Following a strong first quarter, take up in the Thames Valley fell below the long term half year average due to a slower second quarter with no transactions in excess of 50,000 sq ft being concluded.
However, the second half of 2018 is expected to outperform the first with a number of larger active HQ requirements including Virgin Media, Sanofi, Xerox, KPMG and Mondelez. Looking ahead, there are only three new schemes now under construction speculatively across the Thames Valley and availability is set to fall to its lowest level for 20 years by 2021 if take up continues at the long run average. In the meantime, annual demand and supply will reach a point of equilibrium for the first time since 2001.
Despite take-up falling in the Thames Valley, the South East recorded a strong second quarter totaling 1.12m sq ft of transactions, 28% ahead of the first quarter and in line with the long term quarterly average.
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- There were 18 transactions in the Thames Valley in Q2 with an average deal size of 15,500 sq ft which is 40% above the previous quarter of 11,000 sq ft
- West London prime headline rents have been consistently increasing over the last 10 years at an average of 4.5% per annum
- The TMT sector has been the most active over the last 15 months accounting for an average of 36% across both markets