Strong demand points towards a positive outlook for the M25 office market, says Savills

12 July 2017

According to Savills, overall demand in the M25 office market has risen by 7.5% in Q2 2017 to 2.96 million sq ft (274,992 sq m) as occupiers start to shrug off fears over ongoing political uncertainty.

Savills notes that whilst occupier demand in the southern and northern M25 markets remain muted, demand in the western corridor is up by as much as 73% with requirements totalling 1.48 million sq ft (137,496 sq m).

Despite this, take-up remains down at the half way point at 1.381 million sq ft (128,304 sq m), a 19% decrease on the five year average. These figures can be attributed to the slow-down in activity in the run up and immediately after the EU Referendum, as companies put real estate decisions on hold in light of Brexit. However, Savills believes that the growth in demand illustrates that it is likely to be business as usual for many firms in the second half of 2017.

Furthermore, whilst 2016 was characterised by sub 20,000 sq ft (1,858 sq m) lettings, the average size of requirements currently stand at 18,715 sq ft (1,738 sq m), 30% up on last year’s figure of 13,666 sq ft (1,269 sq m). Notable requirements across the region include Procter & Gamble, KPMG and Merck Serono as well as the hunt for a 120,000 sq ft (11,148 sq m) corporate headquarter building dubbed Project Galaxy, believed to be on behalf of Samsung, which offers a significant lift in a market recently starved of large-scale searches.

Jon Gardiner, national head of offices at Savills, comments: “Despite take-up being down, the outlook for the M25 office market remains a lot more positive as we head into the second half of the year. Looking at current demand, we believe that we will start to see an uptick in activity, especially with the increase in larger requirements that are starting to come through.”

 
 

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Key Contacts

Jonathan Gardiner

Jonathan Gardiner

Head of
National Office Agency

Savills Margaret Street

+44 (0) 20 7409 8828