October 11, 2013
Highest take up of regional office space for five years
Increasing occupier confidence is leading to the highest take up of regional office space for five years. According to property consultants GVA’s latest quarterly review of the “big nine” regional office occupier markets, total take-up in the third quarter of 2013 was 7 per cent above the five-year quarterly average at 1,737,000 sq ft. Particularly encouraging, say the analysts, has been a recovery in markets that have been subdued for some years. Carl Potter, GVA’S National Head of Offices commented: “In general many are now gearing up for the next phase of activity, although there still remains a real prospect that a lack of appetite for new speculative development will lead in some markets very quickly to a shortage in Grade A supply.”
Across the regions take-up in Q3 was twice the average in Newcastle and well above average in Bristol and Edinburgh; with overall take-up in Edinburgh double the quarterly average. In Newcastle the most significant deal is 24,000 sq ft to PwC at Central Square South, while Barclays are also under offer for 35,000 sq ft at East Quay 5. In central Manchester, whilst the completed transactions within the last quarter are slightly below average, the level and depth of demand being encountered will come to fruition over the next six months.
Significant recent deals in Birmingham include the 15,000 sq ft city centre relocation of Allianz from Birmingham International to Colmore Plaza and serviced office provider I2 taking 24,000 sq ft at 2 Snowhill. Liverpool has seen its largest deal this year with Hampson Hughes taking 34,000 sq ft at the Edward Pavillion building, Albert Dock.
In Leeds, Central Square (the former Lumiere site) sold recently and has planning consent for circa 195,000 sq ft of offices and Palmer Capital has bought a majority stake in the part developed Finzels Reach site in Bristol where planning permission exists for 164,000 sq ft of offices.
A lack of new stock is being addressed in Cardiff, where, in addition to construction of JR Smart’s Capital Quarter, British Steel Pension Fund is developing a creative industries media centre and WAG have issued an OJEU for a new 90,000 sq ft office building at Callaghan Square with the intention of ensuring available Grade A accommodation.
The Big Nine: Quarterly review of the regional office occupier markets can be downloaded from here.