Every October we conduct a survey of available industrial and office floorspace in South East Hampshire. Our latest survey is summarised below.
Office Market Remains Steady
Available office space in South East Hampshire has remained steady for the fourth consecutive year.
Portsmouth has coped well with the IBM relocation away from North Harbour. The buildings are being subdivided to occupier needs.
The flexibility of office space for subdivision has been the key to supply and will continue to be so moving forward. Although our survey shows over half of available space to be in units of over 20,000 sq.ft it is certain that some of these areas will be broken down to smaller areas.
Permitted development projects involving conversion of offices to residential space has absorbed a significant amount of old space from the market in recent years. Much of the converted space is in town and city centres. Towns such as Fareham are now short of space for occupier requirements.
Generally no significant changes are anticipated in the market in the immediate future.
Industrial Floorspace Increases
The total available industrial floorspace in the PO postcodes of South East Hampshire has increased in the twelve months to October 2018 from 600,000 to 920,000 sq.ft. Over 50%. This is the first annual increase since 2012.
Pleasing to see is a supply of new buildings into the market. Property development always takes time to respond to market conditions. Contributing factors to the surge in new buildings are:
a) An accepted serious shortage of available space.
b) New building rentals now sustainably being within the £9.00 to £10.00 psf range.
c) Empty Rates exemptions are available on new buildings.
Large unit availability heavily affects the figures. Over half of the total available space in the survey comprises buildings bigger than 20,000 sq.ft. The two largest buildings total 150,000 sq.ft making up 16% of the total.
The combination of newly built space and the two large buildings entering the market in Fareham entirely account for the 300,000 sq.ft increase in floorspace over the last twelve months. Taking these comments into account it can be deduced that the general churn of buildings entering and leaving the market is neutral.
Overall market conditions are now well balanced between supply and demand.