Watford remains a winner as take up continues to soar, says Savills

17 May 2017

According to Savills, take-up in the Watford office market hit 105,000 sq ft (9,754 sq m) at the end of Q1 2017, a 12% increase on the same time period last year, driven by strong occupier demand and renewed developer confidence in the town. This was concentrated across two main lettings, the 30,000 sq ft (2,787 sq m) pre let to Salmon at Clarendon Works and ASOS acquiring 75,000 sq (6,967 sq m) ft at Leavesden Park.

This strong start to the year follows an excellent 2016, which saw 213,000 sq ft (19,788 sq m) of office space transacted. Savills notes that this figure was nearly three times the total of 2015 and signified the best year on record since 2000.

Due to ongoing corporate commitment to the town, developer confidence has since returned to the Watford office market. Examples include Columbia Threadneedle speculatively developing a 60,000 sq ft (5,574 sq m) building at Croxley Park and Boultbee Brooks Real Estate’s 30,000 sq ft (2,787 sq m) Clarendon Works building, which was subsequently pre-let to Salmon earlier this year.

As a result, Savills has seen strong rental growth in the Watford market, increasing by as much as 23% in the last year. Grade A stock is now being transacted at £32 per sq ft (£344 per sq m) with space under offer on Clarendon Road at this rental level, compared with £26 per sq ft (£279 per sq m) 12 months ago. With supply continuing to fall and occupier demand remaining strong, Savills anticipates that prime rents could reach up to £35.50 per sq ft (£382 per sq m) by 2019.

Currently only 103,882 sq ft (9,650 sq m) remains available in Watford,  a 33% decrease on last year’s figure. The problem is even more acute in-town, where there is only 13,720 sq ft (1,274 sq m)  of Grade A space remaining, which is already under offer to an existing town centre occupier. Savills research shows that there is currently more than 673,550 sq ft (62,574 sq m) of requirements in the northern sector of the South East office market, but Watford is currently unable to capitalise on this due to its critical lack of stock.

Andrew Willcock, director in the South East office agency team, comments: “Watford has continued to undergo a significant revival over the past 18 months, with a strong start to the year following an excellent 2016. This renewed confidence has already seen developers return to the town and we hope that the success of the first wave of speculative office buildings will encourage further development. Boasting superior transport links to its surrounding locations, Watford has a real opportunity to capitalise on the strong demand from occupiers in the region.”


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