Market snapshot

Office Market Pulse Newcastle Q2 2013

Findings from our latest North East Office Market Pulse show a steep rise in demand for city centre office space, with take-up for Q2 2013 totalling 71,678 sq ft – an increase of 50% on the same quarter last year.

Download a PDF of our latest North East Office Market Pulse, or read and sign up to receive Office Market Pulses from other UK centres.

In this issue:

Demand for city centre office space on the rise

Total take-up of office space across the North East rose by 72% to 271,168 sq ft, compared with 157,593 sq in Q2 2012.

City Centre take-up reached 71,678 sq ft – an increase of 50% on the same quarter last year. However, demand remains driven by the second hand market, with grade A take-up comprising only 17,219 sq ft – consistent with the 17,500 sq ft transacted in Q2 2012.  

The out of town market remained the focus of occupier activity, with 199,490 sq ft of office space transacted– almost double that of Q2 2012.

For a detailed breakdown of north east office take-up by grade for Q2 2013, please click here or on Chart 1 to the left of this article.

Key North East office lettings Q2 2013

Property  Size Landlord / Vendor Tenant / Purchaser 
Wellbar Central

14,149 sq ft

Siddiqui Family BSkyB
Bede House

9,607 sq ft

Commercial Estates Group London & Country Mortgages
15 Quorum Business Park

10,500 sq ft

Cerberus Swiftpage
1 Earls Court

10,150 sq ft

Undisclosed

Hadrian Business Learning
Quadrant, Newburn

6,852 sq ft

UK Land Estates BAE Systems

Source: Lambert Smith Hampton

Welcome return of city centre office development

Q2 2013 saw the welcome return of city centre office development, with 35,000 sq ft of grade A office space due to be delivered at Silverlink’s Stephenson Quarter by 2015, following a funding deal with Newcastle City Council, Aviva and Royal Bank of Scotland.

Total grade A office availability across the North East is estimated to be in the region of 1.2m sq ft.  Approximately 1m sq ft of this space is located out of town at Cobalt and Quorum business parks, both of which are situated within the historic North Tyneside Enterprise Zone where developers benefitted from enhanced Capital Allowances.

For a breakdown of north east office supply by grade for Q2 2013, please click here or on Chart 2 to the left of this article.

Headline rents remain unchanged for second successive quarter

Newcastle city centre headline rents remain unchanged for the second successive quarter, at £21.00 per sq ft. However, only Wellbar Central on Gallowgate is capable of commanding this rental level

Out of town headline rents remain unchanged at £16.50 per sq ft.

For a breakdown of north east office rental values for Q2 2013, please click here or on Chart 3 to the left of this article.

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