Business Parks Review: Spring 2013

• Business park office take-up during the second half of 2012 recorded a total of 1.91 million sq ft, in line with the five-year sixmonthly average but down on the previous six month’s figure of 2.5m sq ft. Activity was strongest and above average in the South East, Midlands and the North West.

• Overall availability has risen significantly over recent years but is now starting to plateau. It amounted to 18.5 million sq ft at the end of 2012, a 0.7% increase on the first six months of the year.

• The vacancy rate has increased marginally to 19.3% but there are considerable regional variations. Vacancy rates are falling in prime locations, such as the M42 and South Manchester, but are increasing in other regions.

• With the high vacancy rate, there are only a handful of units under construction across the UK’s business parks, amounting to 470,000 sq ft, 90% of which is pre-let.

• Freehold sales to existing occupiers have increased as landlords look to reduce the risk of void costs and unviable refurbishment costs. Landlords are also reducing risk by offering more flexibility on shorter lease terms in order to retain tenants.

• We predict that the move towards freehold sales to owner occupiers will continue but that price levels will likely now stabilise.

• A further shift towards alternative uses will also continue, particularly for land, but building demolition is on the cards in some areas and will continue to be so particularly where higher value alternative uses can be brought forward.