Savills : The only way is Essex for office investors as sales volumes triple in 12 months

According to Savills, total sales volumes in the Essex office investment market are set to hit circa £100 million by the end of 2016, almost tripling last years figure of £33 million. This has been driven largely by the strength of local office rents and the continued popularity of Permitted Development Rights (PDR).

Notable deals include the sale of First Data's 117,000 sq ft (10,869 sq m) headquarters on Endeavour Drive in Basildon to Maya Capital for £20 million, the £14 million sale of Regent House to developers Quinata Global and Boultbee Brooks purchase of Stone Cross in Brentwood town centre for £10.05 million.

Savills partly attributes this significant increase in transaction volumes to constrained levels of stock and a lack of new development, which has seen rents across Essex rise to an average in excess of £20 per sq ft (£215 per sq m). With prices relatively low in comparison to the nearby south east and Central London office markets, investors are taking advantage of the potential to generate strong returns as a result.

Mike Storrs, associate director at Savills Chelmsford, comments: 'Essex has seen a phenomenal amount of investment over the past year as investors continue to recognise the strength of the local market. The popularity of office to residential conversion through the Government's decision to extend PDR has contributed to the upward trend in rental levels as there is now generally a lack of good quality space. Essex also remains a cost effective alternative to London and the County benefits from good road and rail links, particularly with Crossrail extending to Shenfield in 2018.

'These conditions are unlikely to change as we head into 2017. Investors will continue to be attracted by the potential for rental growth, good levels of demand from office occupiers and their ability to trade stock if required.'