Recently in Regional research Category

The best and the worst of the regional office markets in Q1

By Stacey Meadwell on May 16, 2012 3:12 PM | No Comments | No TrackBacks
Knight Frank released its amusingly named ROMP report yesterday (that's Regional Office Market Presentation - just don't google ROMP on its own on your office computer - well maybe a colleagues) in which it compares and contrasts the market performance in 11 regional cities around the UK. 

One of the most interesting graphs within the report shows Q1 2012 take up vs the average quarterly take up for 2011 ie how well has each city done this year so far? Now you have to look at the figures in context but before we do that here is how the 11 cities rank in terms of take up in Q1 2012 vs its 2011 quarterly average:

  1. Leeds +50%
  2. Glasgow +32%
  3. Edinburgh +23%
  4. Manchester -5%
  5. Liverpool -11%
  6. Bristol -16%
  7. Sheffield -29%
  8. Cardiff -40%
  9. Aberdeen -165%
  10. Birmingham -209%
  11. Newcastle -376%
Now the context bit, Leeds had a good 2011 but it was its first year of increased take up since 2007 and the Q1 figure includes one particularly large deal of over 60,000 sq ft (Medical Protection Society's purchase of 2 & 3 Victoria Place). 

Glasgow and Edinburgh on the other hand, while having had storming starts to Q1 compared to everywhere else, actually didn't have great 2011 for office take up so they are coming from a lower base.

The flip side of that is Aberdeen which looks like it has had a terrible start to the year when in fact it had a phenomenal 2011 recording the highest average quarterly take up of all 11 cities and it still ranks the fifth highest take up for Q1 2012.

And then there is Newcastle, while there was a brief filip last year, office take up in the city actually peaked in 2004. Ouch.

Cambridge registers unprecedented office take-up

By Nadia Elghamry on February 1, 2012 2:25 PM | No Comments | No TrackBacks

happy sad.jpgCambridge's office take-up is at a new high says  Bidwells latest figures today (£). 

That's quite a statement and will have most agents around the country weeping into their coffee cups. 

But, and it's a big but, it is far from the whole story. On the one hand Bidwells are right to say it is an unprecedented amount of take-up, one that hasn't been seen in the city for years. But on the other hand the remarks are stretching the reality very thin. Cambridge's office market is really quite comfortable but it is far from stellar.

Just over 475, 000 sq ft of office space was signed for in 2011 up from 360,000 sq ft in 2010. Of that just four deals account for nearly 40% of the total. Packaged up in that are Microsoft's and Mills & Reeve's massive prelets, something few think will be repeated anytime soon. Ask around and most agents say last year was exceptional rather than an example of where the market's heading.     

One Cambridge agent said that they could think of around 100,000 sq ft of space waiting to land. For sure there is probably that much demand washing around, but how many of that is active, going to do something imminently or actually going to take a prelet rather than use their negotiations to squeeze their landlords. Demand, say many agents is a lot thinner than the figures would have you believe.

Bidwells say prelets will lead demand this year and will boost rents. Few other agents in the city are quite that bullish.

Picture by SashaW on Flickr

Guest post: Sunderland council hits back at Centre for Cities report

By Nadia Elghamry on January 24, 2012 2:25 PM | No Comments | No TrackBacks
Yesterday's post based on the Centre for Cities report has provoked an angry reaction from Sunderland. The local council leader has been in touch to says he takes exception to the report and has been contacted by several large and international companies that, he says, would feel the same way. Here's what he has to say about Centre for Cities:
 
scaled Leader with landscape model.jpg
Councillor Paul Watson is the leader of Sunderland City Council

"Centre for Cities has been producing its annual Outlook report for several years now and some of its statistics continue to put Sunderland towards the bottom of the pack.

That's not how it looks from here and there's little or no recognition of how things are actually going in the city.

During 2010 and 2011, two of the toughest years this country has faced for decades, we attracted significant new investment, cemented our reputation as the UK's automotive centre, were awarded an enterprise zone and secured funding to build the New Wear Crossing.

To be frank, we are not interested in being compared with London - we are more interested in ensuring we continue to secure the economic development necessary for the city to continue its growth.

In a report published jointly in October 2011 by Centre for Cities, Sunderland City Council and PWC Hidden potential: Supporting growth in Sunderland and similar cities, Centre for Cities concluded: "The strong growth of the private sectors of some of England's 'mid-tier' cities demonstrates the economic potential that they have".

