Regional Grade A office deals taking longer to mobilise – GVA
In its quarterly review of major UK regional office markets, GVA says the out-of-town market is generally performing better than city-centre markets at the moment, but that this could change as larger deals complete towards the end of 2013. While there has been an increase in smaller secondary deals, larger, Grade A transactions are taking longer to complete, it notes.
Take-up of office space in the nine regional office centres monitored by GVA was 4% below the quarterly average in Q3 2012 at 1.52m sq ft. City-centre markets accounted for 60% of this total, with 903,000 sq ft of deals (10% below average), while out-of-town take-up, at 617,000 sq ft, was 7% above the average figure.
Office property in Leeds recorded the strongest take-up compared with average figures, while Birmingham, Bristol, Cardiff and Newcastle were also above average. The availability of Grade A office space fell across all cities and is currently 14% of total availability, compared with 28% in 2009.
There is a particular shortage of Grade A offices in Leeds city centre, GVA says, and developers there are not surprisingly showing interest in buildings where leases are coming to an end, with a view to refurbishment.
The lack of Grade A offices in Cardiff will be partly remedied by the 90,000 sq ft of space being developed by JR Smart in the Capital Quarter and due for completion at the end of 2013, GVA notes.
Meanwhile there has been a notable lack of deals involving Grade A offices in Manchester. GVA says that while this is partly due to the squeeze on available built Grade A property, it is also the case that larger deals are taking longer to mobilise – a number of deals in the pipeline are likely to complete before the end of the year, it notes.
