Market snapshot

Hertfordshire Office Market Pulse Q1 2015

The Hertfordshire office market got off to a slow start in the first quarter of 2015, with only a handful of significant transactions. Whilst the level of supply has stabilised, we expect more to be lost through permitted development rights (PDR) in the coming months.

In this issue:

Enquiries and take-up fall

  • Q1 witnessed a noticeable fall in the number of enquiries over 5,000 sq ft in the region, which can be partly attributed to a lack of stock and a degree of corporate indecision prior to the General Election.
  • For deals over 5,000 sq ft, take-up across the major commercial centres in Hertfordshire also fell with 36,884 sq ft of take-up in comparison to 105,557 sq ft in the previous quarter and nothing reported in this size range in either Watford or Welwyn Garden City.
  • The most noteworthy deals were 10,398 sq ft in Hemel Hempstead at the Progression Centre and a combined 14,000 sq ft  at 45 Grosvenor Road in St Albans.

Supply remains limited

  • The supply of offices in the region has remained largely the same as the previous quarter. More is expected to be lost through PDR over the coming weeks and there is still no development in the pipeline to replenish stock.
  • Whilst PDR will continue to have an impact in the coming months, the May 2016 deadline for completion is fast approaching. We will wait with interest to see the outcome of the election and whether or not the deadline is further extended. Future planning policies will be absolutely crucial to determining supply in the short to medium term.
  • St Albans was the only Hertfordshire location to see an increase in availability with 4 Beaconsfield Road coming to the market. This building offers 24,000 sq ft of much needed grade A space.
  • We anticipate Hemel Hempstead’s supply to be boosted in the next 18 months with two large office buildings due to be refurbished, bringing well over 200,000 sq ft to the market.

Rents remain static

  • Similarly, rents have not changed since the previous quarter. Year-on-year, rents have seen a slight increase in St Albans town centre moving from £23 per sq ft to £25 per sq ft. Welwyn Garden City has also witnessed a slight increase in rents over the year. Both Hemel Hempstead and Watford have remained constant.
  • The limited level of stock, particularly grade A offices, will continue to diminish incentives and we expect to see rents increase before the end of the year.

Key transactions, Q1 2015


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
Progression Centre, Hemel Hempstead


Eyre Estate Investment Fund

Dispute Service Ltd

£13.46 per sq ft. 14 year lease

South Wing, Focus 31, Hemel Hempstead


BMW Trustees Beck Optronic Solutions Ltd £8 per sq ft. 10 year lease with tenant only break option after five years. Six months rent free
West Wing, Focus 31, Hemel Hempstead


BMW Trustees Beck Optronic Solutions Ltd £9.50 per sq ft. 10 year lease with break tenant only break option after five years. Six months rent free
45 Grosvenor Road, St Albans


Greenhills Asset Management Futuresource Consulting Ltd £16.50 per sq ft
45 Grosvenor Road, St Albans


Greenhills Asset Management Opal Ltd £16.50 per sq ft. Six months rent free


Continued interest in office investments

There has been continued interest in office investments in Hertfordshire over the quarter. The outstanding transaction was 142,500 sq ft at Diamond Point in Hemel Hempstead which completed in January.

For more information click here.


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