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Downturn knock-on effect provides good opportunities to move

 
Robert Patterson, Partner at Sanderson Weatherall and Head of Office Agency gives his thoughts on current trends within the office sector in North East city centres.
 
In the last 12 to 18 months, regional city centres have  seen a significant increase in the supply of office stock owing to the effects the recession has had on  business.
 
In order to attract tenants, landlords have had to demonstrate substantial flexibility in lease terms and occupancy costs. This has led to an increase in tenant incentives in an attempt to get the market moving again and encourage tenants to take up some of the excess stock.
 
For landlords that can afford to be more flexible, this decision seems to be paying off.
 
As the available credit from banks dried up, so did many potential developments that would have been coming available in 2010.  For schemes that continued, void rates of 100% are also impacting on buildings nearing completion at the moment.
 
 Also, with the outward movement in investment yields and the funding market, this will restrict new speculative building starts without prelets – resulting in a further hold up in the movement and progression of the market.
 
Within our city centres, the lack of new developments may result in a focus on the refurbishment of existing stock providing this can meet the needs of business and the green agenda.
 
In essence, those companies looking for available office space that is right for their needs should act now to take advantage of competitive incentives as this is a good time in the property cycle to relocate.
 
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