Market snapshot

Office Market Pulse Sheffield Q2 2014

After a slow start to the year, office take-up in Sheffield saw a marked increase in Q2 2014. Take-up of city centre, grade A office space was up 83% on the corresponding period in 2013.

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In this issue:

Office take-up in Sheffield shows marked increase in Q2

After a slow start to the year, office take-up in Sheffield saw a marked increase in Q2 2014. Take-up of city centre, grade A office space was up 83% on the corresponding period in 2013 and out of town office space up 36%.

Enquiry levels remain strong, but a lack of grade A space remains an issue for city centre occupiers.

Out of town, there is a high demand in the freehold market for units between 3,000 – 7,000 sq ft as occupiers look to take advantage of good quality accommodation at attractive prices.

Progress at 3 St Paul's Place

Progress continues to be made at 3 St Paul’s Place which will provide over 80,000 sq ft of grade A space into the city centre once completed in Q3 2015.

There remains no other speculative development and secondary space continues to be looked at for conversion to student residential accommodation.

Supply of grade A stock within the city centre dropped by 24%.

Key occupational transactions Q2

Property 

Size (sq ft) 

Landlord(s)/ vendor

Tenant

1 St Paul’s Place 7,000 CTP Limited PWC
1 Waterside Court 10,000 Unknown Sheffield City Taxis
Milton House 40,000 Westfield Health
Source: Lambert Smith Hampton

Rents and incentives harden with little available supply

Rents and incentives for grade A space are beginning to harden with little available supply and prime headline rents have increased slightly to £21 per sq ft.

Rents for grade B space have increased steadily with good quality refurbished space commanding headline rents of £11 - £12 per sq ft. However, the lower quality grade B space remains in low demand with a number of smaller buildings being purchased for conversion to both student and private residential. This has been particularly prevalent in the Cathedral Quarter of the City Centre which has traditionally been the professional business district.

Low levels of investment activity due to a lack of stock

There was only one city centre office investment transaction in Q2 2014, which was the sale of The Mount on Glossop Road to a private investor for an undisclosed price. The property was let to the NHS and Voice Marketing.

The availability of suitable investment stock in the city centre remains low, which is why there has been very little recent activity. There remains investor appetite for the right type of property within Sheffield, with good property fundamentals key to this.

View our latest UK Investment Transactions (UKIT) report.

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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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