The office property market across Sheffield witnessed a ten-year high in 2017 according to leading property consultancy Commercial Property Partners LLP (CPP), with many new Grade A office property deals coming to fruition following significant levels of occupier interest.
The ‘exceptionally successful’ 2017 saw a 25 per cent increase in the number of deals completed compared to 2016, pushing overall figures to 390,302 sq ft for the year, well above the ten-year average.
Alongside this, additional transactions cemented the prime rent at an all-time high of £24.50 per sq ft, achieved by CPP at Acero, the Grade A Sheffield Digital Campus office development.
An award winning consultancy with offices in Yorkshire, the Midlands and London, CPP said that several key schemes contributed significantly to the success of Sheffield’s office market in 2017 – including 3 St Paul’s Space, Acero and Steel City House, all of which have experienced good levels of interest, resulting in an immediate shortage of Grade A office supply for 2018.
Rob Darrington, Partner at CPP’s Yorkshire office, commented: “Demand for city centre locations remained high throughout 2017, with 63 per cent of total office take up located within the centre. The most active market sectors within the city were the Professional Services and the Creative and Digital Sectors, which accounted for over half of all take up across Sheffield in 2017.
“Despite the political and economic uncertainties of 2017, many new Grade A developments came to market during the year, ensuring that the total availability of office space remained constant even with high levels of take up in the city.
“Following the well documented shock waves of Brexit, the triggering of Article 50 and the General Election, the 2017 office market was largely driven by demand from private sector, larger corporate occupiers who appeared to be futureproofing their occupation, whilst there was a window of opportunity for available supply to come to market,” adds Rob.
“General enquiries and take up from smaller occupiers reduced throughout 2017 which traditionally accounted for a significant amount of activity in the city. Although there is no single reason why smaller companies were not as active, one can only speculate that as they are more susceptible to economical change they remained cautious as to what lies ahead after the official Brexit date of March 29th 2018.”
Rob concludes: “As a result of the shortage in supply of Grade A office space, we are expecting interest from larger occupiers on a pre-let basis, with only a handful of sites able to cater for this demand.
“The 2018 office take up will be significantly bolstered by HSBC’s occupation of 140,000 sq ft within the new retail quarter development, which is due to complete towards the end of the year. With this large development in mind, I predict that this year will continue to exceed the long term average, despite the slow start.”