Southampton 'among star performers' despite Brexit uncertainty
SOUTHAMPTON is one of the “standout performers in the south” ahead of the uncertainty of Brexit, an event heard.
Global real estate and investment giant CBRE chose the city’s Ageas Bowl as the venue for its annual property market insight briefing.
Keynote speaker Kevin McCauley, director of research at CBRE UK, gave an overview of the possible impact of Brexit, the economic outlook and the property market in southern England.
He said the UK’s economic indicators were mixed, with GDP (gross domestic product) for the three months to August up by 0.3 per cent, driven mainly by growth in the services sector.
However, the three months to July were flat and the second quarter saw a 0.2 per cent contraction. Global GDP is forecast to drop from 2.6 per cent to 2.5 in 2020, while in the UK it could fall from 1.2 per cent to one per cent.
Across the south east, GDP is predicted to be only 1.1 per cent in 2019 but 2.1 per cent by 2021.
CBRE regional managing director James Brounger added: “This year’s market insight briefing comes at an extraordinary time from a political perspective.
“As a city, Southampton is seen as one of the standout performers in the south with its strong technology, real estate, education and marine business sectors. It is inevitable that manufacturing will see the most disruption in the wake of Brexit, but we are still optimistic for the outlook for the city and South Coast in general.”
Regional cities took up 6.31m sqft of office space in the year to September, with the south east taking up 3.25m against a 10-year average of 2.9m.
In Southampton, lack of availability affected the volume of “significant” deals in the city centre – but when the city centre was combined with the immediate out of town area, there had been a take-up just shy of 250,000sqft, similar to 2018.
There was 73,765sqft of ‘grade A’ space available in the city and 70,000sqft of ‘secondary’ space, marginally up on 2018.
Kevin McCauley said: “Following a record year in 2018, occupiers in the logistics sector are understandably more cautious when it comes to making decisions, but there is no doubt that demand remains strong, even after a quieter start to the year. This has been particularly the case for the automotive industry which accounted for just two per cent of transactions in 2018 compared to 18 per cent in the year to date.
“In terms of investment, we have witnessed a slowing in deal terms as investors await the Brexit outcome, although expect volumes, especially for good quality assets, to rise once Brexit uncertainty lifts.”