This latest report reflects a moment in time and does not represent the considerable progress made across Sunderland in recent years.

We are continuing to help create new jobs, improve educational achievement, increase what are already record levels of investment and work towards further improvements."

Continue reading Guest post: Sunderland council hits back at Centre for Cities report.


Today's regional forecasts, tomorrow's fish paper?

By Nadia Elghamry on December 9, 2011 12:00 AM | No Comments | No TrackBacks
fish paper.jpgIt is forecasting season and while the rest of us are donning bad paper hats and telling awful jokes the researchers are busy beavering away, tinkering with the numbers for next year. 

In tomorrow's Estates Gazette magazine GVA has given us its version of how next year will look in every sector, in all the major cities. Cardiff offices is looking particularly poorly registering the biggest drop in average rents in the UK (there's a podcast with Savills' Gary Carver at the bottom of this article so keep scrolling to hear how one local agent feels about 2012. Clue: it's not great). London's West End has the healthiest headline rent growth.

It's an exercise we regularly ask GVA to perform for us and like all predictions it is scientifically calculated and well researched but ultimately is an educated guess. So how did it do with its best guesses last year.

Below are three graphs covering offices, retail and industrial. Hover over the bars to see actual values. And as you can see GVA actually did pretty well.

Big cheer for GVA who were brave enough to expose all and let us have a look at just how accurate they were at a time when others are struggling to understand a flitty market.


OFFICES

Continue reading Today's regional forecasts, tomorrow's fish paper?.


Next development hotspots in the UK revealed

By Nadia Elghamry on November 24, 2011 12:00 AM | No Comments | No TrackBacks
National Office Market 2011_Page_01.jpgWant to know where to develop for a return in the next couple of years? Or get a guaranteed end date for the recession? Wouldn't we all? Well, Lambert Smith Hampton think it has the answer and it says, now is the time to build (£).

Grade A stock is thin on the ground and getting thinner says the agents, and no more so than in Glasgow Bristol and Cardiff where the proportion of grade A availability is now below the UK average.

The firm's National Office market report was released today and it states that GDP levels are forecast to return to pre-recession levels by 2013. Demand for office space will increase returning to pre-slump levels in 2014 and the message is get building now. 

But you'd have to be brave with little rental growth forecast in the near future, especially if you're the South West, Wales or the Midlands - see below.

In Glasgow only 15% of total availability is grade A, the lowest of all regional centres with approaching half of all takeup (40%) this year for the best space. But it warns that occupiers were in the main taking advantage of competitive terms.

In Bristol the figure rises to 23% (or 500, 000 sq ft) while in Cardiff 16% of the space available is Grade A making them prime spots for investors and developers. Other surprises include the fact that Cambridge has the highest rents outside London.

The country is broken down by regions below and for a detailed analysis of the Midland market check out our Midlands property blog:

Continue reading Next development hotspots in the UK revealed.


DTZ research: UK sheds market take up dips but incentives harden

By Stacey Meadwell on November 9, 2011 10:48 AM | No Comments | No TrackBacks
3984413475_79fddc3df7.jpgHot off the press DTZ's industrial times report for Q3 shows a market reaching new low levels of take up overall but with supply also in decline incentives are hardening. The researchers behind the report predict no further drop in rents but no growth for the time being either. 

Here's a regional breakdown:

North West
  • Jump in take up in Q3
  • At current take up levels one year's grade A supply left
  • Increased appetite for land sales and design and build
London, South East & East
  • Busiest quarter so far this year but below long term average
  • Hardening incentives and anecdotal evidence of increasing appetite for D&B
  • Q4 take up expected to be strong
West Midlands
  • Take up down in Q3 and significantly below the long term average
  • Availability fallen below 25m sq ft for first time since Q4 2009
  • Grade A space scarce
Scotland
  • Take up dipped and dominated by second hand space
  • Q4 take up expected to pick up
  • Aberdeen market bucks the trends with pre-lets on the increase as grade A availability diminishes

Continue reading DTZ research: UK sheds market take up dips but incentives harden.


QPR tops Premier league for office costs - where's your team?

By Nadia Elghamry on November 8, 2011 10:58 AM | No Comments | No TrackBacks
qpr2.jpgEver fancied an office right by your club's grounds? A view of the pitch from your desk? Well if your a QPR fan you'll be paying through the nose. 

