Office market conditions are finally showing signs of improvement across the M1 Corridor and, with further transactions in solicitors hands, the outlook is promising.
Unveiling LSH's latest M1 Corridor Office Market Pulse report Ian Leather, Regional Director for Office Agency, said that after a sustained period of reduced activity, Q3 reflected the trend through 2013 which has seen office take-up recover in Luton, Milton Keynes and Northampton.
Year-to-date take-up equals 2012's total
The report reveals that take-up for the M1 corridor South Midlands markets including Northampton, Milton Keynes and Luton was just over 115,000 sq ft which takes the year-to-date total to 258,745 sq ft; as a result it is already equal to 2012’s total.
With several key transactions having been delivered we would expect the Q4 figures to accentuate the recovery and provide a platform for further improvement in 2014. The region has seen two of the largest deals in the wider regional market concluded with Kimberley, a 63,000 sq ft office building on the Bedford by-pass being sold, and a 36,000 sq ft letting at The Pinnacle in Milton Keynes which is the largest letting in the town for several years.
Region’s supply remains static
Ian said: “Occupiers are trading up into better quality space, so supply along the M1 Corridor has remained largely static, despite robust take-up. The shortage of good quality stock across the region continues to hamper the office market and, with a swelling in both take-up and demand, this situation is only likely to worsen in the short-term.
“In the M1 Corridor markets, demand registered during the course of Q3 2013 peaked against five-year averages with Luton at 136%, Milton Keynes at 167% and Northampton at 114%.”
He added: “It is perhaps too early to suggest a wholesale change in fortunes for the office markets, but these results are certainly a step in the right direction.”