July 21, 2015
Regional cities experiencing significant growth in office take-up
City Centre office take-up across the Big Nine Cities during the second quarter of 2015 is almost 50 percent ahead of the five year quarterly average, the latest quarterly review of the regional office occupier markets by GVA has revealed. The regional office markets have continued to demonstrate a strong occupier story, led by Birmingham where take-up for the half year point has exceeded all records at 650,000 sq ft, helped by HSBC’s announcement to locate its new 212,000 sq ft retail bank HQ into Miller’s Arena Central scheme. Other centres also had above average deal levels, with take-up 65 percent above average in Leeds and well above average in most other cities. Significant deals for Leeds include a 51,500 sq ft pre-let to Addleshaw Goddard at 3 Sovereign Square and 49,600 sq ft to PwC at Central Square. Both buildings are due for completion during the second half of next year.
Occupier confidence continued to grow in Manchester which aside from attracting larger deals of 45,000 sq ft to Ford Credit and 42,000 sq ft to Freshfields at Arndale House seeing an exceptionally strong base of 10,000 sq ft lettings to show significant overall take up levels.
In Edinburgh the supply of larger floorplates is becoming sparse as speculative schemes under construction are gaining interest. This tightening of supply has been further exacerbated by the conversion of offices to other uses and has also prompted more activity in peripheral locations.
In Bristol a number of 2 to 12,000 sq ft grade B deals have taken activity above the quarterly average, while despite below average quarterly take-up in Glasgow, Grade A demand is at its highest since pre-recessionary times. There has been a steady level of sub 10,000 sq ft deals in Liverpool but there are larger deals in the pipeline. Cardiff city centre has had a significant increase in occupier activity over the past year, where take-up has been over 100,000 sq ft in three of the past four quarters, compared to just four of the previous 20 quarters.
Out of town there has been a similar success story with take up exceeding 1 million sq ft for the first time since the downturn, with two stand out deals at the Soapworks in Salford Quays and International House adjacent to Birmingham Airport.
To view the Big Nine report click here.