USING OCCUPIER SURVEYS AS AN INDICATOR OF FUTURE OFFICE DEMAND: THREE SURVEYS IN LONDON AND SOUTH EAST ENGLAND
||Marston, Andrew; Kim Politzer; Jo Warren
||USING OCCUPIER SURVEYS AS AN INDICATOR OF FUTURE OFFICE DEMAND: THREE SURVEYS IN LONDON AND SOUTH EAST ENGLAND
||Book of Abstracts: 13th Annual European Real Estate Society Conference in Weimar, Germany
||An appreciation of occupier demand in local office markets is of vital importance in understanding those markets for property investors. The use of employment statistics and forecasts has been used extensively in order to measure the demand for property, in particular office property. They have then been integrated into property forecasting models of local and national markets. Such models attempt to measure market demand by use of widely available macroeconomic statistics. However it is essential that such forecasts are placed into some context. Surveys of occupier intentions can be a useful tool in guiding and explaining the outputs of real estate market models. Regular surveys of businesses now form a key element of the armoury of the economist being used along side the army of official macroeconomic statistics. Prominent examples of such surveys include the Purchasing Managers Index (PMI), produced by NTC Economics for the Chartered Institute of Purchasing & Supply and the Royal Bank of Scotland and the CBI and PricewaterhouseCooper’s quarterly Financial Services Survey. Both attempt to measure market confidence across a number of indicators by opinion based surveys. However, the use of comparable survey techniques in the property sector is limited. The RICS undertakes a survey of its members in order to monitor market confidence in both the residential and commercial sectors, but crucially this involves interviews with intermediaries, not occupiers themselves. In addition there is the CBI / GVA Grimley Survey of Property Trends which is national in focus and is limited in its local market application. There are examples of other surveys but they are often ad-hoc and responsive in nature, oriented towards the impact of specific factors on the office market (e.g. new technology, new legislation, environmental regulations etc.). This paper aims to show the importance of occupier surveys in aiding the immediate understanding of local markets and the trends that could be expected over short and medium term outlooks. It uses, as examples, evidence from a series of such surveys conducted between September 2004 and September 2005 in three different office submarkets in order to provide a clearer picture of the potential demand for office space over a three year timeframe. The three studies were: * a survey of banks in the City of London; * a survey of occupiers across multiple sectors in the West End of London; and, * a survey of information and communications technology (ICT) occupiers in the South East of England. // All three surveys had a core aim of examining the potential for growth in demand for office space from companies. In addition each survey explored factors relating to the drivers of this growth and the attractiveness or otherwise of the local market under investigation. The central findings from the surveys will be outlined in the paper, providing the first opportunity to compare and contrast the studies. The paper will conclude with the lessons learnt from the surveys and the benefits attained from their undertaking.
||occupiers; City of London; West End; South East England; Thames Valley; offices; banks; ICT
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