Market snapshot

Office Market Pulse Sheffield Q1 2013

Findings from our latest Sheffield Office Market Pulse show a marked uplift in occupier activity across both the city centre and out of town markets during the first quarter of 2013.

To download a print ready PDF version of the Sheffield Office Market Pulse, please click here.

In this issue:

Promising start to 2013 as take-up increases dramatically

After a slow final quarter in 2012, city centre take-up increased by 89% in Q1 2013 to reach 36,662 sq ft (Q4 2012: 19,379 sq ft). However, this figure was down by more than a third on the same quarter last year (Q1 2012: 57,490 sq ft).

Out of town, there was a dramatic uplift in activity, with a first quarter take-up of 23,480 sq ft - more than double the same period last year (Q1 2012: 10,450 sq ft). 

This brings the year-to-date total for the Sheffield office market to 60,142 sq ft, 11% down on the same period last year (Q1 2012: 67,940 sq ft) but more than double that recorded in the final quarter of 2012 (Q4 2012: 29,207 sq ft).

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

Significant occupational transactions in Q1 2013

Property Size Landlord(s)  Tenant
Arundel House, Furnival Gate 18,000 sq ft Roughlea Properties Sheffield Hallam University
The Mount, Glossop Road 10,000 sq ft Aviva Voice UK
722 Prince of Wales Road 7,000 sq ft 722 Limited PCT/NHS

Source: Lambert Smith Hampton

Existing Grade A supply remains stable, as occupiers consider location over quality

Total supply in the Sheffield office market currently stands at 811,976 sq ft, of which only one third is of Grade A quality. 

Despite this, grade A availability has been maintained, with all of the deals completed in Q1 2013 for grade B/C space.

Recent months have seen a trend for grade B/C space being converted to alternative uses, including re-development for residential and student accommodation, which will cause secondary stock levels to decline substantially in the next 6-12 months.

For a detailed breakdown of supply by grade, please click here or on Chart 2 to the left of this article.

Fall in out of town rental values

Prime city centre headline rents remain unchanged at circa £20 per sq ft. 

Conversely, out of town rents have fallen for the first time in nine months, from £14 per sq ft to £13 per sq ft. However, this figure remains higher than the same period last year.

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

Investment performance remains subdued

Investor appetite continued to be subdued in the final quarter of 2012, with little evidence of prime investment transactions.  

A lack of suitable stock combined with no rental growth, depreciating capital values and the increasing difficulty to finance a purchase are ultimately restricting investment in the region.

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

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Tom Burlaga

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Tom Burlaga
Associate Director - Agency

0114 270 2706

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