The office property market across Sheffield is on track for a strong second half year, with a wealth of new quality stock entering the market, and many postponed property decisions now coming to fruition in the post-General Election climate.
This outlook for the second half follows an ‘exceptionally successful’ first half which saw a 57% increase in the actual number of deals compared to Q2 2016. Alongside this, additional transactions cemented the prime rents at the all-time high of £23.50 per sq ft, according to leading property specialists Commercial Property Partners (CPP), with the second letting this year at 3 St Paul’s Place.
“The positive first quarter continued through the first half of the year, despite the political and economic uncertainties,” confirms Rob Darrington, Partner at CPP’s Sheffield office.
“Despite the well documented shock waves of Brexit, the triggering of Article 50 and the General Election, the take-up of buildings throughout Yorkshire in the first half of 2017 was significantly ahead of previous years, with experts within the industry predicting that Yorkshire will outperform London with regards growth in office jobs in the half year ahead,” confirms Rob.
“Indeed, Sheffield saw the total take up of office buildings, over 242,437sq ft, already higher than the confirmed total for 2016 which was 201,758 sq ft. It is expected that the total take up for the year will exceed the long term average of 305,000 sq ft, as we are already seeing signs that this upward trajectory will continue throughout the whole of 2017.”
According to CPP, a leading property consultancy with offices in Yorkshire and Nottinghamshire, two key schemes contributed significantly to the success of the region’s property market in the first half of 2017 – including the 20,000 sq ft letting to tech giant ARM Plc in City Gate, and the 8,940 sq ft letting to Kier at Thorncliffe Hall.
Whilst the total available office stock remains similar to the same period last year, this is largely due to the completion of the 80,000 sq ft office, Acero at Sheffield Digital Campus, adding to the region’s healthy supply of Grade A office stock, which it has lacked since pre-recession.
Rob continues: “This influx of Grade A supply is proof of the confidence in the market from both the Private Sector and Public Sector, and has assisted in the increase of the general rental tone for offices across the city.
“The most active sector in the market for the first half of 2017 was the Creative, Digital and Media Industry sector, accounting for 30% of the total take up. This is unsurprising following the report commissioned by the University of Sheffield and Creative Sheffield, which concluded that Sheffield’s digital sector is ‘on the cusp of something big’ as employment grows and turnover increases.”
The report consulted dozens of companies across the Sheffield City Region working in digital industries including digital design, video games and digital art.
It found that across the industry in Sheffield turnover was up by 47 per cent, one of the highest growth rates of any cluster in the UK and employment at digital business stands at over 21,000 employees.
Rob concludes: “The market dynamics suggest that the last half of 2017 will see an increase in activity as many postponed property decisions now come to fruition – as well as a number of looming lease events – triggering occupiers to consider their current position. Right now, there is a window of opportunity for occupiers to choose from, but this is limited and will not continue into much into 2018.”
