SMEs fuel highest demand for regional office space since downturn

Demand from small and medium-sized enterprises in Britain’s regions helped boost office take-up to its highest level since the start of the downturn, according to CBRE, the leading commercial property and real estate services advisor.

Across nine key regions including Leeds, 6.35 million sq. ft. was transacted over 2014 – the equivalent of 83 football pitches. This is up 15% on the total amount of office take-up during 2013 (5.51 million sq. ft.) and over a third more (38%) than the five year annual average of 4.60 million sq. ft. Growth in these regions outstripped the growth of office occupation in the South East where uptake totaled 2.35 million sq. ft.

Jonathan Shires, Senior Director of CBRE’s Leeds Office Agency team, said: “Business confidence is a crucial indicator of future economic performance and these figures show that businesses large and small feel secure enough to commit to larger office space. It’s particularly encouraging that the highest levels of office take-up are taking place in the regions – exactly where it is needed for the UK to continue to have a balanced and robust recovery.

“Across the Yorkshire region we’re seeing a continued flight to quality and sustainability with those buildings offering Grade A space, EPC Ratings of B or above and BREEAM ratings all seeing more interest than secondary stock. This is due to the long-term cost savings and firms’ CSR Policies.

“We expect positive demand to continue during 2015 with further high profile pre-lets and this will put pressure on the limited availability of Grade A space. As a result, occupiers are likely to commit early to deals in order to secure good quality office space, while developers are committing to speculative schemes.”

The growth in office occupancy in the regions follows a record number of 30-to-39-year-olds leaving London. According to the Office of National Statistics nearly 22,000 left the capital for the regions in the year to June 2013 (a 25% increase on 2010).