Market snapshot

Office Market Pulse Sheffield Q2 2013

The Sheffield office market has had a strong H1 2013, with the number of lettings up 60% on Q2 2012, and the half yearly total in line with longer-term average levels.

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In this issue:

Volume of Sheffield office lettings increases

The Sheffield office market continued to perform well into the second quarter of 2013, with the total number of lettings up 60% on Q2 2012 at 15, and the half yearly total in line with longer-term average levels.

At 52,557 sq ft, Q2 2013 take-up was down 11% on Q1 2013, when the level was boosted by Sheffield Hallam University’s 18,000 sq ft purchase at Roughlea Properties Arundel House. 

Despite this, optimism remains high, with total take-up reaching 112,209 sq ft - 60% of the total take-up for 2012.

Occupiers are focusing their requirements towards the city centre, with a 77% increase in demand compared with Q2 2012.

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

Key occupational transactions, Q2 2013

Property Size (sq ft) Landlord / Vendor Tenant / Purchaser
Europa Link, Sheffield Business Park  8,760 SWIP Excel Parking
The Square, Castlegate  6,850  Carillion Ark Healthcare
Synergy Building, S1  6,052 Quintain Estates & Development Lupton Fawcett, Lee & Priestley Solicitors

Source: Lambert Smith Hampton

Pre-lets come to market in Sheffield city centre

Despite an influx of secondary office space causing general supply levels to increase by 2%, the Sheffield office market continues to be blighted by a diminishing supply of grade A/B stock, with availability down some 5% compared to Q2 2012.

More positively, the next phase of Sheffield Digital Campus is now available on a pre-let basis, as well as Building 3 St Paul’s Place.

For a breakdown of rental figures, please click here or on Chart 2 to the left of this article. 

Gap widens between prime and secondary rents

Sheffield city centre headline rents remain unchanged at £20.00 per sq ft. 

The gap between prime and secondary offices continues to widen, as secondary rental values decrease further.

For a detailed breakdown of supply by grade, please click here or on Chart 3 to the left of this article.

Investment activity in Sheffield remains muted, but sentiment is improving

While 2013 has brought about a resurgence of interest from investors in some key regional office markets, the lack of good quality product across Sheffield means this is yet to filter through. Q2 was particularly slow, with only Delta Properties acquisition of Aspect Court, Pond Hill for £3.1m hitting the headlines.

That said, with sectors of the London market now viewed as ‘overheated’, we anticipate growing interest in the coming months.

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

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Tom Burlaga

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Tom Burlaga
Senior Surveyor - Agency

0114 270 2706

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