Owner occupiers seeing value in Sheffield's out-of-town office market
Research from national commercial property consultancy Lambert Smith Hampton (LSH) has highlighted that, although office demand across Sheffield remains subdued as a result of the EU Referendum, owner occupiers are seeing value in its out-of-town market.
The latest edition of the company’s Sheffield Office Market Pulse report, which provides its investor, developer and occupier clients with a detailed insight across the city, found that activity in the city centre improved in Q3 with a total of 17,750 sq ft. However, it was the out-of-town market that accounted for the lion’s share of take-up for the second quarter running, at 26,974 sq ft.
Total take-up across the city centre and out-of-town markets combined amounted to 44,724 sq ft – a 32 per cent increase on the previous quarter – but a fall of 50 per cent on the same period last year. Despite the slight increase in new lettings, office take-up in the region still remains below the five-year quarterly average.
Office supply across the city centre and out-of-town markets has remained constant during Q3. However, grade A supply in the city centre is expected to increase sharply in 2017 due to the completion of Sheffield Digital Campus and the £5 million refurbishment of Steel City House, which will inject over 180,000 sq ft of high-quality office accommodation. Out-of-town, the continued steady take-up and lack of new speculative development has caused a shortage of stock, with areas such as Meadowhall and Don Valley proving to be popular locations.
Tom Burlaga, Senior Surveyor at LSH Sheffield, said: “It is clear that we are seeing improvements in Sheffield’s office market following a difficult second quarter as a result of the EU Referendum. The out-of-town market has proved more popular, with owner occupiers taking advantage of depressed capital values, however, we are anticipating a stronger finish to the year in both markets, with occupiers making up for lost time.”