Demand for commercial office space in Sheffield remains remarkably strong, driving upward pressure on rental prices and increasing the demand for new commercial property developments, according to a new report.
Fresh figures reveal that office take up in the city for the first quarter of the year has totalled 170,000 sq ft – just over 30,000 sq ft less than for the whole of 2016 when office take-up reached 201,500 sq ft, although this was 36% below the ten-year average. In 2016, prime headline office rents remained unchanged at £23.00 per sq ft.
The report, compiled by Sheffield based commercial property agents Creative Sheffield, reveals that 35 firms relocated or moved into Sheffield during the first three months of this year with office space being snapped up in locations from newly built St Paul’s Place in the city centre to multi-million-pound refurbished project Meadowhall Business Park.
The Sheffield office of Knight Frank was responsible for the largest percentage of deals in the quarter – handling a third of the transactions and securing tenants and buyers for 56,650 sq ft of space.
Ben White at the Sheffield office of Knight Frank commented: “So far this year, moves have been occupier driven rather than inward investment.
“There was a blip last year following the first announcement about Brexit and then it was business as usual. There are currently over a dozen active enquiries for space over 10,000 sq ft.
“Following a shortage of high specification office accommodation there is now speculative development, such as Acero, the latest phase of the Digital Campus with 80,000 sq ft of Grade A space offering large and flexible floor plates. In addition is Steel City House offering 66,000 sq ft of Grade A office space in the Heart of the City, both ready for late 2017, which when added to existing well-appointed, city centre accommodation such as 3 St Paul's Place, Westfield House and The Balance, occupiers do have some choice.
“With supply of prime offices diminishing, we are now looking at rental growth in the office sector, which is positive news for investors and developers.”