Savills reports best quarterly take-up across Big 6 regional office markets
The Big 6 regional office markets of Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester reported combined take-up of just over 1 million sq ft in Q3 2022, a 23% increase on Q2 2022, making it the best quarterly take-up this year according to Savills.
Across the Big 6 markets, Edinburgh reported the largest increase in take-up with a 138% increase on Q2 2022. Birmingham, Manchester and Leeds also reported quarterly increases in take-up at 61%, 29% and 7% respectively. This resulted in all four office markets reporting their best quarterly take-up this year.
Savills goes on to report that rental values within the regional markets also continue to show resilience, with Bristol achieving a rental growth of 11.8% so far in 2022, with headline rents for the city reaching £42.50 per sq ft. In addition, the prime rent for Leeds rose to £36 per sq ft in Q3, up from £34 earlier in the year.
The robust performance of rental values can be attributed to declining supply across the regional markets, reports Savills. Issues surrounding the viability of developing new office space, owing to rising build and labour costs, means that demand for existing office space will remain competitive.
James Evans, head of national office agency at Savills, said: “In spite of challenging economic metrics, the office occupational market is showing continued resilience in the regional markets. We have seen very limited evidence of leasing transactions aborting or indeed negative impact on headline rents.
“The forthcoming Autumn Statement and its ability to provide confidence to business leaders will have a significant impact on occupational demand as we head in to 2024. Supply side constraints will come into sharper focus as development viability is increasingly marginal. Those that sit on the fence too long are likely to find there are increasingly fewer opportunities to relocate to sustainable, contemporary accommodation.”