Thames Valley office market records strong start to 2011

King Sturge reports 37% increase in office space take-up over the same period last year

Article posted: 13 Apr 2011

The Thames Valley office market recorded a strong start to 2011, laying the foundations for a better than expected year with supply continuing to fall and take-up holding up in line with the five-year average, according to a report by King Sturge.

Q1 take-up of office space in the Thames Valley reached 409,000 sq ft, up 28% on the previous quarter and 37% higher than this time last year. The five-year quarterly average is 407,000 sq ft. Key deals this quarter included Adobe acquiring 49,800 sq ft of new office space in Maidenhead at Market House, PRA taking 42,000 sq ft offices in Reading at 500 South Oak Way, Green Park and BP taking 42,000 sq ft of office space in Stockley Park at 5 The Square. The BP deal demonstrates the direct impact of recent world events on the Thames Valley. Following the earthquakes in Japan, BP has reoccupied space it had recently vacated to refocus activities.

Total availability fell to 6.9m sq ft at end-Q1, some 10% lower than 12 months previously. Availability peaked in Q2-2010. The vacancy rate currently stands at 11.3%. Grade A supply continues to be eroded and will kick start the new development cycle in some core Thames Valley hot spots this year. The only speculative scheme currently under construction is BAM's office building in Chiswick Green (81,500 sq ft) which started on site in Q4 2010. During Q2 2011, Rockpsring and Bellhammer are due to start on site with Toyon (80,130 sq ft) in Uxbridge (pictured). Other development hotspots during 2011 include Wimbledon, Hammersmith, Staines, Richmond and Maidenhead town centre.

Going forward, at end-Q1 2011 there was 140,000 sq ft under offer within the King Sturge-defined Thames Valley market area. However, a number of key requirements continue to be active and provide a strong basis for demand over the next 12-18 months.

The full Thames Valley Q1 2011 research report will be available shortly from King Sturge.

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Posted by Sara