South East Offices Review Q1 2021
Our South East Offices Review Q1 2021 has just been released.
Key findings of the Q1 2021 report indicate that:
- Take-up in the South East showed q-o-q growth reaching 574,140 sq ft, marking Q1 2021 the largest quarterly take-up level since the pandemic began. This reflects a 39% rise on the same period last year (412,090 sq ft) and remains down just 7% on the long term quarterly average for take-up in the first quarter.
- Vacancy rates now average 9.4% across the region but big variances with some towns well below the average for example Watford and Redhill & Reigate, increased from 7.2% pre pandemic but encouragingly still lower than anytime between Q1 2010 and Q4 2017.
- The South East office investment market has started 2021 well, continuing the strong Q4 in 2020. Total investment volumes in Q1 2021 reached £519m, while this is down 51% on Q1 2020 it is 29% up on Q1 2019. The largest transactions to complete in Q1 were Brockton Everlast’s purchase of 214-240 Science Park, Cambridge for £98m and the acquisition of Procter & Gamble’s HQ in Weybridge for £49.55m by a private Middle Eastern Investor at 4.25% NIY and 5.21% NIY respectively.
A View From the Market
Looking ahead, Q2 2021 begins positively as vendors are more realistic on pricing hence transaction volumes are expected to rise based on assets under offer. The office market continues to witness a K shaped recovery whereby the high growth / specialist employment sectors and well let (10 years +) pricing is hardening while core, core plus and value add pricing is drifting by varying degrees.