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The A3 and M3 office property market showed resilience in 2023.

The office property market in the A3 and M3 Corridor demonstrated significant resilience and evolving trends throughout 2023, according to data released by Curchod & Co.

The firm’s review of 2023 suggests that the Surrey and Hampshire office property market, while varied across different towns, has overall shown a strong capacity for recovery and growth. The activity observed in Woking, Guildford and Weybridge, Blackwater Valley, and Basingstoke indicate a market in transition, adapting to new demands and preparing for future opportunities.

“Despite the prevailing economic headwinds, overall, the A3 and M3 corridor office market remained strong in 2023,” said Piers Leigh of Curchod & Co

“Prime office rent figures across the key towns clearly demonstrate the robustness of the market in this region and represent the confidence of businesses in this key area of the South East. Despite facing unprecedented challenges, the market has not only sustained itself but has shown promising growth.

“The overall picture is one of an evolving market that continues to adapt and thrive amidst changing circumstances, and we remain optimistic about the future and look forward to seeing how the market develops in 2024,” he added.

Woking, Guildford and Weybridge

In Woking, Guildford and Weybridge, the market has rebounded impressively, with take-up in 2023 soaring 33% above the five-year average. Grade A take-up, representing 84% of the total, indicates a robust demand for premium office spaces. However, these towns face the challenge of limited Grade A space availability going into 2024, which could influence future market dynamics.

Woking-based Piers Leigh said: “2023 was a year of remarkable resilience for the Woking and Guildford office markets. The high demand for quality space, despite the after-effects of the pandemic, is a testament to the enduring appeal of these locations.

“Looking ahead, the next 12 months will be crucial. We anticipate a continued preference for high-quality spaces, but the limited availability of Grade A offices is something we are closely monitoring. It’s a balancing act between supply and demand, and it will be interesting to see how the market adapts,” he added.

Blackwater Valley

Contrastingly, the Blackwater Valley towns, including Camberley, Farnborough, and Farnham, experienced a 24% decline in take-up compared to the five-year average. Despite this, the demand for Grade A spaces remained strong, comprising 84% of the total take-up. The market here is marked by a pronounced preference for high-quality office spaces, as evidenced by the 36% premium achieved by Cat A+ spaces over traditional Grade A spaces.

David Bowen of Curchod & Co in Camberley said: “The Blackwater Valley towns have faced a somewhat mixed market scenario in 2023. While there was a decline in overall take-up, the consistent demand for high-quality spaces is a positive indicator. Going forward, we anticipate that the appeal of the A+ category space will continue to shape the market, reflecting a broader trend of businesses prioritising quality and modern amenities.

“A number of office properties have been earmarked for redevelopment to Industrial, which we anticipate will only continue to put further upward pressure on prime rents,” he added.

Basingstoke

Basingstoke’s office market faced a downturn in 2023, with take-up significantly below the five-year average. However, new developments are set to revitalise the sector in 2024, with a new supply of Grade A office space. Anticipated prime rents are expected to break the £30.00 per sq ft level, ushering in a period of rental growth.

Keith Enters of Curchod & Co in Basingstoke said: “The local market faced challenges in 2023, primarily due to limited Grade A space. However, the upcoming new developments in 2024 present a promising turn, and we anticipate a revival in the market with these new spaces, especially with rising demand for high-quality offices.”

Download a copy of the report.

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