A 'Goldilocks Year' For Northern Powerhouse Office Market
After a year of too much space and uncertainty caused by Brexit, the Northern Powerhouse is chugging along juuuust right, according to research from commercial property consultancy Lambert Smith Hampton.
Take-up in the seven core Northern Powerhouse office markets combined is on course to finish at 4.1M SF, in line with the 10-year annual average but a 20% fall from 2015’s high.
The drop is largely attributable to the reduced volume of large headline deals to corporate occupiers; 80% of this year's transactions have been for less than 5k SF.
Uncertainty generated by the EU Referendum did not have an immediate effect on the region, with three of the total six deals above 50k SF—Freshfields, Manchester (81k SF); HSBC, Sheffield (140k SF); and LJMU, Liverpool (63k SF)—completing in Q3.
Professional services dominated activity in 2016, accounting for 31% of the total volume of space transacted, up from 26% in 2015. Activity from the technology, media and telecoms sector remained fairly consistent at 18%, down from 20% in 2015.
Grade A supply in the region has increased by 33% since the end of 2015, to 3.2M SF. This development activity remains focused in Manchester and Leeds, which together account for 90% of the 1.84M SF under construction—34% of which is already pre-let.
