A SHORTAGE of top class office space in Southampton is putting the city’s financial and professional services economy at risk, property agents have warned.

It comes in a report by commercial property firm Jones Lang LaSalle (JLL) looking at the future of the market and developments.

Head of the firm’s Southampton office Michael Green said while office vacancy rates remain high, there was a “distinct shortage of Grade A supply in Southampton and the pipeline of new schemes has dried up”.

He added: “This will have consequences, not least on the city’s ability to attract or retain footloose inward investors from the financial services and professional sectors.”

Mr Green said that as businesses return to growth and the level of demand for commercial property strengthens there will be a “serious supply shortage in 2013/2014 before new schemes are capable of attracting funding and are then built out”.

However, despite tough conditions, Southampton has continued to perform relatively well in the industrial property market with take-up in 2011 projected to outperform 2010.

Matthew Poplett, a director in industrial and logistics at JLL’s Southampton office, said: “As always there are hot and cold spots of activity, but within areas of strong take-up there is compelling justification for speculative development, although site availability is limited.”

The warning comes after it was revealed that commercial development is falling at its fastest rate since the depths of the recession two years ago.

A national survey by property agents Savills found development activity fell for a sixth successive month in December, driven by lower levels of both public and private sector work.

And around one quarter of developers expected things to get worse in the next three months.

Martin Hastelow, head of commercial agency at Savills Southampton, said: “This research reflects what we are experiencing in Southampton.

“Carnival Cruises, Capita/Southampton City Council, Ordnance Survey and the police all had long-term projects that resulted in facilities being constructed for them in the period for 2007 for 2010.

“The only major commercial development under way in the Southampton area at present is for Lloyds Register at Southampton University, which has been on the cards for some time.”