Commercial property advisor GVA has released a report that states renter activity in business parks has only improved incrementally and that overall they continue to fare badly.
The first six months of this year saw a total take-up of 1.6 million square feet of office space in business parks across the UK, according to GVA. This represents an increase of 8 per cent on the previous six months but is still 23.8 per cent below the five-year average.
However, the research also showed that some regions are seeing more activity in their business parks. Particularly the South West has managed to maintain a fairly steady position.
Ben O’Connor, the regional head of GVA in Bristol said: “Whilst we have seen no change in our rental growth, other regions have witnessed steep declines, such as in Yorkshire and Humberside where rental values have fallen by almost seven per cent.
“Companies with good exposure to international markets are likely to lead the occupier market recovery, and we are waiting to see what impact the revival of enterprise zones will have on this market.”
Other regions also reported some increased activity in their business parks.
GVA director Ian Steele said: “Despite the continued economic uncertainty, there have been pockets of transactional activity on some of the North West’s business parks.”
And in Cambridge, increasing demand for office space pushed the headline rents up by 8.3 per cent.
Prime headline rents still remain at least four per cent below their peak in 2008 the GVA report also stated.
Furthermore, the amount of office space currently under construction in the UK is the lowest since the GVA survey began 16 years ago.
Editor’s notes: Post-pandemic, the UK has seen increased demand for office space in out-of-town business parks and particularly from companies engaged in hybrid working.
These companies are increasingly seeking flexible office space and workspace solutions from office providers that can provide part-time offices, coworking desks, private serviced offices on short-term flexible contracts, meeting rooms and other forms of collaboration zone.
There is a growing number of flex space providers in the UK that are offering these services out of UK business parks.
In Cambridge, following the surge in demand for space by pharmaceutical companies during the pandemic, levels of office space and laboratory space supply in Q1 2023 were described as critical. The vacancy rate for lab space was just 0.6 per cent and for office space, 8.7 per cent.