Considerable drop in take-up
Findings from our latest Sheffield Office Market Pulse show that take-up of city centre office space in Sheffield during Q4 2012 totalled 19,379 sq ft, a considerable drop compared to the same period last year (83,895 sq ft Q4 2011). The combined city centre and out of town figure fell by 46%, from 350,410 sq ft in 2011 to 189,889 sq ft 2012.
Commenting on the latest office report Rob Darrington, Head of Office Agency for LSH in Sheffield, said: “Although the take-up for 2012 has been low, looking forward there are a good number of key requirements for Grade A space in Sheffield, ranging from 10,000 to 50,000 sq ft promising a healthier take-up for 2013. The availability of Grade A space in Sheffield city centre remains low however with 180,000 sq ft of grade A space currently available.”
Average transaction size reduces
The average transaction size has reduced from 7,393 sq ft in 2011 to 3,600 sq ft in 2012. On a more positive spin, the actual number of transactions increased slightly and the actual net take-up level is approximately 38,290 sq ft which shows growth of 20% in the local office businesses.
Total city centre availability increased from 440,904 sq ft in Q4 2011 to 460, 704 sq ft in 2012 due to a number of large secondary office properties including Milton House being vacated. However just 21% of the available city centre accommodation is of Grade A quality, most of which is located in more peripheral locations.
Occupiers look elsewhere
Total supply in the Sheffield office market currently stands at 815,276 sq ft, of which 66% falls below Grade A. This, combined with the lack of new city centre development, has prompted occupiers to look elsewhere which is reflected in the fall in out of town availability which is down from 373,272 sq ft in 2011 to 354,572 in 2012.
Headline rents below national average
Headline rents in city centre remain below the national average of £33 per sq ft, with the highest recorded rent in the city centre remaining to be at Sheffield Digital Campus at £20 per sq ft.
The most significant occupational transaction during Q4 was the letting of 7,100 sq ft of space to Thompson Solicitors at the Synergy Building.
To view the full version of our latest Sheffield Office Market Pulse, please click here.