Market snapshot

Office Market Pulse M1 Corridor Q4 2013

The M1 Corridor office market finished the year on a high with total take-up reaching record levels across the region during Q4 2013.

You can download a PDF version of this M1 Corridor Office Market Pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here.

In this issue:

Take-up reaches new highs across the M1 Corridor

  • Milton Keynes saw a series of significant transactions in Q4 2013 with office take-up reaching 110,383 sq ft; the highest quarterly take-up since 2009. Total take-up for 2013 surpassed both 2011 and 2012, amounting to 207,822 sq ft.
  • Take-up in Northampton accelerated to 58,902 sq ft in Q4, returning an annual office take-up of 166,450 sq ft; the highest level of market activity since 2010.
  • Against a backdrop of the lowest level of take-up for five years last year, Luton office take-up totalled 130,140 sq ft in 2013 compared to 28,845 sq ft in 2012. This has been partially fuelled by a number of office to residential conversion sales.

For an annual comparison of take-up, click here.

Key transactions Q4 2013

Property

Size (sq ft)

Landlord(s)

Tenant / Purchaser

Lease information

The Pinnacle,
Central Milton Keynes

37,087

 

Aberdeen Asset Management

 

Transport Catapult

 

Confidential

 

Castle House, Marefair, Northampton

 

26,080

 

Receivership

 

NCC 

 

£25.88 per sq ft
Will be demolished and replaced with a park as part of the ‘Gateway to Northampton’ Scheme.

Wesley House, Luton

65,000

Carisbrooke

Confidential

£47.00 per sq ft
Acquired for residential conversion

Erosion of office supply continues

  • The continued decline of available office space during Q4 has resulted in the lowest levels of supply since 2009 across the M1 Corridor markets.
  • Letting activity and sales of obsolete office space for residential conversion are reducing the overall supply of second-hand buildings, further compounding the outlook for occupiers seeking alternative space. Grade A supply in Milton Keynes, Luton and Northampton reduced by 27%, 14% and 29% respectively.
  • For landlords and occupiers alike, the acute shortage of grade A space is likely to drive significant investment into second-hand office stock in the short-term.

For an annual comparison of supply, click here.

Strength in demand

  • Q3 2013 saw a sea change in levels of demand along the southern M1 Corridor, and this trend continued throughout Q4 and into the start of 2014.
  • Across the M1 Corridor markets, total demand registered in 2013 reflects the highest recorded levels against five-year averages; Milton Keynes 17%, Luton 109%, and Northampton 43%

For an annual comparison of demand, click here.

Regions see upturn in investment activity

2013 was the year that the market started to witness a significant change in the investor sector as the weight of money circling London finally started to impact the regions.

The M1 Corridor has seen a major shift in the volume of regional activity, transacting circa £48m during Q4 2013. To view the region's key transactions, click here.

To read our latest UK Investment Transactions (UKIT) report, please click here.

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