Market snapshot

Office Market Pulse Sheffield Q4 2013

The Sheffield office market has improved significantly since the start of the economic recovery, with office leasing activity up by a third in 2013. Following CTP’s decision to forge ahead with 3 St Paul’s Place, the city’s first major speculative office development in more than five years, there is a general feeling of optimism that this positive trend will continue throughout 2014.

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In this issue:

Sheffield office leasing activity up by a third in 2013

There is a general feeling of optimism in the Sheffield office market, as the combined city centre and out of town annual take-up figure increased from 190,000 sq ft in 2012 to 255,000 sq ft in 2013 – a rise of more than 34%. 

The city centre had a steady finish to 2013, with Q4 take-up of 20,239 sq ft – broadly in line with the same quarter in the previous year. 

Lack of grade A supply remains a major constraint in terms of city centre leasing activity which, at 9,521 sq ft, accounts for less than half of the total quarterly take-up.

The out of town market witnessed somewhat of a resurgence in 2013, with 42,925 sq ft of space let or sold between October and December – quadruple that of the corresponding period in 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, Q4 2013

Property

Size (sq ft)

Landlord / Vendor Tenant / Purchaser
3 Europa View, Sheffield Business Park 

20,038

Unknown SIG Group
199 Newhall Road

11,792

Unknown Abtech
14-16 Matilda Street

8,942

Unknown Sheffield College

Source: Lambert Smith Hampton

3 St Paul's Place to provide welcome boost to grade A supply

Grade A office availability in Sheffield city centre reduced to 156,000 sq ft in the final quarter of 2013. However, the completion of 3 St Paul’s Place in the Heart of the City will release an additional 83,891 sq ft into the market, providing a welcome boost for occupiers, and will help satisfy a number of new requirements.

The absorption of a substantial amount of secondary space as a result of numerous student residential conversions could lead to further speculative development.

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

Positive signs for headline rents

City centre and out of town headline rents remain static at £20 per sq ft and £14 per sq ft respectively. Although, it is anticipated that the completion of 3 St Paul’s Place will have an upwards effect on these figures. 

Incentive packages remain fairly high but with a high proportion of supply likely to be absorbed in the coming months, either through occupation or conversion, these are expected to harden.

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

Commercial property investment emerges from recession

Our Q4 UK Investment Transactions (UKIT) report revealed that the UK commercial property sector had a stellar end to 2013, with investment at levels not seen since before the global financial crisis.  

However, there have been very few office investment transactions across Sheffield due to the lack of available stock.

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

Key investment transactions, Q4 2013

Property

Price

Yield

Vendor Purchaser
54-56 Fargate (office and retail)

£1.65m

11.6%

M&G Real Estate Private investor
Broadfields Business Park

£865,000

9.6%

JF Finnegan/Primesite Private investor

Source: Lambert Smith Hampton, UKIT Q4 2013 data

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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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