July 2013 South East snapshot

Market Highlights

• Q2 M25 take-up failed to match the levels seen in the first three months of 2013 with the exception of the South M25 market. While total M25 take-up is circa 29% above the equivalent period in 2012, Thames Valley take-up at 379,000 sq ft was significantly down (-52%) on the ten year quarterly average. 
   
• Shortage of larger deals held down take-up in the core M4 locations. The Thames Valley deals above 10,000 sq ft totalled 178,000 sq ft compared to 433,000 sq ft in Q1 2013 and average  deal size fell sharply from 7,333 sq ft in Q1 to 4,417 sq ft in Q2. 
   
• Regardless of moderating demand, vacancy fell modestly across Northern and Southern M25  and Thames Valley markets. Overall M25 vacancy fell to its lowest level since September 2009 but still remains above the ten year quarterly average.
   
• Average rental uplift remains largely confined to the Thames Valley but we are increasingly seeing evidence of uplift in other locations such as Croydon where availability of Grade A product is helping to push the envelope in terms of prime rents. The focus of growth remains in West London though, with Hammersmith, aided by the ‘Chiswick Park effect’ and rising rents in West End fringe locations, seeing record nominal headline rents and rental uplift.