February 5, 2013
The office and industrial markets in Southampton and Portsmouth performed well in 2012 as the region recovers from recession, property consultancy Hughes Ellard reports.
South coast specialist Hughes Ellard has released its Market in Focus round-up of activity in the M27 corridor in 2012, which shows office take-up exceeded 300,000 sq ft last year. This is better than the ten-year average of 250,000 sq ft. Portsmouth saw a rush of deals in the last three months, while Southampton experienced a marked increase in enquiries.
Owner occupiers and investors also re-entered the market last year, attracted by cheap buildings in prime locations. There is still more than 1m sq ft of office supply in the M27 corridor, including 380,000 sq ft in Southampton city centre.
Nik Cox at Hughes Ellard, says: “The region fared well last year, despite problems for the economy caused by the ongoing financial downturn and concerns about the future of the eurozone. We were active in 26 office deals in the M27 corridor in 2012, and hope to exceed that in 2013 as the region continues its recovery.”
The industrial market performed well too, with total industrial take-up in the M27 corridor in 2012 exceeding 575,000 sq ft. There is still over 4.3m sq ft of industrial space available in the region, but Russell Mogridge says there are few options for occupiers that are looking for modern space measuring more than 20,000 sq ft.
He says: “There is demand out there from occupiers for freehold industrial properties, but little supply of top-quality space. As a result, we expect to see rental growth in 2013 and a continuation in the trend towards design and build pre-lets that we saw in 2012.”
For example, UPS signed a 90,000 sq ft design and built pre-let deal in Millbrook in Southampton last year, subject to planning permission.