Businesses hoping to relocate to larger or higher specification office space in Newcastle should take action now to secure their future.
That is the cautionary advice of two prominent Newcastle office agents who say that a combination of limited levels of supply, together with strong demand for Grade A space, could soon lead to a dearth of availability.
With no new office developments likely to complete in Newcastle until 2027 at the earliest, organisations which need to expand, or aspire to relocate to higher quality offices in the city centre, could soon be left without any viable options.
Speaking at the launch of the newly refurbished 9th floor of Wellbar Central, Patrick Matheson, partner at Knight Frank, said: “Since the pandemic there has been a well-documented ‘flight to quality’ which has led to a significant volume of lettings involving newly developed offices or refurbished space. This year alone has seen over 86,450 sq. ft of Grade A lettings, accounting for 74% of all lettings.
“At Wellbar Central we are launching an 11,354 sq.ft space that has been refurbished to the latest environmental standards and is a perfect example of the sort of space which is in high demand. However, it is one of a very limited number of available options.”
The most recent new office development in Newcastle is Bank House at Pilgrim Street, which launched in June 2023. The 120,000 sq.ft building is already over 70% occupied following seven lettings to organisations including DAC Beachcroft, Lycetts, Barclays and Cundall.
Greg Davison, director at Savills, added: “Occupiers really need to be proactive given market conditions in Newcastle. Rents for Grade A space have risen by 14% over the last two years and as the availability falls, rents will only increase further.
“Whilst rental levels are undoubtedly important, having a number of viable options to consider is much more significant for occupiers. For any organisations in Newcastle with a lease expiry or break clause in the next two years, now is the time to get out and look at what’s available in the market to try and secure the best option.”
The launch of the 9th floor at Wellbar Central follows the completion of a comprehensive refurbishment of the 10-storey building at Gallowgate. The works have included an environmentally friendly upgrade to the reception, WCs, lift lobbies, as well as the installation of new shower facilities and an electric heating and cooling system.
This summer law firm Eversheds Sutherland announced that it was relocating to Wellbar Central after agreeing a lease on space within the 8th floor of the building. More recently, Irwin Mitchell and Kennedys Law have also committed to new leases at Wellbar Central.
