South East Office news 1st December 2011

Office investment transactions in the South East are set to top £2.1bn by the end of 2011 – double the value of transactions in 2009 and 2010. According to CBRE November saw 11 office sales completed in the region, partly due to vendors seeking to finalise deals before the end of the year.

CBRE said speculation over an anticipated softening in secondary pricing next year has also added pressure to the market as investors continue to show greater interest in prime stock, particularly in town centre locations, or good secondary stock which boasts asset management potential. CBRE’s sale of Green Park, on behalf of PRUPIM, represents the highest value single transaction at £408m, making it CBRE says the UK’s largest regional office sale.

Other transactions of note included the sale of Watson House in Reigate, also by PRUPIM, and Frimley Business Park by LaSalle Investment Management. Despite a large number of deals, availability has risen in the last month, and there are currently 35 investment opportunities in the region’s office market. These account for a total value of £667m, against October’s £415m. Mark Routledge, executive director, Business Space Capital Markets, CBRE said: “As we move towards the end of the year, November has seen another hugely successful month for the South East office investment market. “At present, the majority of offices coming to market are secondary stock, and there is slight disparity between asking prices and final sale figures. However, at the prime end of the market we continue to see excellent prices paid as investors maintain their flight to quality and we expect this to remain the case in 2012.”