Birmingham Upswing

A recent report by specialist Birmingham consultant KWB, reveals that the Birmingham city centre office market recovered in the first quarter of 2017 back to normal Q1 levels.

Office space transactions in the first quarter of 2017 totalling 139,000 sq ft – more than 30,000 sq ft over total transactions in each of the third and final quarters of 2016.  The largest deal of the quarter was by Arcadis’ signing for 22,953 sq ft at Cornerblock which is currently being refurbished, followed by iHub’s 18,378 sq ft new base in Colmore Gate. Recruitment specialist SThree Group was also the first tenant to sign 10,035 sq ft at the newly refurbished 10 Temple Street, on the 4th and 5th floors on a 10-year lease.

KWB say that the first quarter of 2017 was very much on a par with that of 2015. Looking ahead, KWB say that the rest of 2017 looks set fair, with the highest level of office development underway in Birmingham city centre for 15 years (1.4 million sq ft), a good supply of top quality Grade ‘A’ space is coming on stream and should trigger some significant office lettings in the coming months. Schemes include 55 Colmore Row
(160,000 sq ft), Corner Block (112,000 sq ft) and the Lewis Building (110,000 sq ft). The much reported HMRC requirement, which has shortlisted Three Snowhill, Arena Central and Post & Mail building, will see a letting of 200,000-300,000 sq ft and KWB also expect the HS2 halo effect to strengthen the Birmingham city centre office market.

Metropolis is currently tracking over 30 medium and large office requirements in Birmingham. Looking ahead, HS2 will have a major pull in 2017. The city has already seen Laing O’Rourke take 11,000 sq ft at 1 Victoria Square in 2016 and engineering firms and consultants are likely  to be a big sector going for office moves this year. In addition, there are nearly 40 tenants which are approaching decisions on lease or office consolidation plans over the next eighteen months.

 

Towering Ambitions

London Office Developments – Skyline Survey Winter 2016

Metropolis and Cityoffices has just published a special “Skyline” Survey of the central London office development market for the period April 2016 to October 2016. The survey takes a snapshot of central London office construction in Q4 2016, recent completions, recent pre-let activity and looks ahead to future pipeline projects that will shape the next three years.

Highlights include:

– 109 office schemes currently under construction in central London (14.5m sq ft) compared to 78 a year ago
– 4.2m sq ft at demolition stage
– 37 scheme starts in last six months
– office completions over last six months reached nearly 2m sq ft

If you are considering becoming a Metropolis subscriber and would like a copy of the report please email simon@metroinfo.co.uk.

The Metropolis database system holds all of the above construction data and thousands of other leads on end user office requirements, moves and fit-out projects – for details on accessing the leads and joining Metropolis please email simon@metroinfo.co.uk .

Best quarter for Aberdeen

Recent research from CBRE reveals that in the third quarter of 2016, office lettings in Aberdeen reached 66,174 sq ft. This total made it the best performing quarter in Aberdeen so far this year.

The cumulative Aberdeen take-up volume for the first nine months of 2016 was 152,683 sq ft, below average levels for the end of the third quarter. The low oil price continues to impact on office demand although a recent increase in crude prices to $51, is signalling a possibly better year ahead.

The largest Aberdeen letting to take place in Q3 saw serviced office operator Citibase acquire a 22,000 sq ft west end office building at 9 Queens Road. Within the city centre, another floor of nearly 6,000 sq ft has been let to HM Ministry of Justice at AB1, Orega, the serviced office provider, has signed to take 26,000 sq ft on the 1st and 2nd floors at the under construction, 9-storey ‘Silver Fin’ office scheme in Aberdeen.

Metropolis is tracking around a dozen office searches and potential searches in Aberdeen.

Total office space available at the end of the third quarter reached a new high of 2.45m sq ft, which is a year-on-year increase of 45% from Q3 2015. Muse’s 170,000 sq ft Marischal Square development is also under construction and will complete in Q2 2017.

Prime office headline rents in Aberdeen are unchanged at £32 per sq ft, with an absence of recent prime transactions to challenge the current level.

