The real estate sector in the UK is already in a bad shape and now Jones Lang LaSalle has forecasted that leasing of properties for office uses is going to go worse from where it is already, in the coming year. The forecast says that most of the offices leases that are going to happen in coming year will be in the normal course of action such as leases running out etc and not due to any growth in business or in the need for new office.
Jonathan Fear, the head of National Office Agency of Jones Lang LaSalles said that more than 40,000 out of 2.8 million sq ft of office space area in the city centre in Birmingham is occupied by lessees.
According to him the situation of real estate is going to go worse once retrenchment starts in the companies, as they will not need large office spaces.
On the other hand, the available space is expanding. Birmingham city centre is predicted to have 900,000 sq ft of office space in the coming 2 years but it does not seem that this will lead to too many leases. Most of the people holding office spaces currently would like to decrease their office areas in order to cut costs and would probably want to look for better deals somewhere else or would look for lease re-gears. Many companies are now trying to fill vacant office spaces through desk space rental and shared office space, this is reflected by the increase in hits on websites such as Desk Space Genie.
There is not much clarity yet on the activity of tenants in this regard, though it is clear that many businesses want to cut down on the expenses on office space.
