The M25 south-east office market is fast turning into a landlord’s market, as demand for office space quickly outstrips the number of properties available, a new study claims.
Research from property firm Savills reveals that the lack of office space is reducing tenant incentives and pushing up rents. Take up in the region has gone up to 3.4 million sq ft over the first three quarters of 2007.
This is the highest level since 2001.
"Owing in chief to a lack of supply of quality Grade A office accommodation, the M25 West area is fuelling a return to a landlords market. In order to secure quality product in good towns, tenants are limited in their ability to negotiate on price or incentives and landlords remain in a strong position," Jonathan Gardiner, director of Savill’s regional office agency team, commented.
Rents have increased past the £30 per sq ft in places such as Chiswick, Uxbridge and Maidenhead.
Total supply will go down by 17 million sq ft in the area by the end of this year – a drop of 22 per cent compared to 2006’s levels.