GVA reveals that another strong quarter has led to a record year across the Big Nine city centre and out-of-town markets.
As revealed in its Big Nine report, analysing the office occupier markets of key UK regional cities, total take-up for the year amounted to over 10 million sq ft for the first time, well over the 9.5 million sq ft. witnessed at the peak of the market in 2015.
The record level of take-up was underpinned by significant lettings to the public sector, in particular the Government Property Unit (GPU), as well as the continuing exponential growth of the serviced office and co-working sector. Five GPU deals over the summer contributed to record levels of activity in Cardiff, Liverpool, Leeds and Birmingham city centres, with the latter two joining Manchester in achieving over a million sq ft of take-up, and formed part of public sector lettings comprising 28% of take-up overall activity. However, even without the deals with the GPU, city centre take-up was still 6% above the five year average.
2017 was also the year that the serviced office and co-working sector continued to plot its growth in the regional office market, with more than 635,000 sq ft totalling 9% of all activity, reflecting a nearly 600% growth from the average of 87,000 sq ft. over the previous five years. Birmingham (32%) and Manchester (24%) have seen the highest levels of activity, whereas Regus (31%) and We Work (16%) were the most acquisitive operators. In the final quarter alone, serviced office provider Regus took 155,000 sq ft of space in four deals across Birmingham, Edinburgh and Liverpool.
Commenting on the report, Carl Potter at GVA says: “2017 was a record year for the Big Nine regional markets, supported by the increasing demand for places where people can work, stay and play. Lettings to the GPU and the rest of the public sector provide a foundation to employment, contributing a critical mass to placemaking schemes that are increasingly retaining talent and reinvigorating the city centres. Simultaneously, the rise of flexible office space delivers a significant level of sq ft. that attracts a diverse workforce and range of occupiers that look for value outside of London. Looking ahead to 2018, we expect deals to the public sector and co-working office space to continue to outperform. There are still GPU deals to complete in the first phase and the recent industrial strategy has committed to further phases and more jobs moving from London.”