Regional UK Office Markets First Half 2014

This week Metropolis looks at office activity in all the major UK cities in Q1 & Q2 and compares with the 6.5m sq ft of first half of 2014 take-up in London.

Birmingham – Take-up in the first half of 2014 was a modest 220,000 sq ft, however big recent lettings to Birmingham City University and High Speed 2 HQ promise a better second half of the year. There are a number of outstanding requirements in the city including a number of law firms.

Bristol – Take-up in the first half of 2014 was a respectable 300,000 sq ft including deals to HSBC, Broadcom and the NHS. Some 40 deals were completed in Q2 with future transactions likely to involve energy companies and professional occupiers in the area. Metropolis is tracking some 20 searches in the area, plus lease expiries.

Manchester – Take-up in the first half of 2014 was a remarkable 802,000 sq ft with large lettings to the likes of Barclays at 4 Piccadilly Place; Slater Gordon took 104,000 sq ft at 58 Moseley Street; 35,000 sq ft to Towergate Insurance at 3 Hardman Square; 25,000 sq ft to Ford Capital at 1 First Street, with an option on more; and 60,000 sq ft to Autotrader also at 1 First Street. There were also Emirates and Costain lettings at Manchester Business Park. Future requirements include a number of professional services companies and TMT firms.

Leeds – Take up in the first half of 2014 saw 260,000 sq ft transacted with lettings to Ashcroft Rowan; Sanef taking 24,242 sq ft of space at St John’s Centre and University of Law’s relocation from York to Park Row taking 26,337 sq ft. Metropolis is currently tracking 40 office requirements in Leeds.

Edinburgh – Take up in the first half of 2014 saw 380,000 sq ft let, with deals to Rockstar with its 75,000 sq ft acquisition of The Scotsman newspaper’s headquarters on Holyrood Road. Other city centre deals include Techcube’s 26,600 sq ft in Argyle House and the Faculty of Actuaries acquisition of 10,000 sq ft at Exchange Crescent. Metropolis is monitoring over 20 further requirements but deals are stalling ahead of the referendum vote.

Glasgow – Take up in the first half of 2014 saw a disappointing 194,000 sq ft let, although there were substantial deals just after the mid-year to Cigna and Network Rail. There are future pre-lets to Deloitte and Grant Thornton on city centre schemes to come.

In total, nearly 2.2m sq ft of office lettings took place in regional cities in the first six months of 2014. Overall this suggests that take-up is around one third of London activity at present. However, with very few office scheme completions in major centres outside London in recent years, the opportunities to relocate have been restricted. Most of the regional cities now have schemes underway, so a slow growth in the number of office transactions is expected over the next two years.

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