According to Savills, zero speculative development and a lack of good quality space in the Peterborough office market has seen landlords invest heavily in refurbishing stock. Circa 100,000 sq ft (9,290 sq m) has been upgraded in the first half of 2017 in order to satisfy ongoing occupier demand.
Since Permitted Development Rights (PDR) was introduced in 2015, Savills calculates that more than 600,000 sq ft (55,741 sq m) of office space has been converted for residential use to date. This, coupled with a lack of development and strong occupier demand has led to a critical shortage of good quality office accommodation. For example, until recently, CEG’s Stuart House offered the only available Grade A space in Peterborough city centre.
As a result, landlords have invested significantly in improving the quality of existing stock in order to try and satisfy unfulfilled requirements from occupiers looking for premium space in the city. Notable examples include Stuart House, where on top of the new reception installed in 2016, the building now includes a cafe and gym which completed earlier this year. FI Real Estate Management has also invested £1.8m in the refurbishment of Northminster House, which now offers top quality office suites from 3,450 – 13,993 sq ft (3201 – 299 sq m), whilst the common areas and reception of Midgate House have also undergone works.
Savills anticipates that these newly refurbished buildings are likely to put upward pressure on existing rents, which currently stand at between £10 – 13 per sq ft (£140 – 183 per sq m).
William Rose, director in the business space team at Savills Peterborough, comments: “We have seen significant refurbishment activity in the Peterborough office market in the first half of 2017 as landlords look to take advantage of the critical shortage of good quality space available. As a result, we predict that following refurbishment works, landlords will be able to charge premium rents and encourage further office development in the city.”
