Bolstered by two significant Government acquisitions in Birmingham and Leeds, the regional office market across the Big 6 cities has recorded the highest quarterly take-up for at least 10 years according to JLL’s latest research.
The volume of office space taken in the UK’s Big 6 in Quarter 3 (Q3) totalled 1.86 million sq ft, with combined take-up over the first nine months of 4.1 million sq ft, 27% higher than the same period one ago.
Unsurprisingly, due to the two Government deals, the public sector accounted the largest of share of take up at 36%. The prelets at 3 Arena Central, Birmingham (238,988 sq ft) and Wellington Place, Leeds, (378,000 sq ft), both part of the Government’s UK hubs programme, also contributed to record breaking quarters in both cities.
As a result, office leasing activity in the Big 6 markets has already matched the ten year annual average of 4.1million and JLL anticipates is likely to reach, if not surpass, last year’s year-end total of 4.8 million sq ft.
Barrie David, research associate director, at JLL said: “Government pre-let deals aside, quarter three, which is typically impacted by the summer holiday lull, has seen strong levels of office activity across most of the Big 6 office markets.”
Across the Big 6 office markets, there is 0.47 million sq ft of new space to be delivered during the remainder of 2017, with a further 1.6 million sq ft due over 2018 and 2019. Much of this 2.1 million total is concentrated in Manchester (0.84 million sq ft) and Birmingham (0.81 million sq ft). Bristol is the tightest of all the Big 6 markets with a new Grade A vacancy rate of zero and there is no real sign of this pressure being alleviated through pipeline activity with only 185,170 sq ft due to be delivered by end 2018.
Chris Mulcahy, director of office agency, at JLL, added: “The pipeline of new office supply across the Big 6 cities needs to be set against relatively strong levels of take-up this year, particularly in Manchester, which means office vacancy rates should only rise temporarily.”
Q3 Big 6 office take up:
- Birmingham – 402,000 sq ft bolstered by the 3 Arena Central deal which was the largest office pre-let to take place in the city in a decade.
- Bristol – 173,000 sq ft was taken up and is the highest Q3 figure for over a decade. The largest deal in the city was JLL’s letting of circa 17,000 sq ft to Grant Thornton.
- Edinburgh –213,100 taken up, which has already pushed year-to-date take-up in line with the five year quarterly average.
- Glasgow – 63,600 sq ft transacted in the city centre, Q4 is anticipated to see more activity.
- Leeds – 557,990 sq ft was transacted; the government’s pre-let of 378,000 sq ft has resulted in the best ever quarterly Leeds office take-up figures.
- Manchester – 447,800 sq ft was transacted which was the highest level of third quarter take-up since 2010.
