Market snapshot

Office Market Pulse Newcastle Q4 2013

The Newcastle office market made a strong recovery in 2013, with total take-up across both the city centre and out of town markets reaching just over 1m sq ft. As grade A availability in the city centre continues to fall, occupiers will be forced to consider secondary or refurbished grade B space, which will impact on the overall take-up levels.

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In this issue:

Newcastle’s office leasing activity exceeds 1m sq ft in 2013

The Newcastle office market made a strong recovery in 2013. Total take-up of office space across both the city centre and out of town markets for the year stood at just over 1m sq ft - 37% above the 2012 figure of 750,541 sq ft.  

Take-up levels in the city centre during Q4 2013 were 70,779 sq ft, a sharp increase on the Q4 2012 figure of 13,332 sq ft. Over 67% of the space transacted was for grade A accommodation, assisted somewhat by the 34,845 sq ft letting at East Quay 5 to Barclays Bank.

Activity in the out of town office market returned to near average levels in the final quarter of 2013 following a sluggish Q3, with 188,203 sq ft of space transacted – an increase of 3.5% on the corresponding period in 2012.  This was due in part to Newcastle NHS Trust’s purchase of Regent Point – a 99,899 sq ft office building in Gosforth.

For a detailed breakdown of Q4 2013 take-up by grade, please click here or on Chart 1 to the left of this article.

Key office lettings, Q4 2013


Size (sq ft)

Landlord / Vendor  Tenant / Purchaser 
Regent Point, Regent Centre, Gosforth (Freehold)


Appointed Receivers, CBRE Newcastle NHS Trust
East Quay 5, St Annes Street


Seghal Family Barclays Bank
Q6 Quorum Business Park


NCFE British Engines
Holland Park, Holland Drive


Private Landlord Integral
First Floor, Alexander House, Rainton Bridge


Goodman EDF Energy

Source: Lambert Smith Hampton

Occupiers forced to consider lesser quality space as grade A supply continues to fall

Total office availability in Newcastle city centre currently sits at just over 1m sq ft, of which only 16% is grade A quality. With Silverlink’s Stephenson Quarter and Science Central’s ‘The Core’ the only new developments due to be delivered this year, grade A availability will continue to tighten. As such, occupiers will be forced to consider secondary or refurbished grade B space.

Conversely, the out of town market remains well supplied, with over 930,000 sq ft of grade A office space immediately available.

For a breakdown of Q4 2013 office supply by grade, please click here or on Chart 2 to the left of this article.

Increasing leasing activity drives up prime city centre headline rents

As a result of increased demand, city centre office rents have shown signs of stabilising and incentives have fallen for the first time in five years. 

Prime city centre headline rents as at Q4 2013 sat at £21.50 per sq ft – an increase of 5% on the corresponding period in the preceding year. This figure is expected to strengthen further throughout 2014. 

This is in contrast to the out of town market, where prime headline rents for grade A space currently sit at £16.25 per sq ft, slightly down on Q3 2013 primarily due to the availability of grade A space and the deals required to attract new occupiers.

City centre incentive levels are now typically 12 months on a five year term reduced by six months from the start of 2014, however out of town remains at 18 months upwards.

For a breakdown of Q4 2013 office rental values, 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. 

What does this mean for the market? Find out in UKIT Q4 2013.

Key investment transactions, Q4 2013




Vendor Purchaser
Time Central, Gallowgate



Credit Suisse Asset Management Orchard Street Investment Management
Unit 13A Cobalt Business Park



Private syndicate Highbridge Properties

Source: Lambert Smith Hampton, UKIT Q4 2013 data


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