Take-up on UK business parks during the second half of 2001fell by 16.5% during compared with the previous six months, according to new research from GVA Grimley. But activity is still 4.2% above the average level for the period since 1996.
The absence of pre-lettings is largely responsible for the downturn, with pre-let construction activity down 33% on the previous six months. Carl Potter, National Head of Business Parks at GVA Grimley, said: â€˜Over the course of GVA GrimleyÂ's last three business park reviews, we have witnessed a decline in speculative development and a slow but steady increase in availability. The last six months, though, have seen a dramatic and sudden increase in vacancy rates - a trend attributed to both the continued downturn in the technology sector and the aftermath of September 11.â€™
Availability of space on UK business parks has been increasing steadily since a trough of 5.2% in December 1998. And the amount of vacant space rose sharply between June and December 2002 from 6.6% to 8.3% of stock. In total 4.8 million sf of business park space is now standing empty.
But Potter said the market fundamentals remained solid. â€˜Although at first glance the figures might seem discouraging, they do indicate that things arenÂ't all bad,â€™ he said, â€˜Although there has been a drop in the number of lettings, this is still above average since 1996. Furthermore, developers are still active - particularly in the speculative market - reflecting an underlying belief in the business parks market.â€™