At the same time available office space on rose by 1 million sf to 12 million sf. But the rate of increase in supply is now slowing, with less previously occupied space coming onto the market. And developments in progress and completed new space still account for almost half of total availability.
Peter Damesick, Head of Research at Insignia Richard Ellis, said: "In absolute terms office availability in the Thames Valley is now back to levels last seen in 1991/92. Further contraction and consolidation in the telecoms sector is likely to produce further releases of space onto the market later this year from the likes of Nortel and Worldcom. The Thames Valley market is therefore facing a two year workout to achieve improved balance between supply and demand."
And to underline the problems facing the market, just 68,629 sf of offices were let in the major office centre of Slough, Berkshire, during the second quarter of 2002, according to Lambert Smith Hampton's latest Slough Office Market Quarterly Report, with only five transactions during the quarter.
Overall, 163,305 sf has been let so far this year in 15 transactions. With this in mind, LSH is now forecasting that lettings for the year ar enot expected to exceed 250,000 sf.
Forecast supply has risen by over 100,000 sf to 998,284 sf and the rate of increase is expected to accelerate over the next six months. Headline rents have fallen by £3.25 sq ft ($51)--or 8.6%--since January 2002.
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