South Hampshire is still one of the best places to do business, according to a new survey.
Research by BNP Paribas Real Estate shows total office occupancy along the M27 corridor remained stable in the second half of 2013, supporting the view that business is bouncing back in the city.
The report focuses on rents, rates and service charges for ‘Grade A’ offices – those with premier locations or state-of-the-art facilities.
It found business rates in Southampton remain stable at £31.75 per sq ft, more valuable than offices in neighbouring Portsmouth and Bournemouth, where rates are £27.50 for both.
But experts warn the amount of space on offer is declining since the introduction of Government legislation making it easier to convert office buildings into homes.
Steve Williams, of BNP Paribas’ Southampton office, said: “Incentives for office lettings remain high, however with tenant demand improving and large amounts of the city centre stock being acquired for redevelopment, we expect to see incentives begin to reduce in 2014.
“Since the Government released the new legislation changes allowing conversion of office buildings to residential use through permitted development, we have seen a large amount of the vacant secondary office stock in the city centre, around 225,000 sq ft, permanently leave the market.”
The news comes as city businesses are feeling positive about the future, as heard at last week’s South Coast Business Works, organised by the Daily Echo.
It was attended by some of the region’s biggest businesses, including bank Santander, the Ageas Bowl and the Mayflower, and sponsored by solicitors Trethowans.