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The RO Developments and Office Agents Society (OAS) Roundtable Debate: Is the Market Ready for Office Development and Refurbishment in the South/South East? Pt 3

wantspacegotspace.co.uk - Rockspring European director Phil SturdySpeaking at the event, Rockspring European director Phil Sturdy said that even with all the risks of building speculatively in this market, it was an opportunity not to be missed. “We started looking at the SE office market about three years ago and we took the view that the standing investment stock was too expensive for our cost of capital. We felt the potential returns were available to build speculatively in certain markets. Is it ripe for development? Yes”.
Knight Frank’s Emma Goodford, who heads up the company’s South East office agency, said that the opportunity exists for developers, if the financials are watertight from top to bottom.

She said: “At the end of the day building is all about underlying occupier demand. There’s almost a million sq ft being developed or completed which proves that there is appetite and demand. But what Rockspring and others need to do now is prove to the market that there has been a step change in value. That’s the thing that has been holding people back from building, because there hasn’t been the rent there to bring viability.”

Bourne agreed but added that “refurbishment or development projects need to satisfy the underlying market dynamics and careful analysis should be undertaken to identify the niche prior to pressing the button. The focus tends to be on building large 100,000 sq ft schemes but the gap in the market might be for smaller buildings or lower specifications which can deliver higher returns for less risk.”

Posted by The Editor (wantspacegotspace) on 9th April 2013

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