Market snapshot

Office Market Pulse Sheffield Q4 2012

Findings from our latest Sheffield Office Market Pulse show a dramatic fall in city centre occupier take-up in Q4 2012. However, with several major requirements in the pipeline indicate we expect to see a brighter 2013.

To download a print ready PDF version of the Sheffield Office Market Pulse, please click here.

In this issue:

Annual take-up levels record dramatic fall

After a strong start to the year, city centre take-up slowed considerably in Q4, reaching only 19,379 sq ft (Q4 2011: 83,895 sq ft).

The out of town market fared slightly better and remained in line with previous years, recording 9,828 sq ft in Q4 (Q4 2011: 6,462 sq ft).

These results mean that total annual take-up for the Sheffield office market stands at 189,889 sq ft, a fall of 46% against last year’s total (2011: 350,410 sq ft).

While the number of deals remained on par with the same period last year, smaller transactions dominated during Q4 2012, with only one letting in excess of 5,000 sq ft. This is a trend that has been evident throughout the year, with over 85% of City Centre lettings sub-5,000 sq ft. 

Looking forward, there are a good number of key requirements for grade A space ranging from 10,000 sq ft to 50,000 sq ft, promising a healthier take-up for 2013.

For a detailed breakdown of take-up by grade, click here or on Chart 1 to the left of this article.

Significant occupational transactions in Q4 2012

Property  Size Landlord (s)  Tenant / Purchaser 
Synergy Building 7,100 sq ft Quintain Estates & Development Thompson Solicitors
1st Floor, 15 Napier Street 3,916 sq ft Ark DM Venue Options
 3rd Floor, The Gateway 3,000sq ft  Evans Easyspace Maple Syrup Media 
Source: Lambert Smith Hampton

Two thirds of office supply below grade A quality

Total supply in the Sheffield office market currently stands at 815,276 sq ft, of which 66% falls below grade A. 

The lack of high quality space and new development within the city centre has prompted occupiers to look elsewhere, which is reflected by the fall in out of town supply from 373,272 sq ft in 2011 to 354,572 in 2012.  

Conversely, city centre availability increased from 440,904 sq ft in 2011 to 460,704 sq ft in 2012 owing to a number of large secondary office properties being vacated. Just 21% of the available city centre accommodation is of grade A quality, most of which is located in more peripheral locations.

For a detailed breakdown of supply by grade, please click here or on Chart 2 to the left of this article.

City centre rental values lag national average

National prime headline rents are in the region of £22 per sq ft. However, these are yet to be achieved in Sheffield. 

The highest recorded rent in the city centre was at Sheffield Digital Campus in 2010, at circa £20 per sq ft. 

Out of town rents currently stand at £12.00 per sq ft.

For a breakdown of rental figures, please click here or on Chart 3 to the left of this article. 

Investment performance remains subdued

Investor appetite continued to be subdued in the final quarter of 2012, with little evidence of prime investment transactions.  

A lack of suitable stock combined with no rental growth, depreciating capital values and the increasing difficulty to finance a purchase are ultimately restricting investment in the region.

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

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Tom Burlaga

0114 270 2706

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Tom Burlaga
Senior Surveyor - Agency

0114 270 2706

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