Charles Rowton-Lee is Lambert Smith Hampton's Head of the Slough office and the Divisional Co-ordinator for Offices.
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