NEW figures from property management company CBRE show that the Southampton office market is performing well, with high demand from professional services companies.

However there continues to be a shortage of ready-to-occupy space.

CBRE’s bi-annual office research shows that total take-up in the city and surrounding area for the first half 2017 was 53,086 sq ft.

Research reveals that deal flow has been relatively steady, with several individual lettings of over 10,000 sq ft, the largest of which was at the newly rebranded Hampshire House, Chandler’s Ford.

In two separate transactions, telecomms company Daisy Group and utilities supplier Utilita each took 10,500 sq ft at £19.75psf.

Prime rents have now pushed higher to in excess of £20 per square foot with secondary rents rising and a marked reduction in availability in this sector of the market.

CBRE regional managing director James Brounger said: “Despite political and economic uncertainty this year, the Southampton office market performed well. We now expect prime rents to consolidate at in the early £20s per square foot for refurbished space.

“Demand from professional services companies was particularly strong in the early part of the year and with some larger deals currently being negotiated, we expect to see a strong second half to 2017.”

Meanwhile in the city centre, activity has been centred on Mountbatten House and the White Building, where space has been acquired exclusively by professional and business service firms, including Manpower and Foot Anstey.

This year has been characterised by occupiers taking much longer to reach decisions and the continuing trend to more flexible fit-outs is reducing the overall floor plate requirement.

Ready-to-occupy space continues to dwindle in the city centre, although there are some Grade A buildings scheduled to come back to the market in the coming months.

In many instances these have been triggered by consolidation of existing occupation by companies such as Grant Thornton on Dorset Street, Old Mutual at Skandia Point and Ordnance Survey at Adanac Park.

The pace of the fall has slowed, with supply down by just one per cent since the end of 2016 resulting in a flip in the supply base.

At the end of 2016, nearly 70 per cent of available space was secondhand; by mid-year 2017 that share has fallen to 40 per cent, with Grade A space now accounting for 60 per cent of the market.

Nevertheless, there remains a lack of supply in some key locations where demand has proven to be stronger in the recent past. This includes Eastleigh and Chandler’s Ford.