Three times as many deals were completed in Q1 2017 than in the previous quarter, resulting in an impressive 170,000 sq ft of office space being occupied and demonstrating a significant uplift in confidence in Sheffield’s office market. This is according to The Sheffield Office Market Pulse, the latest research from national commercial property consultancy Lambert Smith Hampton (LSH) which provides investors, occupiers and developers with detailed insight across the city.
Tom Burlaga, who heads up the Agency team at LSH Sheffield, comments: “The professional services sector accounted for the lion’s share of activity in terms of number of deals, but the burgeoning TMT sector saw the largest volume of space taken-up during the quarter – a trend which is currently being witnessed across all of the major Northern Powerhouse cities.
“Activity remains focused in the city centre, with refurbished buildings such as St James House in the Cathedral Quarter experiencing a flurry of new lettings. Q1 2017 saw a number of larger deals complete, with four transactions in excess of 15,000 sq ft. There are also a good number of larger requirements in the marketplace, suggesting that confidence is returning among the larger corporates. This contrasts with 2016, where the majority of deals were sub-5,000 sq ft.”
Though grade A office supply across Sheffield continues to dwindle, the city’s office supply will receive a welcome boost in Q2 2017, finds the research. The city centre currently has just two buildings which are capable of adequately accommodating a requirement of over 10,000 sq ft. However, the demolition of the former Grosvenor Hotel is close to completion, paving the way for the construction of HSBC’s new 140,000 sq ft offices and hopefully stimulating further development. Meanwhile, the imminent completion of Acero Works at Sheffield Digital Campus and refurbishment of Steel City House and Westfield House (formerly Milton House) will inject a further 166,000 sq ft of much-needed grade A/B space into the market.
Tom Burlaga continues: “Despite healthy demand from investors, the office investment market in Sheffield is characterised by a lack of good quality stock, which has impacted on transaction volumes. However, pent-up demand, together with the continued low interest rates and a lack of alternatives, mean well-let buildings with solid unexpired lease terms are likely to attract significant interest.”