PLYMOUTH OFFICE MARKET WELL POSITIONED FOR RECOVERY, SAYS KING STURGE

 

Several factors including an abundance of employment land mean that Plymouth‘s office market has “real potential once the economy recovers,” according to property consultants King Sturge.

 

Although declining demand will mean rents falling by around 10 per cent this year against a background of limited supply and delays to new-build schemes, the firm says the city‘s office market is in a comparatively strong position.

King Sturge‘s latest Office Markets Report says no major new office supply is expected to come on stream in Plymouth in 2010.

According to the research, occupier demand in the city was up last year on 2008, with 155,000 sq ft of space transacted in total, with the largest letting being Plymouth Community Homes taking 11,500 sq ft at Princess Court. 

 

Although availability has risen sharply, prime rents were unchanged at £15.50 per sq ft for new in-town office accommodation and there has been a fall for out-of-town space to a figure of £13 per sq ft, with falls of a further 10 per cent forecast this year. 

The report says that with the completion of the Cargo and Royal William Yard mixed-use schemes, there are very few other sizeable office buildings available in the city centre and that several new-build starts have been delayed, although demolition work has begun on the 31-storey Oceanique tower in Derrys Cross.

It says student housing demand should fuel the development of mixed-use space in Plymouth this year while the BBC looks likely to see work on its new Sutton Harbour headquarters get underway.

Ifan Rhys-Jones, associate in the office agency team at King Sturge in Plymouth, said the recent sale to three businesses of the former social security offices at Durley House on Millbay Road was an indication that a market recovery may be beginning.

 

“At almost 30,000 sq ft, this is the biggest office deal in the city centre since Foot Anstey located to Salt Quay House in 2008,” he said.

 

“Although no significant new supply is expected to emerge in 2010, enquiries are definitely on the increase and the Plymouth office market has real potential once the economy recovers.

 

“It has plenty of employment land, particularly for offices, and over-supply should not be a major problem. There has been no speculative boom in the city since the early 1990s, and what has been built has tended to be to order.”