Market snapshot

Office Market Pulse South Coast Q1 2013

Take-up of South Coast office space continued positively in Q1 2013, with 61,865 sq ft recorded - a 56% increase on the same period of 2012 (39,566 sq ft). Office investment on the South Coast saw two deals complete in Q1, totalling £4.455m. With a number of other office investment deals in solicitors hands, Q2 is expected to report a positive performance.

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In this issue:

Take-up of South Coast office space up 56% on Q1 2012

  • South Coast office take-up continued positively in Q1 2013, with 61,865 sq ft recorded. This is a 56% increase on the same period of 2012 (39,566 sq ft), and broadly in line with the previous quarter’s figure of 62,475 sq ft.
  • Take-up figures are in line with 10 year average levels for the South Coast, with the majority (97%) being of grade A or grade B office space.

Key South Coast office transactions Q1 2013

Property  Size (sq ft)  Landlord(s)  Tenant  Lease info 
1 High Street, Totton, Southampton  21,797 Head lessee: Telereal Trillium  Sub lessee: Hampshire County Council  24 year sub-lease, confidential terms 
Fusion 1, Solent Business Park, Fareham  9,500  Greenhills Property No. 33 Limited  Confidential  5 year lease, confidential terms 
Royal Court, Kingworthy, Winchester  7,095  Standard Life Investments  Pegasus New Build Ltd  10 year lease, stepped rent rising to £20 per sq ft 
Redclyffe House, Gosport  6,710  NHS body  Undisclosed purchaser  Confidential terms 
Charlotte Place, Southampton  5,265  McAleer & Rushe Group  Davis Langdon  10 year lease, confidential terms 

15% of South Coast office availability is grade A

  • Total South Coast office supply currently stands at 1.8m sq ft. The supply balance marginally leans towards out of town space (55%), and only 15% of total availability is of grade A quality.
  • The majority of low quality, grade C office space (12% of total supply) is located in town/city centres, making it ripe for change of use. This compares to 4% of grade C space being out of town.
  • Obsolete office space continues to be subject to change of use applications, with a recent example being the 1970s-built Midland House, Portsmouth. Having been vacant for nearly 10 years, it is to be demolished and developed as a new Premier Inn.
  • To see a breakdown of South Coast office supply by location click here, or click on the graph to the left for a breakdown by grade.
  • 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.

South Coast office investment on a par with Q1 2012

  • Two deals completed this quarter, totalling £4.455m. A number of office investment transactions remain in solicitors hands, indicating another positive performance in Q2.
  • Key South Coast office investment transactions in Q1 included:
    - Queens Keep, Southampton (51,532 sq ft) was sold by Aberdeen Asset Management to Ashville Group for circa £2.8m. The office building is multi-let with short term income from tenants, including HM Revenue & Customs and Thompsons Solicitors. 
    - Arena Business Centre purchased Wessex House (20,808 sq ft) and Threefield House (13,914 sq ft) in Southampton from receivers for £1.655m, reflecting a capital value of £47.66 per sq ft.

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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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