Office take-up across the Big Nine markets in 2016 reached the highest level during Q4. Activity was underpinned by three large city centre deals including Swinton Insurance in Manchester, HMRC in Bristol and Hugh James Solicitors in Cardiff.
Take-up was significantly boosted by activity in Manchester which saw an above trend performance, despite EU referendum uncertainty.
Total city centre take-up in Q4 reached 1.67 million sq ft, 30% up on the five year quarterly average and the highest city centre quarterly take-up for a year. Manchester accounted for a third of the take up, whilst Bristol and Cardiff both saw 100,000 sq ft plus headline deals, with HMRC at 3 Glass Wharf and Hugh James Solicitors at 2 Central Square, respectively.
Q4 out-of-town take up amounted to 0.86 million sq ft, up by 4% compared to the five year quarterly average. As with the city centre, Manchester accounts for a third of this, however take-up was also well above average in Bristol, Edinburgh, Glasgow and Liverpool. A key deal in this market was Balfour Beatty taking 43,568 sq ft at Maxim 7, Eurocentral, Glasgow.
Carl Potter, Senior Director and National Head of Offices at GVA comments: “Over the past six months there has been little movement in headline rents and rent free incentives, which continue to be supported by the relatively constrained development pipeline and the prospect of significant requirements, which bode well for a similarly robust performance in 2017.”
During 2016, take-up amounted to 8.7 million sq ft across the Big Nine city centre and out-of-town office markets, 3% above the five year average. Cardiff, Manchester, Bristol and Cardiff performed the strongest over the year when compared against the five year averages. Manchester continues to outperform, with take-up of 2.2 million sq ft across all city centre and out-of-town locations, while the latter two both recorded over a million sq ft.
Professional services sectors were the most active during 2016, making up 27% of all deals over 5,000 sq ft, while financial services made up 19%, with insurance and asset management being particularly strong. The recent strong growth seen in the TMT sector was not sustained during 2016, accounting for 10% of deals, compared to a five year average of 16%.
For more information on GVA’s latest Big Nine report, please contact Carl Potter at GVA on 0121 609 8388 or firstname.lastname@example.org.