Market snapshot

Office Market Pulse Newcastle Q1 2013

Findings from our latest Newcastle Office Market Pulse show that take-up reached 307,442 sq ft in Q1 2013 - a 48% increase on the same period of 2012 (207,075 sq ft). A sharp rise in occupier requirements is a positive indicator for improved annual transaction levels above 2012 figures.

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In this issue:

Newcastle office take-up doubles in Q1 2013

Total take-up of office space in Newcastle increased by more than 48% during the first quarter of 2013, reaching 307,442 sq ft.

City Centre take-up totalled 44,000 sq ft, with transactions for sub 4,000 sq ft floor plates continuing to dominate activity. However, three deals are due to complete above this size range in Q2.

The out of town office market performed particularly well with deals at the two major out of town business parks of Cobalt and Quorum adding to a first quarter total of 263,000 sq ft. This represents a 30% increase on the Q4 2012 out of town figure.   

With an increased number of requirements and a higher than average (five year) take-up in the first quarter of 2013, there is a feeling of cautious optimism that 2013 will see improved transaction levels above 2012 figures.

For a detailed breakdown of Newcastle office take-up by grade for Q1 2013, please click here or on Chart 1 to the left of this article.

Key Newcastle office lettings Q1 2013

Property  Size Landlord(s)  Tenant / Purchaser 
Lighthouse View, Seaham 73,000 sq ft Grantside Private Individual
Q6 Quorum Business Park 50,000 sq ft Quorum Syndicate NCFE
Q1 Quorum Business Park 26,000 sq ft Quorum Syndicate TDR
Baltic Place, Gateshead Quays 7,500 sq ft

Robertson Property /
City & Northern

Robertson Group
Commercial Union House, Pilgrim St

7,750 sq ft

Taras Properties Ltd Locus Plus

Source: Lambert Smith Hampton

Squeeze on grade A office space in Newcastle city centre

Total office availability in Newcastle city centre currently stands at circa 1.3m sq ft, of which just 19% comprises grade A specification. This equates to 2.75 years supply based on the 10-year average 

Conversely, almost 3m sq ft of vacant space is available within the out of town market, of which circa 1m sq ft is of grade A specification.

For a breakdown of Newcastle office supply by grade for Q1 2013, please click here or on Chart 2 to the left of this article.

Newcastle office rents remain unchanged

Headline rents remain unchanged at £21 per sq ft in the city centre and £16.50 per sq ft out of town.

Wellbar Central commands the highest rents in the city centre and Quorum Business Park the highest in the out of town market.

Prime incentives remain at two to three months per year term certain.

For a breakdown of Newcastle office rental values for Q1 2013, please click here or on Chart 3 to the left of this article.

Cautious return of office investment activity across Newcastle

Q1 2013 saw the cautious return of investor appetite across Newcastle’s office market, with a Jersey-based private property company’s acquisition of the long leasehold interest in Silver Fox Way from LPA Receivers for £4.2m. 

This follows a period of 12 months with no significant office investment activity.

To view our latest UK Investment Transactions (UKIT) report, please click here.

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