South East Offices Snapshot Q4 2017.
A total of 852,204 sq ft transacted across the South East, which is 82% higher q-o-q. However, 2017 annual leasing activity is 13% lower than in 2016.
There was a marked increase in take-up from serviced offices in 2017 with around 297,000 sq ft let to flexible office occupiers. WeWork was the most active taking 98,000 sq ft and Spaces took c. 64,000 sq ft.
Headline rents remained strong in 2017 with some towns like Slough (£34.00 psf) and Maidenhead (£32.00 psf) witnessing sustained growth.
Lack of Grade A supply should continue to bolster rental growth across the South East in 2018.
Total investment volumes for 2017 reached £3.85bn, which was a 35% increase on 2016 volumes, but below the £4.475bn transacted in 2015.
Councils were the most active buyers, accounting for 25% of the total number of transactions in the quarter.
Overseas investors are expected to continue their search in the South East office sector for value and strong returns offered outside of London.
UK institutional funds have been net sellers since Q2 2016; however, we anticipate this to change in 2018.