Newspaper article The Journal (Newcastle, England)

More Firms Looking for Out-of-Town Space to Set Up Business; MORE Companies Are Looking for Out- Of-Town Space at the Moment. North East Property Experts Take a Look at the Shift out of Town

Newspaper article The Journal (Newcastle, England)

More Firms Looking for Out-of-Town Space to Set Up Business; MORE Companies Are Looking for Out- Of-Town Space at the Moment. North East Property Experts Take a Look at the Shift out of Town

Article excerpt

GVA undertake a Big Nine quarterly review of the regional office occupier markets, comprising the nine largest cities in the UK and a bi-annual regional business parks review as part of their on-going market intelligence research work.

Key findings of the quarter one review show that prospects for the regional office markets have improved significantly since the end of 2011. The improved sentiment is encouraging occupiers with upcoming lease events to start their search whilst there is still quality of stock available.

City centre and out-of-town take-up in the nine GVA regional office centres recorded 1,61 million sq ft in quarter 1, 2% above the quarterly average. Traditionally Q1 is the lowest quarter of activity. The city centre market made up 59% of this total with 944,000 sq ft of deals, 7% below the quarterly average.

Out-of-town markets recorded take up of 666,000 sq ft, some 17% above the quarterly average. Birmingham, Bristol, Manchester and Newcastle all recorded over 100,000 sq ft of deals whereas there was little activity elsewhere.

The amount of office space under construction in UK business parks fell to its lowest level in the 16-year history of the research survey, and there has been an increase in availability over the past six months to the highest recorded in the same 16-year period. The survey found a total of 16.9 m sq ft of floor space immediately available at the end of 2011, a 4% increase on the previous six months.

Healthy take-up and the low level of completions over the past 6 months have outweighed by space being returned to the market.

The vacancy rate is at its highest ever level, increasing from 17.1% to 17.7% over the six months since the last survey. Whilst most regions have similar vacancy rates, the North East vacancy rate has been increased by the amount of space available at Cobalt Park, Quorum and at the East Durham former EZ sites at Seaham and Peterlee.

The table opposite shows a comparison of take-up figures on out-oftown business parks across the region and within Newcastle city centre over the last four quarters.

These figures are compiled and agreed quarterly by the leading office agents in the region.

The GVA research shows nationally out-of-town headline rents continued to decline in 2011. There have been some rent increases in the South East but headline rents have continued to decline over the past year. City centre rents in Newcastle have generally stayed unchanged and the low level of development pipeline remains a concern in terms of the future supply of new grade A office space in the city centre.

Tony Wordsworth, Director, National Markets - Offices, GVA ? WITH major UK-operated call centres looking to return to the UK, the North East is better placed than most regions to accommodate them. …

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