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Central London commercial property availability rises for first time in two years
The availability of central London commercial property was still below trend at the end of the third quarter of 2015 despite seeing its first rise in two years, according to new research. Following two years of decline, the figure increased by 6% but was still 29% below the 10 year average of 14.7 million square feet, the data report from global real estate consultancy CBRE shows. It explains that the 6% increase in availability is partly due to a dip in take-up, which fell 11% while remaining above the 10 year average, but more down to the 42% rise in marketed availability as many un-let properties moved within 12 months of completion. Developments headed for completion in 2015 are expected to reach 3.6 million square feet t. and forecasters predict this figure will rise to 6.6 million in 2016, marking a return to pre-crisis levels. ‘Availability in central London crept upwards in the third quarter after a small dip in take-up, given the hefty rise in City developments nearing completion. I find it extremely promising that by next year, completions will be well over six million square feet, the highest levels we’ve seen since 2009,’ said Emma Crawford, head of central London leasing at CBRE. The report also shows that the availability of newly completed and second hand space fell over the third quarter, reflected in a drop in the vacancy rate from 2.8% to 2.7%. Meanwhile, developments under offer remained above the 10 year average, despite falling 4% in the quarter. For the first time in two years, the highest proportion of these properties, some 32%, were in the West End. ‘We’re seeing significant take-up in the West End, with a wave of global capital targeting the area and high profile occupants like Facebook taking up large office spaces. Looking at the central London area as a whole, despite a small dip in developments under offer, we’re sitting way above average for the decade and should take comfort in the overall growth we’ve seen this year,’ Crawford pointed out. Meanwhile, the UK regional office markets have continued to build upon 2014’s growth, with the volume of office space taken in the UK’s big six regional cities in the third quarter totalling 939,000 square feet, just 7% below the level recorded at the same time last year. Over a longer time frame, combined take-up over the first nine months of 2015 totalled 3.5 million square feet which is 5% higher than the same period one year ago. As a result, the grand total for 2015 is likely reach if not surpass last year’s total, and well on target to exceed the five year annual average level of four million square feet. In many of the core regional cities, pre-letting has returned in strength, with professional service firms in particular taking advantage of the new generation of office buildings that are about to emerge in cities such… Continue reading
UK rents rise the most in the West Midlands, latest data shows
Tenants in the West Midlands have seen rents increase the most with the latest data showing 59% have seen a rise in September, the highest of all regions in the UK. This is compared to 22% of letting agents in London noticing rent increases since last month, and a UK average of 32%, according to the monthly private rental sector report from the Association of Residential Letting Agents (ARLA). The survey also found that renters in the East Midlands are likely to be most successful when finding a rental property, with an average of 272 managed properties per member branch, compared to the UK average of 182. However, London has the lowest number of managed rental properties, with only 124 properties managed on average per branch, despite the huge population which ARLA says proves that the issue of supply is plaguing the capital. Demand for rental properties is the most prominent in the North West, with agents registering on average 40 new prospective tenants per branch in September, the most out of all regions. Demand continues to be prevalent in the South with ARLA agents in London, South East and the South West all registering an average of 39 new prospective tenants per branch. Agents in the East Midlands and Scotland are seeing the least number of new tenants coming through their doors. Tenants in the East of England seem the happiest, as they stay in rented homes for the longest duration, with most staying for 20 months at a time. However, those living in the North West only tend to live in each property for an average of 15 months at a time, perhaps explaining why it has the highest prospective tenants per branch. The report also revealed that rental properties in London have an average of six viewings before they’re let, the highest amount of viewings out of all regions in the UK. This could be down to the battle for space in the capital and the fact that as soon as a property goes on the market in London, many people flock to see it straight away to fight the competition of other renters. This is compared to properties in the East of England being let after an average of three viewings. ‘It’s interesting to see how tenants across the country are affected in different ways when it comes to the rental market; each region has its own issues, whether it’s lack of suitable housing, no available housing at all, or over inflated rent prices,’ said David Cox, ARLA managing director . ‘It’s a surprise to see that those renting in the West Midlands are suffering from rent increases the most, when many of us would automatically think tenants in London would be the most prone to rent increases due to the competition in the capital,’ he explained. ‘The rental property market remains a significant… Continue reading
Spain is seeing a spectacular turnaround in its higher end property market
A renewed confidence amongst buyers, low prices and the Spanish banks’ willingness to offer competitive mortgages is attracting increasing numbers of new buyers in the country, according to a new analysis. In Spain’s major cities, international buyers are now beginning to compete against local buyers to secure the best properties in prime locations, according to the report from Lucas Fox covering the first six months of 2015. Indeed, Spain is seeing a ‘spectacular’ turnaround in its property market, according to the firm’s founding partner Alexander Vaughan. The report says that Barcelona is expected to be the most significant year of recovery for the prime residential property market in the past seven years. Prices have stabilised in the past 12 to 18 months, and international interest for turnkey properties is forcing up demand, alongside renewed confidence amongst local buyers. In Maresme, whereas in previous years local buyers accounted for as little as 20% of Lucas Fox’s sales enquiries, this figure is now closer to 50% and there has been a substantial increase in the number of sales transactions to local clients. The report also says that on the Costa Brava, sales in the first half of the year have been dominated by Northern European buyers with British, French, Swiss, Dutch and Scandinavian buyers being the most active. On Ibiza, while national averages of property prices continued to decline slightly throughout 2014 and are levelling off in 2015, average prices in Ibiza have seen increases since the start of 2013. In Marbella, sales have increased across the region, leading to a shortage of good quality properties in prime locations. Turnkey projects are selling so fast that Lucas Fox is seeing regular price increases of new off plan properties coming onto the market while in Valencia, the first quarter of 2015 has seen an increase of 14% for property re-sales. Madrid continues to attract more and more investment from both national and international investors. Lucas Fox data suggests that 60% of clients buy for investment purposes and 20% for the so called golden visa that allows non-European Union citizens to live in the country if they invest in real estate. Continue reading
