£3.347 Billion Office Spend Outside Of London

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23 May 2019 | Updated 24 May 2019

The total investment volume and take-up of office space in 10 major cities across the UK in 2018 has been complied by commercial property specialists Savoy Stewart.

The firm analysed the latest findings from several regional city reports by Knight Frank. The 10 cities covered are Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle and Sheffield.

Take-up

Savoy Stewart found that Manchester experienced the greatest take-up of office space at 1,750,562 square feet in 2018. In comparison to the previous year (2017) – where office take-up was 1,218,892sq.ft – marking a significant 44% increase. 

Thereafter, Glasgow saw a take-up of 962,921sq.ft in office space - equating to a 52% rise from 2017, when office take-up was 633,710sq.ft. Birmingham followed, with an office space take-up of 755,137sq.ft.

Out of all the considered cities, Newcastle had the lowest take-up of offices at 236,928sq.ft. Despite this, the city still had a 33% surge from the year before (2017) – where office take-up was 177,870sq.ft. Slightly above was Sheffield, which had an office take-up of 363,584sq.ft in 2018.

Overall, 6,726,097 sq.ft is the grand figure, when totalling each of the ten cities 2018 office space take-up together.

Investment volumes

Manchester benefited from the highest office investment volume at £989 million in 2018. This represented an 8% increase from 2017, where the investment figure was £917 million.

Subsequently, Glasgow gained an investment volume of £468 million. This was a 3% rise from 2017, where office investment level was £453 million.

In third position was Leeds, with an office investment of £362 million – illustrating a hefty 185% increase from the year before (2017 = £127 million).

Contrastingly, Newcastle has the lowest office investment volume from the ten cities at £62 million. This though, was still a 24% rise from 2017 – where office investment amounted to £50 million.

Notably, Sheffield was one of the other cities which had a substantial year-on-year increase (180%) in office investment – from £54 million in 2017 to £151 million in 2018.

Collectively, £3.347 billion is the staggering sum, when totalling each of the ten cities 2018 office investment volumes together.

Offices - what's important?

Savoy Stewart also surveyed 436 office based businesses from a range of industries, that are all looking for new working premises this year to discover the factors (other than price) they are mainly focusing on in their search criteria. They ranked as follows:

1. Location (e.g. ease of access for employees/clients etc.) – 84%.
2. Current size (e.g. enough space to accommodate all employees, furniture, technology etc.) – 76%.
3. Legal considerations/added costs (e.g. lease flexibility, utility bills, contract complexity etc.) – 73%.
4. Infrastructure (e.g. reliable internet connection and telephone lines etc.) – 69%.
5. Availability of parking space (e.g. for employees, clients etc.) and local amenities (e.g. coffee shops, restaurants etc.) – 67%.
6. Future growth (e.g. simplicity of carrying out potential expansion and refurbishments etc.) – 58%.
7. Style/layout (e.g. does interior and exterior fit with desired brand image etc.) – 52%.
8. Presence of competitors in the area – 25%.

Darren Best, MD of Savoy Stewart, said: “Brexit is not entirely discouraging businesses from searching for and acquiring new office space. On the face of it, take-up and investment volumes in different cities outside of London indicates a strong and promising outlook for the office market. Though some cities scope for office space seems to be more active and resilient to economic pressures than others. Looking ahead, this research also provides a great insight into the primary factor’s businesses are putting high on their agenda when searching for office premises this year.”

Note

The office take-up statistics for Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Manchester and Newcastle is exclusive to office take-up in their respective city centre.

Savoy Stewart

Picture: Take-up of office space outside of London and investment in office space outside of London.

Article written by Brian Shillibeer | Published 23 May 2019

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