EMPTY OFFICE SPACE SPARKS CUT PRICE RENT - The Wharf
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The fallout from the dotcom crash is to blame for a bounty of vacant office space in South Quay, with landlords offering cut price deals to fill the buildings, according to a leading Docklands estate agent.

SBH Docklands director Nick Haywood said tenants are ``still king'' in the South Quay market as the legacy of the infamous telecom crash still haunts landlords.

``One of the things that Docklands and particularly South Quay suffered from is that we had an excellent market in 1999 and particularly 2000 and a lot of that was driven by telecom and dot com companies,'' he said.

``It became the place to be and rents rose quite dramatically in 2000, doubling and then some and then they had the crash.
``Landlords and companies that still have lease liabilities will do almost any deal to get rid of it. ``Certainly last year we saw space on the market at nil rent.''

He said there was acres of space available but said it was not moving ``as fast as we would like''. He added that tenants would continue to drive the market for the next 12 months and was advising clients to wait at least six months for a deal.

The struggle to fill offices is compounded by the fact that many sites are larger than 10,000sq ft. But he said South Quay's main advantage is that it has modern suites and is a cheaper alternative to Canary Wharf. ``I wouldn't say we've got a buoyant market, but it's certainly a more active market,'' he said.

His comments come as a quarterly property report from CB Richard Ellis said a sharp drop in rentals outside of Canary Wharf had led to a ``subdued'' first quarter for Docklands' office space. Take-up was 134,000sq ft, down from 253,000sq ft for the fourth quarter of 2004.

But Rupert Cherryman, director of commercial agent Cherryman, said activity was picking up in South Quay with HSBC and Tube Lines taking a total of 39,000sq ft.

``There is still pretty good quality stock compared to central London and there are definitely signs of activity compared to three years ago when there was literally tumbleweed blowing down the road,'' Mr Cherryman said

Edited by Renato Castello
(Filed: 09/06/2005)