There’s been a strong start to the year in the office market in Milton Keynes as it continues to attract new businesses to the region, according to a new report by national commercial property consultancy Lambert Smith Hampton (LSH).
Elsewhere along the M1 Corridor demand from potential occupiers continues to outstrip supply, according to the LSH Office Market Pulse report for Q1 of 2019
Tom Harker, associate director in office agency at LSH in Milton Keynes, said: “The office market in Milton Keynes continues to be buoyant in comparison to a number of south east markets, with around 70,000 sq ft of take up in the first quarter and an increase of active occupier requirements.”
Delivery of better quality supply has sparked a flight to quality from tenants seeking contemporary workspace with amenities, in a market historically oversupplied with lesser quality stock. Supply continues to reduce and this is becoming increasingly pronounced for Grade A offices, in particular at out of town locations.
Tom added: “The out of town office market has performed very well in the past 12 months, with the first quarter continuing in this vein across the size ranges. With only approximately 20,000 sq ft Grade A accommodation available out of town, we anticipate rental growth to continue, whilst in Central Milton Keynes – where a number of options are available – we may start to see a reverse trend with inward movement from occupiers.”
Meanwhile, it’s been a quiet start to the office market in Luton. Tom said: “Although there have been no significant transactions completed in the first quarter of the year, there has been a positive increase in occupier activity with a number of active requirements and deals under offer anticipated to complete in the next quarter.
“More supply is due to come to the market on Capability Green and competition on the business park has meant stable rental levels with increased incentives to secure tenants. This favourable dynamic for occupiers means it offers arguably some of the best quality stock with excellent connectivity within the North M25 and M1 market.”
And in Northampton, the market continues to show both an appetite for prime office space and a frustration from lack of supply, according to Tim Bell of LSH in Northampton.
“Whilst transactions for serviced offices and Grade B office space of circa 500 sq ft continue to attract occupiers, the prime market has seen few notable large deals with the exception of Francis Crick House in Moulton Park,” said Tim.
“This is largely due to the continuing lack of supply of Grade A office space. Phase 3 of The Waterside scheme has broken ground and is partially pre-let. Whilst one swallow does not make a summer, the continuing interest it is attracting does indicate that occupier appetite is still there for such developments.”