The Future of the M27 Corridor

The Future of the M27 Corridor
 
Outlook and recommendations

9 February 2017, by Savills Research

The potential for growth in Portsmouth, Southampton and the wider M27 corridor

 

■ More homes and workplaces are needed to support the growing economy of the area. Housing schemes are currently dominating development in the wider area with residential sales values higher than commercial. However, there is potential to bring forward more office space and a wider range of uses through mixed use development.

■ We forecast that house prices in the South East will rise by 17% over the next five years, outpacing London and the UK average.

■ Office rents are expected to continue to grow in Southampton city centre where they have, at best, been flat over the last few years, while out of town rents have seen increases in the last 24 months or so.

■ In and directly to the north of the M27 corridor there is potential to provide much needed housing and bridge the value gap between the lower value urban areas and higher value rural ones. Large sites including the Garden Village at Welborne could be instrumental in this.

■ There also remain plans for a major expansion of Southampton Docks by using reclaimed land on the New Forest side of Southampton Water. By 2030, the commercial port is expected to increase exports from 2.7m containers per year to 4.2m.

■ With tight planning restrictions, particularly on B8 Warehouse/Distribution and a focus on residential developments, more industrial space must be delivered to avoid hampering demand in the M27 corridor market. This has consequently pushed rents up to £8.50 per sq ft for prime industrial space.

■ The weaker sterling is set to generate interest from overseas investors. But uncertainty surrounding Brexit negotiations remains a risk to investment.

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Key Contacts

Clare Bailey

Clare Bailey

Associate Director
Commercial Research

Savills Margaret Street

+44 (0) 20 7409 8863

 

Lucy Greenwood

Lucy Greenwood

Associate
Residential Research and Consultancy

Savills Margaret Street

+44 (0) 20 7016 3882

 

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