Supply of South Coast office space for Q3 totals 964,698 sq ft, which is 117,646 (11%) lower than the previous quarter and a 17% fall from Q3 2017. Both grade A and C stock have seen the largest reduction in availability over the last quarter with 60,662 and 60,343 sq ft being removed from the market respectively.
When this is compared to Q2 in terms of a percentage reduction, we can see a 17% reduction in grade A space, and a 30% reduction in grade C space. We can attribute the reduction in availability for grade A space being led by tenant demand for a higher quality space, rather than refurbished lower grade stock. Reduction of grade C stock is the result of continuing redevelopment for alternative uses rather than the refurbishment and remarketing of the stock, which has become a common trend within the market.
Comparing Q3 2018 to Q3 of the previous year (2017), Grade A stock has increased 2% but grade C stock has fallen by 56% from 320,970 sq ft to 142,142 sq ft. Grade B has fallen slightly with a 4% reduction (22,164 sq ft). When put in comparison to each quarter from Q2 2017 up to Q3 2018, you can see that Grade A stock has remained quite steady with a slight peak in the last quarter. Grade B stock has also remained quite steady, but does seem to be following a negative trend. Grade C however does have a negative correlation with a 60% reduction in stock.