Newcastle Office Market

A recent 2017 report by Knight Frank, revealed that Newcastle city centre take-up fell by 15% during 2016 reaching 220,000 sq ft.

Business Services accounted for the largest proportion of city centre take-up in 2016 at 22%. There was also a continued increase in activity in the TMT (technology, media and telecom) sector.

Out of town, total take-up reached 492,000 sq ft, with the North East has attracted an increasing number of ‘footloose’ occupiers in recent years.

Key transactions included a 35,000 sq ft letting to Convergys at The Rocket in the Stephenson Quarter. The most significant deal in the TMT sector was Zerolight’s new lease of the entire LiveWorks development on Newcastle Quayside (15,000 sq ft) only months after the building completed.

Metropolis is monitoring around 20 companies with identified or possible office searches in Newcastle.

Figures from local agent Naylors show 177,041 sq ft of out of town office space in Newcastle was let in Q1 of 2017. In contrast, only 33,461 sq ft of city centre office space was let in the same period. In Q1 2017, Frank Recruitment let 19,000 sq ft at the St Nicholas Building, while Sir Robert McAlpine is taking 8,000 sq ft in the same building.

Out of town, Quorum Business Park secured the largest letting with Sitel taking 47,000 sq ft. Other significant deals included Leeds Building Society moving their regional HQ from Silverlink to Cobalt Business Park and Parseq acquiring 20,000 sq ft at Camberwell House, Doxford Business Park.

The office market in Newcastle remains relatively quiet, with the majority of companies approaching lease events in 2017, choosing to renew current arrangements rather than search for alternative space. Future market growth is likely to mainly come from companies outside the region inward investing and expansions.

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Top Ten market moves in Newcastle

A recent report on the Newcastle office market by GVA Bilfinger highlighted some of the major market movers and skakers.

1. Q1 take-up reached nearly 150,000 sq ft in Newcastle, with Sitel taking 48,000 sq ft at Quorum Business Park;

2. Accenture, the management consultant, took 15,000 sq ft of extra space at Cobalt Business Park;

3. EY (Ernst & Young) recently took 22,900 sq ft at One City Gate East, while Ubisoft took 17,000 sq ft at Haymarket Hub;

4. Litterboss is taking 12,100 sq ft at Digital House in the Team Valley;

5. Shepherd Offshore, the offshore logistics firm, has submitted plans to develop a £4m two-storey head office at the Walker Offshore Technology Park in Newcastle-upon-Tyne;

6. Newcastle University is to build the £30m National Institute for Smart Data Innovation (NISDI) at the new Science Central site in Bath Lane, Newcastle-upon-Tyne

7. Accord Healthcare is to set up a pharmaceutical plant at the former Sanofi site in Newcastle-upon-Tyne;

8. The recently completed 35,000 sq ft Stephenson Quarter Rocket scheme is rumoured to be under offer;

9. Commercial Estates Group is revamping 60,000 sq ft at Cuthbert House, while Schroders is refurbishing 10,000 sq ft at Earl Grey House;

10. The former Eversheds’ space at Central Square South will add some 50,000 sq ft to Grade A space in the city;

Metropolis continues to monitor a number of companies looking for office space in the city.

Newcastle boost

A recent report from property consultant BNP Paribas highlighted a rise in office relocation activity in Newcastle, with office take-up of over 363,000 sq ft in the first half of 2015. This was a 19% increase on the first half of 2014.

Although 95,000 sq ft of offices was let in Newcastle city centre in the first 6 months of the year, it was the out of town market which saw the most activity with 270,000 sq ft of offices let.

Office deals included iParadigms 19,000 sq ft move to Wellbar Central and Performance Horizon taking 9,800 sq ft at the West One building. Gardiner & Theobald, Adecco and Office Angels all took smaller offices. Out of town, CHP took 17,000 sq ft at Quorum Business Park; Bede Gaming at Great Park, Hewlett Packard and DNV took a combined 21,000 sq ft at Cobalt Business Park.

During Q3, Accenture has signed for a further 50,000 sq ft at Cobalt Business Park and Greggs has agreed a deal to a new 25,000 sq ft HQ at Quorum Business Park.

Current medium/large requirements being tracked by Metropolis include a tech company, a housing association and public sector bodies.

Late 2015 will see the completion of 35,000 sq ft of grade a offices at the Rocket office scheme at Stephenson Quarter in the city centre.

Newcastle goes out of town

Office take-up in Newcastle reached 772,000 sq ft in 2014 according to a recent report by consultant BNP Paribas. The figure was 14% above the 5-year average, but 8% down on the 2013 total.

Much of the activity was in the out of town business parks with 546,000 sq ft of transactions outside the city centre according to the property group. For example Utiltywise took 77,000 sq ft at the Cobalt 22 Business Park, while Siemens also took 39,000 sq ft at Cobalt and Cofely took 26,000 sq ft at Quorum.

In town the largest deals were University of Newcastle taking 34,000 sq ft at 89 Sandyford Road and Teleperformance taking 28,300 sq ft at Baltic Place.

Stephenson Quarter’s 34,000 sq ft ‘Rocket’ scheme is the only scheme under construction.

Metropolis is currently tracking around 20 office requirements and forthcoming lease expiries in Newcastle which total around 200,000 sq ft in both city centre and business parks.