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Sheffield’s out-of-town office market offers ‘good value for money’

Despite the rather subdued state of the office market across Sheffield, offices located in the periphery of the city appear to currently offer good value for money, according to a new report.

Research from commercial property consultancy Lambert Smith Hampton (LSH) has highlighted that, although office demand across Sheffield has cooled in recent months, largely as a result of the EU referendum, owner-occupiers are seeing value in its out-of-town market.

The latest edition of the company’s Sheffield Office Market Pulse report, which provides its investor, developer and occupier clients with a detailed insight across the city, found that activity in the city centre improved in Q3 with a total of 17,750 sq ft. However, it was the out-of-town market that accounted for the lion’s share of take-up for the second quarter running, at 26,974 sq ft.

Total take-up across the city centre and out-of-town markets combined amounted to 44,724 sq ft., up 32% quarter-on-quarter, but represents a 50% fall compared with the corresponding period last year.

Office supply across the city centre and out-of-town markets has remained constant during Q3, but overall office take-up in the region remains below the five-year quarterly average.

However, LSH expects to see grade A office supply in the city centre increase sharply next year due to the completion of Sheffield Digital Campus and the £5m refurbishment of Steel City House, which will inject over 180,000 sq ft of high-quality office accommodation.

Out-of-town, the continued steady take-up and lack of new speculative development has caused a shortage of stock, with areas such as Meadowhall and Don Valley proving to be popular locations.

Tom Burlaga, senior surveyor at LSH Sheffield, commented: “It is clear that we are seeing improvements in Sheffield’s office market following a difficult second quarter as a result of the EU referendum.

“The out-of-town market has proved more popular, with owner-occupiers taking advantage of depressed capital values, however, we are anticipating a stronger finish to the year in both markets, with occupiers making up for lost time.”

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