Office take-up reaches five year high
Economic conditions are on the up according to the leading quarterly regional office market report by GVA, which recorded regional take-up of 7.71 million sq ft in 2013, the highest annual take-up within the last five years.
The Big Nine reports in 2013 GVA’s nine city centres recorded the highest level of annual office take-up within the last five years, a total of 4.87 million sq ft. City centre take-up totalled 1,364,399 sq ft in Q4, 29% above the five-year quarterly average and highest quarterly take-up since 2010.
Glasgow’s annual take-up was 47% above average due to Scottish Power starting construction on their 220,000 sq ft stand-alone HQ at Vincent Street, making it by far the most significant deal of Q4.
Carl Potter, Director and Head of National Offices at GVA commented: “It is clear both from investor sentiment and the levels of occupier demand that the UK’s regional cities are once again beginning to push forward. However, moving forward there are clear constraints which will curb new speculative office development. Whilst we have seen the early signs that this market is returning and indeed we now have three speculative developments taking place in Glasgow City Centre, each with different funding ingredients, there is clearly going to be a looming shortfall in Grade A availability. This will provide selective rental growth during 2014 onwards and investors are now more willing to consider an increased exposure to risk where the right levels of return justify it.
“From an occupational perspective there are now a fairly significant number of deals close to finalisation which suggests that we should see 2014 being even better.”
Office take-up in the out-of-town markets also recorded the highest annual total within five years; Q4 recorded 804,500 sq ft, 30% above the five-year quarterly average.
The stand-out city centre for 2013 was Leeds which followed an impressive first half of the year with its highest level of activity in the final quarter. Leeds take-up in 2013 was 76% above its five year annual average.