Market snapshot

Office Market Pulse Sheffield Q1 2016

Following a strong year of activity in 2015, take-up in the first quarter of 2016 was notably subdued. The Sheffield market remains dominated by small transactions, with 75% of Q1 2016's transactions being below 5,000 sq ft.

The recent completion of 3 St Paul's Place brings 76,000 sq ft of much needed grade A space to the market. Following growth in 2015, prime headline rents are expected to remain stable over the coming year. However, good quality grade B space is likely to see growth, reflecting a growing shortage of options in the market. 

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In this issue:

Out-of-town market shows signs of improvement

After a phenomenal end to 2015, leasing activity across the Sheffield office market slowed with take-up of only 42,694 sq ft across both the city centre and out of town markets. This represents a fall of 63% in comparison to Q1 2015 although the actual number of transactions is not too dissimilar, with 11 deals taking place in 2016 compared to 13 in 2015. 

While take-up in the city centre was down from 104,511 sq ft to 24,786 sq ft in comparison to the same period last year (which represents a fall of 76%), the out-of-town market has shown signs of improvement with 18,178 sq ft transacted in comparison to 11,166 sq ft, a rise of 63%. 

The deal at 3 St Paul’s Place of 15,986 sq ft to Arup, at a record rent of £23 per sq ft, was well documented having exchanged in 2015 although completion officially took place in March 2016 upon practical completion of the building, giving the take up figures a much needed boost. 

Grade A supply remains tight

Supply of grade B/C space in the city centre has increased by 16% as stock comes back to the market. As well as this influx, City Gate is now being fitted out by the landlord and Steel City House is undergoing refurbishment giving some good quality grade B options. There is still a lack of grade A space on the market with only 166,262 sq ft available. 

The completion of 3 St Paul’s Place gives the market a much needed boost and work has commenced on the next phase at Digital Campus where Acero Works and Vidrio House will bring 128,375 sq ft to the market although delivery will not be until 2017. 

Key occupational transactions, Q1 2016


Size (sq ft) 

Landlord(s)/ vendor


3 St Paul’s Place
The Moorfield Group
Search Recruitment
121 Matilda Street
River Don Properties
Countrywide (Blundells)

Source: Lambert Smith Hampton

Out-of-town rents set to rise

As the market improves we expect prime out of town rents to increase slightly to approximately £15 per sq ft over the course of 2016 as competition increases for space in the better quality buildings.

The £23 per sq ft set by Arup at 3 St Paul’s Place is not likely to be beaten however we feel the main growth area for city centre offices will be for good quality grade B space.

With the relatively slow start to the market we feel that rent free periods will remain at a similar level throughout 2016. 

Investors take advantage of regional variations in price

While the occupier market appears to have slowed, Sheffield’s investment market saw one of its strongest quarters on record in Q1 2016, with over £31.26m of assets transacted.

The surge in activity reflects attractively priced opportunities that are available for investors willing to take their performance from yield rather than depend on rental growth. However, good quality product remains in short supply.

Key investment transactions, Q1 2016


Value (£m) 

Yield (%) 



Riverside East
Arzan Wealth / Sidra Capital
Caudwell Properties
Crown House, West Bar
London & Scottish
LPA Receivers
Sheffield Business Park
Infinity Investments

Source: Lambert Smith Hampton 

Key occupational transactions, Q4 2015


Size (sq ft) 

Landlord(s)/ vendor


Leeds Dock
Allied London
One City West

Burford Group (on behalf of fixed charge receivers)
Cascade HR
1 City Walk
BMO Real Estate
Harrison Goddard Foote
21 Queen Street
Formal Investments
University of Leeds

Source: Lambert Smith Hampton

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