Manchester Office Market Summer 2016

Lambert Smith Hampton has just published its Q2 summary of the Manchester office market.

Manchester city centre office take-up for Q2 2016 reached 218,400 sq ft bringing the total for the first half of the year to 416,110 sq ft. LSH say that a number of large scale transactions are expected to complete in the second half of the year, which could lead to a year end total of 1m sq ft, close to the 5 year average.

Recent transactions included 11,000 sq ft to Mazars at One St Peter’s Square, 33,000 sq ft to the Co-op Bank at Martins House and 16,000 sq ft to Ericsson at MediaCity.

Recent Manchester pre-lets have included:

1 Spinningfields: PWC – 49,400 sq ft
Two St Peters Square: EY – 41,630 sq ft
XYZ: Global Radio – 16,670 sq ft
XYZ: Shoosmiths – 32,000 sq ft
XYZ: NCC Group – 60,000 sq ft

Swinton Insurance is under offer on 160,000 sq ft at 101 Embankment, Freshfields are due to complete imminently on 80,000 sq ft at New Bailey, DWP have a 80,000 sq ft Manchester requirement and PwC are being linked to taking further space at 1 Spinningfields.  There has growth in demand for companies looking to move operations (called northshoring) from London, for example law firm Freshfields, as well as Lonza and Escada opening new city centre operations.

Metropolis is also monitoring over 60 named Manchester office requirements from a wide variety of companies such as the likes of AJ Bell and Weinberger, as well as over 100 approaching lease expiries in late 2016 and 2017.

There is just over 1m sq ft of new office space under construction in Manchester, including schemes such as English Cities Fund’s 190,000 sq ft Two New Bailey and Ask Real Estate’s 164,000 sq ft 100 The Embankment.

 

Cityoffices’ Big London Construction Survey

The Deloitte Real Estate’s London Office Crane Survey, exclusively researched by Cityoffices.net and Metropolis, was published today and given wide press coverage.

The headline conclusion was that the number of offices under construction in central London has rocketed to a 20-year high and now includes 51 new office scheme starts in the last 6 months.

All the details, plus information on the next 200 schemes in the pipeline is available to all Cityoffices.net subscribers with annual subscriptions from only £750.

Contact Andy King at andy@metroinfo.co.uk

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.

Leeds Lettings Surge

A recent office market report on Leeds by Colliers International highlighted a surge of letting activity towards the end of 2015. Office take-up for the Q4 2015 reached 267,000 sq ft (just below the quarterly record) and the total of office deals for 2015 reached over 680,000 sq ft. Around 60% of 2015 was Grade A newly constructed or refurbished space.

The most high profile transactions in 2015, most of which were tipped in advance by Metropolis, included Sky’s 97,000 sq ft deal at Leeds Dock; Addleshaw Goddard pre-let 51,000 sq ft at 3 Sovereign Square and PWC preletting 50,000 sq ft at Central Square,. Legal and financial services accounted for 33% of take-up in 2015, followed by technology and media on 23%. Prime rents are around £27 psf and predicted to rise in 2016.

The Metropolis database reveals nearly 50 outstanding office requirements in Leeds including IPF, RSM and Jet2 with substantial requirements. In total, the fifty firms are currently searching for over 400,000 sq ft of office space in the city, with another 30 firms due to make decisions ahead of lease expiries in 2016 and 2017. Lease expiries are triggering 60% of current relocations.

The availability of grade A office space, newly constructed or refurbished, has fallen to a five year low at 5% and only 7.75 across all grades. More than 530,000 sq ft of new office space is due to be completed shortly including 6 Queen Street; Central Square; Sovereign Square and 6 Wellington Place. Manchester and Leeds have the two most active office construction markets in the UK outside London.

The five new build schemes in Leeds city centre are 30% pre-let with other pre-commitments in negotiation. A number of refurbishments are also underway such as 6 East Parade (45,000 sq ft) and Concordia Works (14,000 sq ft) . Looking ahead, Cadddick Developments has secured planning for a mixed use scheme at Quarry Hill, which will include 107,650 sq ft of offices and BAM have gained consent for another phase of Latitude.