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.”