Office take-up on business parks in the North West has fallen by 89% on the previous six month total, according to latest research by GVA.
On page nine of its latest business parks review, GVA said 15,700 sq ft of business park take-up was recorded in the six months to June this year, which is less than a tenth of the current five year average.
GVA said it is the lowest level of office space take-up in the 16 years it has carried out the survey. The vacancy rate of the North West's business parks is the lowest in the UK at 11.3%, contrasting significantly to 21.7% reached in 2007.
With the occupational market still weak, GVA said rental values are stagnant and any immediate turnaround in occupier demand could see rental growth quickly return.
Prime headline rents edged up 0.8% across the region which was boosted largely by rental growth in Warrington and Birchwood, which saw prime rents rise 2.9% to £18/sq ft from £17.50/sq ft in June last year.
In comparison with most other UK regions, GVA said rents have remained stable in the North West since 2006 although underlying tenant incentives are relatively strong.
GVA's report also revealed in the North West:
- Prime rents for space in south Manchester were £18.00/sq ft and £19.00/sq ft in Chester
- Construction activity is dependent on securing pre-lets, mainly to public sector occupiers
- The region has one of the lowest levels of availability in the UK with 698,000 sq ft of floorspace found to be immediately available
- The completion of the new 240,000 sq ft Greater Manchester Police Force HQ at Central Park in north east Manchester in the first half of 2011, leaves one remaining business park development in the North West
- No speculative starts or other pre-lets were recorded by the survey, raising the potential for a further decline in availability in the medium term
Nationally, a total of 1.6m sq ft of take-up was recorded in the first six months of 2011, an increase of 8.0% on the previous six months but 23.8% below the current five year average.
Ian Steele, director at GVA, said: "Despite the continued economic uncertainty there have been pockets of transactional activity on some of the North West's business parks. This letting activity has predominately been centred around those business parks close to Manchester Airport such as Concord Business Park (Shell UK & Thyssen Krupp) and Atlas Business Park (Civil Aviation Authority), which has seen supply significantly reduced as a consequence.
"Demand for South Manchester business park space still remains healthy, especially around the airport but there are still no signs of any speculative development and there are very few speculative refurbishment schemes being committed to, which will result in occupiers having limited choices should they be considering relocation in the next couple of years."
- To download the full report, visit the GVA website here