According to new data from CB Hillier Parker, take-up in the second quarter of 2001 reached 496,000 sf, the lowest level recorded since 1996 and almost 60% down from the previous quarter. And take-up during the first half of the year amounted to 1.6 million sf, down from almost 3.5 million sf during the preceding six months.
CB Hillier Parker's report says that the decline has been most dramatic in the pre-letting market, as companies have become reluctant to make forward commitments. During 2000, pre-lettings accounted for half of all take-up. So far in 2001, this proportion has fallen to about a quarter.
Availability at the end of June 2001 stood at 3.6 million sf, up 14% from the beginning of the year, but this is expected to rise further. A number of companies including NTL, Cisco Systems, Aspect telecommunications and XO Communications have all started remarketing previously let space. Space available for subletting now accounts for 18% of supply.
At a time when the market is going into reverse, development completions are increasing. Newly completed but unlet space now accounts for 25% of supply, up from 18% at the beginning of the year. And during the second half of the year more space will be completed. CB Hillier Parker's worst-case scenario is that by year end availability will stand at 5.7 million sf.
However, the situation is unlikely to worsen beyond that, because the number of speculative development starts has already tailed off. 'In the medium term, therefore, we do not foresee a situation of oversupply in the Western Corridor,' forecast the CBHP brokers.
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