Market snapshot

Office Market Pulse Sheffield Q4 2016

Following a subdued 12 months with a limited number of transactions, the Sheffield office market rebounded in Q4 2016; largely as a result of the significant deal agreed with HSBC for 140,000 sq ft of new office space in the proposed retail quarter.

While take-up during 2016 was predominantly dominated by the out-of-town market, Q4 saw a large number of transactions for office space in the city centre, with long term vacant offices such as CityGate and Synergy finally securing tenants.

The majority of existing deals are churn transactions and we anticipate the completion of new, high quality office accommodation in 2017 will be a catalyst for further inward investment.

Want to know more about the Northern Powerhouse office markets? Download this Office Pulse in fullview our latest research report or open our app.

In this issue:

Office take-up rebounds in Q4 2016

Following a subdued 12 months with a limited number of transactions, the Sheffield office market rebounded in Q4 2016; largely as a result of the significant deal agreed with HSBC for 140,000 sq ft of new office space in the proposed retail quarter.

While take-up during 2016 was predominantly dominated by the out-of-town market, Q4 saw a large number of transactions for office space in the city centre, with long term vacant offices such as CityGate and Synergy finally securing tenants.

The majority of existing deals are churn transactions and we anticipate the completion of new, high quality office accommodation in 2017 will be a catalyst for further inward investment.

Key occupational transactions, Q4 2016


Property 

Size (sq ft) 

Landlord(s)/ vendor

Tenant/purchaser

Grosvenor Hotel Site
140,000
Sheffield City Council
HSBC
Wards Exchange
8,775
Finnegans
Utilita
CityGate
7,841
Tiger Developments
Zoo Digital 

Source: Lambert Smith Hampton

HSBC deal to kick start retail quarter development

At c. 549,000 sq ft, total office supply remained relatively constant throughout 2016.

However, 2017 will see a sharp increase in grade A space following the completion of Digital Campus, meanwhile 60,000 sq ft of refurbished office space at Steel City House will increase grade B supply.

HSBC’s letting at the former Grosvenor Hotel site will also hopefully kick start development at the new retail quarter.

Digital Campus could push up headline rents

Prime headline rents for grade A space remain stable. However, with the completion of Digital Campus due in 2017, there is scope for a marginal increase.

We anticipate further rental growth and the hardening of incentives in the out of town market as a direct result of little speculative development.

Office investment activity falls back during Q4 2016

There was a sharp fall in office investment transactions across Sheffield during Q4 2016, reflecting the lack of prime stock being brought to the market.

While the ongoing Brexit negotiations will no doubt create uncertainty for some, it is also likely to open up opportunities to a wider investor base. As a result, we anticipate renewed activity during the first half of 2017.


Want more information about this Snapshot?

Tom Burlaga

0114 270 2706

Email me

Contact us now

Tom Burlaga
Senior Surveyor - Agency

0114 270 2706

How can we help?

Submit