The office market in the South East
The office market in the South East is set for a very testing year, but with 2009’s last quarter’s take up figures due out shortly, it is widely expected that they will confirm 2009 as one of the worst office market’s in our lifetime.
2010 should be a better year for M25 office take up, as we it should be a full year of activity when compared to 2008 and 2009, as these were effectively only half years, as the world seemed to stop from mid 2008 to mid 2009.
Interestingly the west end office market has sprung back into life, with a lot of good quality office space at the cheaper end of the market being taken up. I have always seen a link between the West end office market and other occupational markets and believe west end activity bodes well for M25 towns, but it may not be seen until 2011/2012.
One thing that continues to amaze me is the total disconnect between the investment market and occupational markets. The investment market has sprung into life and the level of activity is expected to continue, as sheer weight of money chasing well let stock, showing good value is there in abundance. However it won’t be long before yields get to hot levels again. This is where the disconnect kicks in for me, as it will be a lot longer before market incentives and rental growth kicks in to partially justify these low yields.
