Latest figures show ‘high performance’ in Northern Powerhouse markets across region

The core occupier markets of the Northern Powerhouse maintained their momentum in the second quarter of 2018, despite an apparent fall in activity from the two largest centres.

Analysis of Lambert Smith Hampton’s latest Office Market Pulse report reveals that combined take-up across Leeds, Manchester, Newcastle and Sheffield city centres totalled 675,002 sq ft during Q2, bringing the total for H1 to 1,483,403 sq ft; up 135 per cent on the same period in 2017.

Adam Varley, director of office advisory at LSH in Leeds, said: “Following a phenomenal start to the year, it has been a steady quarter for the core office markets across the Northern Powerhouse, with encouraging levels of demand from larger occupiers across the region.

“While the outlook for the second half of the year remains positive, we would heed a word of caution until such time that these new projects are delivered we expect some of the markets to see a slowdown in the level of take-up, not borne out of a lack of demand, but more due to the looming pinch in immediately available space.”

While take-up across Leeds and Manchester was down on the previous quarter, this was borne out of two major transactions which took place during Q1.

This included: HMRC’s letting of 157,000 sq ft at Three New Bailey in Manchester; and Walker Morris’ 76,000 sq ft letting at 33 Wellington Street in Leeds.

Of the 130 transactions that completed during the three months to June 2018, 14 were over 10,000 sq ft accounting for 46 per cent of the total space let or sold.

Notable transactions included:

WSP’s acquisition of 53,839 sq ft at 8 First Street, Manchester Handelsbanken’s 39,934 sq ft letting at 101 Barbirolli, Manchester Ministry of Justice’s acquisition of 25,938 sq ft at 5 Wellington Place, Leeds South Yorkshire Housing Association’s 25,000 sq ft letting at Rockingham Court, Sheffield University of Newcastle’s acquisition of 13,606 sq ft at Northumberland House

Professional services remained the most dominant sector across three of the four markets, while activity in Leeds was split across banking and finance, professional services and technology, media and telecommunications occupiers.

Overall, supply stood at 4.2m sq ft, down eight per cent on the previous quarter. Availability reduced across all cities excluding Newcastle, with Manchester unsurprisingly seeing the strongest fall of 15 per cent, followed by Sheffield at 11 per cent and Leeds at four per cent.

Grade A supply now equates to just 29 per cent of total availability.

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