Market snapshot

Office Market Pulse Sheffield Q2 2017

Following a strong start to the year and despite uncertainty surrounding the election, Q2 2017 has seen a continuation of the solid take up with H1 2017 eclipsing the entire of 2016. While we anticipate a drop in grade B deals due to limited supply, the completion of new grade A space at Acero will provide a good opportunity for some larger transactions and should boost overall take-up to well in excess of the 10-year average of 320,000 sq ft.

The completion of Acero also provides some much needed larger floorplates to the market and this in turn will hopefully better place Sheffield to capture some of the regional office requirements and boost inward investment.

Sheffield’s bid to attract a new HQ for Channel 4 at the site adjacent to the train station could also provide significant inward investment as well as a knock on effect for related companies in TMT sector.

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In this issue:

Occupier take-up returns to near-normal levels

Office leasing activity across Sheffield reached 69,087 sq ft in Q2 2017, bringing it back in line with near normal levels after the dizzy heights of the previous two quarters, albeit still 75% ahead of the same period in 2016.

The city centre and out-of-town markets combined saw 38% fewer deals than the previous quarter and was dominated by churn deals of sub-5,000 sq ft.

Technology, Media and Telecoms (TMT) occupiers accounted for two of the largest deals; namely ARM’s 20,000 sq ft letting at CityGate and SkyBet’s acquisition of 4,000 sq ft at Montague House on the outskirts of the city centre.

Demand for secondary / refurbished buildings remains strong, as illustrated by the letting at CityGate, which is a long-term predominantly vacant building.

Sheffield’s bid to attract a new HQ for Channel 4 at the site adjacent to the train station could provide significant inward investment into the city as well as a positive knock on effect for related companies in the TMT sector.

Key occupational transactions, Q2 2017


Size (sq ft) 

Landlord(s)/ vendor


Tiger Developments
Thorncliffe Hall 
Mountcity Group
Waterside Court
Utility Alliance 

Source: Lambert Smith Hampton



Grade A supply falls below 100,000 sq ft

Grade A supply in the city centre continues to fall, with the letting of 20,000 sq ft at City Gate bringing the availability to 93,000 sq ft across six buildings. As such, those larger occupiers with as yet unsatisfied requirements have very few immediately available options.  

However, July will see the completion of Acero Works which will add 77,500 sq ft of grade A space into the market place, with Steel City House contributing further quality refurbished space in late Q3.

In addition, there are a number of proposed mixed use PRS and commercial schemes throughout the city centre and, while none will come to fruition this year, we anticipate significant new grade A stock to be released in 2018/2019.

Solid rental growth for grade B space

Prime headline rents remained stable during Q2 and are likely to do so throughout the remainder of 2017. However, the imminent completion of Acero Works at Digital Campus will provide an opportunity to see a marginal increase.

Rental growth remains solid in the high end grade B sector, where refurbished schemes have seen impressive levels of take-up.

Highest quarterly investment volume in a decade

Despite the uncertain economic backdrop, Q2 2017 was a record year in terms of office investment volumes across Sheffield, with a total of £43.4m invested in the sector; an increase of 623% compared with the same period a year ago and the highest quarterly investment volume since Q3 2006.

Strong competition for prime assets has lead to a compression of prime yields. However, these latest acquisitions demonstrate that there is still value to be found in the UK regions.

Key investment transactions, Q2 2017


Value (£m) 

Yield (%) 



2 Cutlers Gate 
20.2 5.0 UK CPT 

1 Nunnery Square
17.1 6.2 Bracknell Forest Council
DVS Property
Telegraph House, York Street
3.6 Unknown Tosca Commercial
Johnston Press 

Source: Lambert Smith Hampton

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Tom Burlaga
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0114 270 2706

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