The amount of office space occupied in Sheffield during the second quarter of 2011 is predicted to reach 81,800 sq ft – an increase of almost 14,000 sq ft on the first quarter of the year and more than double that of the corresponding period for 2010.
Meanwhile, some property consultants are predicting good quality out of town units over 10,000 sq ft could be in short supply in the second half of the year, after strong take-up during the first six months
National commercial property consultancy Lambert Smith Hampton says office take-up is likely to be higher than long-term averages, while Knight Frank is predicting the shortage in out-of- town offices.
Rob Darrington, head of office agency at LSH Sheffield, said: “Sheffield’s office market has witnessed positive signs of growth over the first half of this year.
“Confidence has been undoubtedly buoyed by major lettings such as BSkyB’s acquisition of 23,577 sq ft at Ventana House in March, with major deals this quarter including a 38,000 sq ft letting to Sheffield Hallam University and 20,000 sq ft at Sheffield Business Park.”
LSH says a further 50,000 sq ft is due to complete the legal procedure within the next few weeks.
“If take-up is maintained at this rate throughout the remainder of the year, the annual figures will be closer to the levels witnessed pre-recession,” said Mr Darrington.
“However, existing supply is now heavily weighted towards secondary stock, which accounts for almost 70 per cent of total available office space in Sheffield. The diminishing availability of prime stock is expected to lead to the hardening of incentives and modest increases in prime rents in the near future, pointing to a shift in the balance of power between landlords and tenants.”
Knight Frank bases its prediction of out-of-town space on recent activity at Sheffield Business Park.
“Take-up in the second quarter was 32,776 sq ft for out of town and this does not even take into account South Yorkshire Police’s move to Carbrook which was agreed in July,” said Knight Frank associate Rebecca Schofield.
“Already 50,000 sq ft of out-of-town office accommodation is under offer or let for Quarter 3. This will leave no detached out-of-town units over 10,000 sq ft and will see the market reliant on development-led or multi-let opportunities only.”
Recent deals at Sheffield Business Park include a 10,000 sq ft letting to Excel Car Parking, a 6,000 sq ft sale to Selima Software and a 2,000 sq ft letting to Stafforce.
In addition, 16,000 sq ft of Unit W is currently under offer, while almost 95 per cent of the serviced office space at the business centre is occupied.