Well, 2020 was sent to challenge us all, not least the UK-wide transactional office markets. Huge uncertainties were combined with what was arguably governing ‘on the hoof’, resulting in commercial property decisions either being revised, postponed or totally eradicated. Talk of changing work practices added to the ‘mix’, the most significant of these being the introduction of WFH (work from home) measures, which certainly served to reduce the overall requirement for space in our office sector.
Other initiatives have yet to settle into recognisable patterns – some organisations will now favour Serviced or Plug and Play ‘flexi’ lease solutions, whether fitted or unfitted, others are showing signs of wanting to continue social distancing measures into the future, and in the process, avoiding shared common circulation areas and joint corporate facilities. The overall market sector will continue to evolve and in all likelihood the extent of new requirements will remain at relatively low levels until the vaccination process has progressed significantly and those ‘in the know’ are confident that the pandemic is behind us.
By our own calculations, figures for 2020 show take up in the office market as comprising 82,650 sq ft. This total included 3 fairly significant lettings – one to Motorola in Midpoint, one to Penningtons Manches Cooper in Matrix House and finally, STERIS taking newly refurbished space within 2200 Renaissance. The total take up resembled similar statistics recorded in 2009, 2010, 2013 and 2015, albeit for different reasons. Prior to last year, the 2019 total take up was recorded as 305,000 sq ft, so we have experienced a 70% reduction.
Unfortunately, these type of figures have put paid to any form of new speculative office development for the time being, but some positives still remain. In particular, the level of overall supply has only increased by 20% from 678,700 sq ft in 2019, up to 811,910 sq ft at the end of the 2020.
We should also analyse this total supply further, insofar as it includes three Pre-let opportunities on Basing View (so not yet built) together with poorer quality space which ideally requires speculative refurbishment but for whatever reason, seems unlikely to be improved. That leaves total stock in the ‘lettable’ Grade A and B sectors, of just over 400,000 sq ft at the start of 2021, so the local market is in no way over supplied. Indeed, were a company to require anything more than 12,000 sq ft of top quality offices, in central Basingstoke (as opposed to out of town), there remains no choice whatsoever.
Basingstoke continues to have one of the lowest supplies of Grade A stock in the whole of the South East. This will be reassuring for institutional landlords faced with remarketing or planning speculative refurbishments over the course of this year. We are predicting a much closer balance between demand and supply as 2021 progresses.
– ENDS –
Contact for further information:
Baker Davidson Thomas
Telephone: 01256 840 777