They might be fighting for survival on the pitch, says serviced office provider Officebroker.com but QPR are top of the league when it comes to the cost of serviced office space. Officebroker has been crunching the numbers to see which of the top clubs command the biggest office rents and has come up with its own premiership. 

Unsurprisingly the highest costs are in London, and QPRs top spot might have something to do with Westfield London and the BBC's presence. But let's let them enjoy their unusual victory for a little while longer. 

Outside London it's surprisingly Stoke that takes the regional top spot ahead of Manchester and Liverpool.

Figures are for one workstation per calender month

untitled.bmp
Picture from www.qpr.co.uk

Ireland investment weakens further but occupier demand picks up

By Nadia Elghamry on October 31, 2011 11:16 AM | No Comments | No TrackBacks
5057210527_b5d69ae811.jpg
Tomorrow CBRE will release its final Ireland bi-monthly performance report of the year.  

In a nutshell it says investment = very (very, very) bad. Occupiers = getting busier.

The report (a pdf is available at the bottom of this post) shows there's still paralysis in the investment market, largely due to the long-awaited a review of upward only rent reviews. Capital values are now a sickening 65% off peak values and only four - yes four! - investments transactions of note have signed in the Irish market to date in 2011.NAMA is now offering vendor financing on some assets which it calls "encouraging" but it's unlikely to significantly stimulate transactions activity.

It also warns about the London market. As the year end approaches the report says there is £5bn worth of property in London - with quite a few lot sizes over £100m. By contrast there's a scarcity of prime product in the West End. It says:

"This needs to be borne in mind by Irish investors who continue to be net sellers of real estate in the UK market."

More promisingly, it reports a "meaningful" level of activity in the occupier market. A number of transactions are in negotiations which will be signed by the year-end and it forecasts that 150,000 m2 will be signed for by year end in the Dublin offices market.

However, there's definitely a feeling of caution and if this is what recovery looks like then most who have been there and bought the t-shirt might want their money back.

The highlights for the first 9 months of the year are below:

Continue reading Ireland investment weakens further but occupier demand picks up.


PwC research: Where the job axe has fallen the hardest around the UK

By Stacey Meadwell on October 20, 2011 4:10 PM | No Comments | No TrackBacks
The real impact of public sector job losses across the UK is starting to emerge. Research by PwC up to the end of June shows that public sector job losses overall have been more severe than were first predicted with English local authorities the worst hit. The devolved administrations have fared better but with the likes of Scotland deferring the full quota of job cuts it is likely the full force of the axe is yet to fall.

Construction is one of the worse hit industries in terms of private job losses, a reduction in capital expenditure by the public sector has added to the pain already being felt by the property industry.

At the moment in % terms it is the South West and North East which have seen the biggest loss of public sector jobs. Here's how the job losses compare on a map of the UK (click on image for bigger version):

Job losses map.jpg


Related stories from around the local news websites:

National press and reports from earlier in the year

Where are the UK's regional cities in Cushman's European rankings?

By Nadia Elghamry on October 12, 2011 9:05 AM | No Comments | No TrackBacks
Cushman and Wakefield issued its European cities monitor today, the report that names the top cities in Europe by asking over 500 companies what they think.

Glaringly obvious is the lack of UK regional cities in the top ten. While Germany has three (Munich, Berlin and Frankfurt) and Spain has two (Madrid and Barcelona) London is the only UK city to make the grade. OK, so London is number one but what's happened to Birmingham and Manchester or the Welsh and Scottish capitals?

You have to track down to 16th place before Manchester appears (down 4 places on the previous year), Birmingham pops up at 18th with Leeds (28th), Glasgow (30th) and Edinburgh (31st).When the same research was done back in 1990 Manchester was at 13th place and Glasgow was at 10th, two decades of development and boom economics (although more recently bust) have actually hurt the city.

Travel to any regional city and the inward investment agencies, developers and local agents will be at pains to emphasise their cities competitiveness because of their cheap offices and abundant staff, their connectivity to the rest of the UK and Europe, their world class reputation. And yet, our regional cities continue to fail to make the grade in rankings like this which track occupiers opinion of just these things.

Cushman's also asked companies about their expansion plans, looking at how many companies were looking to set up offices in the next five years and where. The UK's results are below and speak for themselves. Click on the image to see a larger version of the map.

Thumbnail image for EDITED Cushman Wakefield's European Cities Monitor 2011 report_Page_18.jpg

Continue reading Where are the UK's regional cities in Cushman's European rankings? .


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