Office letting across the UK will fall by a third over the next two years as the impact of the credit crisis and economic uncertainty take their toll.
Take-up is expected to drop from 13m sq ft to 9m-10m sq ft, according to a study of 28 regional centres by Lambert Smith Hampton. Its National office report 2008 reveals that 13% of regional office space will be empty by 2010- up from 9.4% now across the country.
Manchester, Leeds, Glasgow, Birmingham and Bristoll- which will account for more than half (4m sq ft) of all new space scheduled to come on stream during the period - are expected to be among the hardest hit.
However, LSH said that developers’ prudent response to the credit crunch meant that the UK was unlikely to experience the high levels of vacant space seen in the last recession.
“With many consented schemes now on hold as a result of the credit squeeze and economic uncertainty, the risk of a 1990s-style oversupply in the medium term has been somewhat mitigated,” says the report.
“We can expect the market to begin to absorb the supply as demand strengthens from 2010 onwards.”
Estates Gazette, 21-06-2008
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