News on 03 January 2001
According to the latest CB Hillier Parker Central London
Office Market report, 2000 was a good year for the Central London office
market and the outlook for this year is positive although supply is restricted.
The annual take-up soared last year with almost a third more space transacted
than at the peak of the last property cycle in 1988. With a 2.2% availability
rate however – the lowest level for 12 years - there is only 427,000
sq m (4.6m sq ft) of space available across Central London, of which 15%
is in new buildings.
Catherine Rees, senior analyst at CB Hillier Parker, said: “Restricted
availability and strong demand has forced prime rents up by 40% over the
year. With known requirements for office space at an all time high, outweighing
current availability by five times at the end of 2000, the development
pipeline is the only method to release occupier pressure.”
Over the last quarter of 2000 the activity stabilised, with occupiers
considering relocations and expansions more realistically.
Nick Ridley, head of West End Leasing and Development at CB Hillier Parker,
said: “Within Central London the dot.com phenomenon has effectively
evaporated since September, resulting in a quality upgrade of companies
with stronger covenants requiring space. Since then there has been the
emergence of requirements from innovative new technology and media industries
which are more securely financed and have a more stable business platform.”
CB Hillier Parker says the outlook for the market in 2001 remains positive,
with restricted supply, limited development pipeline and strong demand
expected to continue. The company also believes rental growth will calm
down.
At the same time a third of small businesses are facing accommodation
problems, according to the Spacia Small Business Property Monitor 2001,
the first in an annual survey of small business property needs, based
on research conducted for Spacia by marketing information group Taylor
Nelson Sofres (TNS).
In an index of 'Property Search Confidence', 32% of 1,092 small businesses
interviewed by TNS had experienced difficulties when finding accommodation.
Location and budget were the most commonly cited problem areas.
56% of those questioned said internet databases of available property
to let would be helpful, 54% wanted more flexible lease terms from landlords
and 51% said more information should be available at Business Links and
other small business centres.
Commenting on the findings, Stephen Barrie, director of Spacia, said:
"All of us in the property sector have a responsibility to look at
the fact that a third of small businesses are having or have had difficulties
in finding accommodation, and we need to act on their suggestions to improve
the process.”
He added: "Finding property shouldn't be a tortuous process for any
company - it helps their business to grow if they can get it right the
first time. Landlords should not just be property providers, but a partner
in helping small businesses - which are the lifeblood of our economy -
to grow."
