Market snapshot

M1 Corridor Office Market Pulse Q4 2014

Along the M1 corridor, mixed results were seen with regards to take-up in the final quarter of 2014. Overall, the limited availability of Grade A space is becoming an increasing issue and this is expected to lead to rental increases throughout 2015.

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In this issue:

Mixed results along the M1 corridor

  • Mixed results were seen along the M1 corridor in Q4 2014 with total take-up reaching 619,979 sq ft.
  • Milton Keynes saw the highest activity in 2014 with over 240,000 sq ft from take-up in units over 5,000 sq ft. Q4 take-up reached 63,406 sq ft, improving on the Q3 figure of 37,286 sq ft.
  • Northampton saw a strong end to the year with Q4 take-up reaching 60,851 sq ft and total take-up for 2014 of 198,900 sq ft, a 19% increase on 2013. Northampton also saw the largest deal at Lakeside House, however limited Grade A availability will limit occupier choice in 2015.
  • Luton saw total take-up in 2014 of 181,000 sq ft compared with 236,000 sq ft in 2013. In the final quarter of Q4, take-up reached 52,165 sq ft. The loss of older office stock for alternative uses is one of the main reasons for this, a result of the extension of permitted development rights (PDR).

Grade A space is limited and rents are rising

  • Along the M1 corridor, Grade A space stands at 273,532 sq ft against a total stock availability of approximately 8 million sq ft, the lowest in recent memory. With limited development on the horizon, we expect this to fall further.
  • In Milton Keynes, the expected deal with Grant Thornton, which would see speculative Grade A space being constructed, has yet to materialise.  High quality refurbishment at Kents Hill Business Park and 252 Bouverie Square should improve the situation.
  • With this lack of grade A space, the biggest impact on the occupier market has been the sharp movement in rental growth with Milton Keynes rents for refurbished Grade A and B space reaching around £19 per sq ft.

Enquiries are rising

  • 2015 is set to be a key year with the alignment of lease activities from previous cycles. It is anticipated that the level of demand will increase as occupiers utilise lease activities to exit older stock.
  • Occupiers will seek to acquire high quality space as they become frustrated with over paying for low quality buildings with poor services and limited environmental credentials.

Key transactions, Q4 2014


Size (sq ft)

Landlord/ Vendor Tenant/ Purchaser Lease information
Willen House, Milton Keynes


Chapman (Unisys Ltd)


Let at £9.50 per sq ft

Wavendon Tower, Milton Keynes


Private investor ISP Childcare Let at £9.50 per sq ft
Phoenix House, Luton


Private investor Private investor Freehold sale of a building for alternative use
Midland House, Luton


D Kohler YMCA Freehold sale of a building for alternative use
Lakeside House, Northampton


National Grid Travis Perkins Sub lease from National Grid at an undisclosed rent for a term of seven years
Riverside House, Northampton  11,000  LPA Receiver Rental Care Services Lease for a term of ten years with the option to to break in year seven or eight. Headline rent of £11.00 per sq ft

Investment is rising in the regions

The latest edition of Lambert Smith Hampton’s UK Investment Transactions report reveals that investment in the UK regions increased by 41% to £21.1bn for 2014 – the second highest figure on record. This is primarily the result of the resurgence of UK institutional investors – which increased inflows by almost 30% in 2014 – buoyed by improving economic sentiment beyond the capital.

Download the full report here.


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