Market snapshot

Office Market Pulse South Coast Q2 2013

In Q2 2013, South Coast office market take-up remained at a similar level to Q1 2013, with total office take-up at 61,339 sq ft. Office enquiry levels also remained on par with Q1 2013. While South Coast office supply increased by 4.5% on the last quarter. Two key office investment deals also took place this quarter.

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In this issue:

South Coast office take-up on par with Q1 2013

•  Office market activity in the South Coast remained at a similar level to Q1 2013. Total office take-up in the South Coast was 61,339 sq ft, only a slight drop from the 61,865 sq ft recorded in Q1 2013.

•  Enquiry levels also remained consistent with Q1 2013. The majority of office enquiries were for office space below 20,000 sq ft.

Occupational transactions above 2,500 sq ft: Q2 2013

Property  Size (sq ft)  Landlord(s)  Tenant  Lease info 
1000 Lakeside, Portsmouth 12,500 sq ft Highcross Johnston Press (Portsmouth News) 15 year lease. Confidential terms.
 Oakhill House, Southampton 6,856 sq ft KAG Limited Solent NHS Trust Confidential Terms
Unity Building, Fareham 5794 sq ft  Confidential Ideal Window Solutions  Freehold sale. £195,000
Gamma House, Southampton 4,000 sq ft Southampton Science Park Blade Dynamics Quoting rent £18.50 psf

Increase in office supply driven by Grade C space

•  South Coast office supply totalled 1.88m sq ft, an increase of 4.5% on Q1 2013 figures. Grade C space saw the biggest increase on the previous quarter, rising by 11%, compared to only 3% increases in both Grade A and Grade B space (although Grade B space still dominates overall at 69%).

•  Nearly 74% of all South Coast Grade C availability is in town, providing the potential for conversion to alternative uses, including residential.

•  City centre prime rents remained at £18.50 per sq ft, while out of town prime rents were £18.75 per sq ft. Out of town rents experienced downward pressure with Grade A supply levels higher compared to city centres. Winchester rents out-performed other city centres within the region (constrained office supply helped to maintain higher rents).

•  A significant amount of total South Coast office supply now falls into the sub-5,000 sq ft category, so to give a more accurate reflection of the market supply our analysis now includes availability above 2,500 sq ft.

Key investment deals in Q2 2013

•  This quarter saw two key office investment deals in the South Coast:

•  Enterprise House in Portsmouth was sold by LaSalle Investment Managers to Ashville Group for £3.05m, reflecting a net initial yield of 15.95%. Enterprise House has a floor area of 52,552 sq ft and is multi-let to tenants including Serco, First Secretary of State and Mapeley ABI. 

•  1-8 Queens Terrace in Southampton was purchased by Kingsbridge Estates Ltd for £1.2m. The property is being marketed for offices while alternative uses are being explored.

•  For more investment deals, follow our quarterly publication UKIT, available to read on our website.

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Andy Hodgkinson

023 8071 3075

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Andy Hodgkinson
Director - Office Advisory

023 8071 3075

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