The M25 and M4 corridor markets made a positive start to 2013, both recording take-up above their 5-year and 10-year quarterly averages in Q1. In contrast, the M3 market was relatively subdued, with Q1 take-up 20% below its 10-year quarterly average.
Active named demand increased for a second successive quarter to stand at 6.53m sq ft, 11% above Q1 2012. Financial & Business Services continues to retain the largest share of activity, accounting for 25% of the total, followed by TMT, with 16%.
The M25 vacancy rate fell to 7.7% in Q1, its lowest level since Q1 2009. Q1’s sole new speculative development start was Building 7, Chiswick Park, which by itself lifted speculative development activity in the M25 by 30% to 81,000 sq ft.
Investment turnover was £298m in Q1, 72% above Q4 2012’s total and closely in line with the 5-year quarterly average. Demand for good quality secondary product has increased markedly, with limited supply putting downward pressure on yields.
Source : Knight Frank