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UK : Sharp increase in headline rents - Q2 2014

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UK : Sharp increase in headline rents - Q2 2014

Anticipation of a short term supply squeeze and an increase in pre-letting pushed up UK regional office prime headline rents 3% on average in the six months to Q2 2014.

Prime headline rents are forecast to rise 11% from end-2013 to 2018. Landlords are expected to take a harder stance with incentives and net effective rents are forecast to rise in excess of this.

Above-average quarterly take-up was maintained into the first half of 2014, with a greater number of mid-sized transactions. Lack of suitable grade A options means grade B take-up is still dominating. Lease expiries for many key occupiers over 2014-17 are driving pre-letting activity. Annual take-up returned to pre-crisis levels in 2013, which is forecast to continue in 2014 and 2015.

Source : DTZ (Groupe UGL)

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