CBRE Southampton shared these insights during its South Coast real estate market outlook briefing, which attracted 60 attendees at Ocean Village’s Harbour Hotel.
Jennet Siebrits, CBRE’s UK Head of Research, said investors are optimistic about dipping interest rates and an active property market.
The agency targets over £47bn in UK national investment activity for 2024, exceeding 2023’s figure of just over £43bn. Siebrits underlined investors’ commitment to strategised approaches.
Simon Philips, CBRE Director of Planning & Development covering Southampton and the Midlands, observed relaxation in planning laws now allow unlimited conversion of office space under permitted development. The previous limit had been restricted to 1,500sqm.
Future office property trends, therefore, appear driven by considerations of refurbishment, pre-let developments, and flexible conversion of existing office spaces. The anticipated lower interest rates and an expected increase in the property market should offer further incentives for estate investments in Southampton.
Head of CBRE in Southampton, James Brounger, said: “The current economic climate is not allowing speculative development in the area; but occupiers and their employees are focusing on quality buildings, which have strong sustainability credentials. Employees want to work in high quality spaces, and employers will need to upgrade accordingly, prioritising wellbeing and sustainability in the workplace.
“However, just 15% of Southampton’s offices have either an A or B EPC rating and there is a very limited supply of available high-quality offices in the area, so improvement via refurbishment to meet ESG credentials and specification of existing offices is likely to be a focus for many organisations.
“Similarly change of use of the poorest buildings as well as occupiers and developers working together to deliver new buildings on a pre-let basis will also be the key to managing the office stock.”