Take-up of office space in the South East reached 802,669 sq ft in Q3 2012, an increase of 7% from the previous quarter, according to Strutt & Parker’s latest research.

Whilst sub 20,000 sq ft deals continue to dominate the market, Q3 did witness two deals in excess of 100,000 sq ft with Huawei taking 139,000 sq ft at Green Park and IMG agreeing to lease 113,000 sq ft at Stockley Park.

Strutt & Parker's findings identify a further 715,000 sq ft of space under offer across the South East which will mean that take-up for 2012 reaches circa 3m sq ft; a 31% decrease from the five year average.

Occupiers continue to demonstrate a preference for Grade A space with only 24% of deals occurring on Grade B space in Q3. However, take-up of Grade A New has also fallen to its lowest level in 14 years, accounting for only 19% of all transactions as a result of an ever decreasing supply of new product across the South East, according to the research.  Only two schemes will be completed by the end of 2012, delivering 186,400 sq ft of space at the Stanza in Uxbridge (80,000 sq ft) and Velocity in Weybridge (106,400 sq ft).

Rhodri Shaw, partner in the national markets office agency team at Strutt & Parker, said: "The market still has its challenges, which are reflected in the disappointing level of overall take up so far this year. Whilst it is encouraging to see a continuation of the larger 100,000 sq ft transactions, it is the lack of take up by the medium sized companies in the 20-40,000 sq ft size range which is making the difference. This is compounded by the fact that, historically, these occupiers have the ability to take 10 year plus leases. All eyes are now focused on the letting of the next generation New Grade A developments."