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South Coast office supply shortage becomes critical

According to quarterly research released by Lambert Smith Hampton, the South Coast office market is in supply shortage due to increasing demand, meaning that prime rents are on the rise.

Office supply fell 14% in a single quarter along the M27 corridor and it is anticipated that this fall will continue throughout 2015.

Andrew Hodgkinson, director at office agency for Lambert Smith Hampton, explains: “With a continual trend of falling supply, possibly to a level below 1,000,000 sq ft in 2015, we anticipate prime rents may breach £20 sq ft. Investors have been hesitant to purchase in the first quarter, largely due to the imminent election and the uncertainty surrounding it, further increasing the pressure.”

Take-up figures soared in the first quarter of 2015, thanks to some significant office lettings along the South Coast. Over 190,000 sq ft of transactions completed in Q1 2015 - double the 10 year quarterly average and five times greater than the take-up figures for Q1 2014. In large part, this was due to the 70,310 sq ft letting of Forum 1 on Solent Business Park to HSBC.

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