As the effects of Covid-19 rampage through the office market, evidence emerges that major occupiers in the Thames Valley are starting to re-evaluate their space needs.
Although head leases may appear to be secure, sometimes the space may be not fully occupied by the tenant and, as a result, some of it is then re-marketed by property consultants to prospective sub-tenants and probably at a discount.
This influx of ‘grey space’, distorts office supply figures and, in due course, will dampen headline rents as deals are done off-market.
EY’s decision to stay at Apex Plaza may or may not be Covid-related but the pandemic would have been difficult to ignore.
We reported on August 4 that Ericsson has not responded to our request for confirmation that the mobile phone giant plans to release one floor of its new head offices at Thames Tower in Reading.
The firm had, in March 2018, signed a 10-year lease on 37,600 sq ft over three floors at the building where it combined operations previously at Newbury and Guildford.
As vacancy rates move above seven per cent in the central London office market, we could we start to see more companies like Ericsson off-loading space into the Thames Valley grey office market.
Without knowing how big the dark clouds currently enveloping the London market could grow, the question arises as to whether Reading will get lost in its shadow or benefit as companies start to look at less dense areas along the M4 corridor.
One only has to look at the healthy state of the business parks in and around Oxford to realise that some clouds do have a silver lining.
We live in interesting times.
© Thames Tap No 222 (powered by ukpropertyforums.com).
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