Regional office take up in UK’s major cities hits five year low

The latest research from real estate adviser GVA claims that Q1 2017 office space take-up across the UK’s ‘Big Nine’ regional office markets was at its lowest level for five years. At 23 percent below average, activity was particularly low in the city centre market where only Cardiff recorded above average take-up. Out-of-town markets were more resilient however with Bristol, Edinburgh, Liverpool and Newcastle recording above average take-up. Professional services made up 28 percent of all take-up over 5,000 sq. ft. in the city centres during Q1, slightly higher than the usual profile, led by legal and engineering firms. Deals to universities in Cardiff and Bristol meant that the education sub-sector made up 15 percent of activity. It was a strong quarter for the Technology Media and Telecom (TMT) sector, which increased its share to 18 percent compared to an average of 13 percent, while recruitment companies were also very active (9 percent of take-up).

Carl Potter, Senior Director and National Head of Offices at GVA comments: “Encouragingly, the level of transactional activity tends to increase quarter on quarter during the year. Following the Government Property Unit’s deal in Bristol in December, no further GPU deals have been signed yet this year. However, transactions are being lined up in seven other cities across the Big Nine cities, most of which are well progressed and these very large deals will be a considerable boost to take-up figures throughout the year.”

He adds: “For some cities, such as Manchester, the below average Q1 take-up can be put down to several factors, including the fact that the sheer number of transactions in the final three months of 2016 suggested that we were likely to see reduced figures at the start of this year.”

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