Member Article

Take-up improves in the Sheffield office market

There was a 10 per cent increase in take-up in the Sheffield office market during 2014, compared to 2013, according to the latest figures.

The total office take-up during the past 12 months was 272,608 sq ft, compared with 247,566 sq ft in 2013.

Rob Darrington, partner with leading Sheffield-based property consultancy Commercial Property Partners (CPP), said these statistics suggested that confidence was returning to the office market in the city.

He revealed that although the vast proportion of enquiries remain to be for the smaller suites, in 2013, 80 per cent of deals were sub 5,000 sq ft, while last year the figure had dropped to 75 per cent.

Overall there were 60 office deals in 2014, compared with 68 in 2013, but the size of deals had increased from 3,641 sq ft in 2013 to 4,543 sq ft last year. This is a reflection of larger companies finally biting the bullet and relocating, taking advantage of the stock whilst it is still available.

Mr Darrington commented: “The combination of on-going demand and reduced availability, together with deal sizes getting bigger, is a virtuous circle. It is fair to say to predict that all these factors will provide a tremendous impetus to the market, which should be become more buoyant over the next 12 months.

“Significantly, the increased level of activity is a sure sign that momentum had returned to the Sheffield office market, especially for prime office space. I expect this momentum will be reflected in healthy take-up levels in the Spring,” said Mr Darrington.

“Overall, the take-up this year is a little behind the 10-year average of 293,750 sq ft, while available stock has decreased by 21 per cent compared to last year, which could stimulate demand for speculative development,” he added.

Headline rents in the new Grade A developments, such as CTP’s 3 St Paul’s Place, are now £23 per sq ft, with existing Grade A space in other locations available at £14 per sq ft. Meanwhile, well-located, existing refurbished buildings are achieving rentals of £12.50 per sq ft.

Mr Darrington added: “The news that work is now well underway on other flagship schemes such as the next phase at Sheffield Digital Campus, is a telling indication of renewed confidence in the market, which would lead to an increase in headline rents.”

This was posted in Bdaily's Members' News section by Robert Beaumont .