While politicians bemoan the slowing of the economy, companies have been prudently piling up the cash in their balance sheets. What is preventing them from spending the money on mergers, better properties or machinery, is a lack of confidence throughout the global system. That will change in due course and they will go for growth. That particularly applies to the technology sector, the lifeblood of the Thames Valley. So it is encouraging that a number of major companies are now seeking space, such as Huawei, Nokia, ING, BP and Hasbro.
Their total requirements could be 35,302 sq.m. (380,000 sq.ft.) to which should be added substantial requirements from Centrica and an electronics manufacturer. That should be compared with the latest analysis from Jones Lang LaSalle with a poor second quarter take up of less than half that of January-March, giving a six months’ total of 52,210 sq.m. (562,000 sq.ft.). But there has been a surge in requirements to 297,280 sq.m. (3.2 million sq.ft.), which is 17% up on the same period of 2010; a healthy pointer to the future.
JLL’s James Finnis commented: “Grade A supply is being erodedand the development pipeline, which remains at a record low, is failing to replenish it. We are forecasting a point in 2012 where, assuming current levels of demand, rents will increase markedly for the best areas.” Another indicator of a healthier market is that Finnis reports 1.8 million of office inspections in the second quarter, well up on January-March.
Experience varies from town to town with Simon Fryer of Fryer Commercial reporting that “July and August were quieter than usual. Fortunately, we have been much busier in September.”
He notes the fierce competition between landlords to keep tenants and do new lettings. Fryer points to the start of Bracknell Regeneration which will bring in retail facilities, notably a new Waitrose supermarket. As far as the office market is concerned, a letting of one of the large buildings available (there are four totalling 46,450 sq.m. would be a real boost to confidence.
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