Regional office market sees steady improvement yet underlying concerns remain

The regional office occupier market has improved each quarter this year following a sluggish start, according to a recent report by GVA.

The Big Nine regional centres according to GVA – Birmingham, Bristol, Cardiff, Glasgow, Manchester, Leeds, Edinburgh, Newcastle and Liverpool, all recorded the highest quarterly take-up this year. City and out-of-town take-up totalled 1,940,000 sq ft in Q3, 22 per cent above the quarterly average.

The Big Nine, a quarterly review of the market by the UK’s largest independent commercial property adviser, indicates slow but continued growth in 2011 overall, yet points to a potentially more challenging 2012.

Carl Potter, director and national head of offices, based at GVA’s Birmingham office comments: “Birmingham and Cardiff city centres and Glasgow, Manchester and Newcastle out-of-town markets have performed particularly well over the past quarter. The deals in the pipeline for the rest of the year will guarantee a solid year’s activity, although renewed economic uncertainty and patchy long term enquiries indicate a tough year ahead.”

While headline rents and incentives have remained static this year, the shortfall in new supply has seen some deals becoming more competitive. Conversely, the glut of secondary property is causing average rents to weaken.

Carl Potter continues: “Take-up in the nine city centres has been spread more evenly than usual this quarter, with no exceptional levels of take-up in any one city.”

The out-of-town market took a greater proportion of activity than usual (42 per cent), as a result of strong activity in Glasgow.

City centre take-up totalled 1.12 million sq ft in Q3, 10 per cent above the quarterly average. The 94,000 sq ft letting in Liverpool at the Plaza to Weightmans Solicitors was the largest in Q3. Availability of prime space continues to creep down in the city centres, particularly in the core.