National occupier outlook
Take-up
TOTAL TAKE-UP IN QUARTER (SQ FT)
CHANGE ON LAST QUARTER
CHANGE ON 10 YR QUARTERLY AVG
TAKE-UP (SQ FT)
Source: Avison Young
ANNUAL TAKE-UP
Source: Avison Young
With a total 1.63m sq ft transacted, Q2 was a reasonably healthy quarter across the Big Nine, with take-up volumes 16% below typical levels. A total of 452 deals completed in Q2, which on a rolling 12-month basis was 11% below.
Bristol (+9%) and Manchester (+2%) all saw above-average take-up this quarter compared to the 10 year average. Best-in-class space remains in high demand and short supply across the Big Nine city centres, which continue to drive record levels of rental growth. Birmingham, Bristol, Leeds, Liverpool and Manchester all saw increases to their prime rents this quarter, bringing the Big Nine average prime rental growth to an unprecedented level of 7.77%.
Notable deals of Q2 included the Cubo’s 59,431 sq ft lease at No.1 Spinningfields’s in Manchester, National Highways’ 58,697 sq ft lease at Three Snowhill in Birmingham, and Leeds Teaching Hospitals NHS Trust’s 43,731 sq ft lease. Notable out of town deals included Sirona Care & Health’s 20,420 sq ft lease at South Glos Council Offices, Yate in Bristol and STAC’s 19,463 sq ft lease at Skypark 1 in Glasgow and Citibase’s 19,328 sq ft lease at the Aztec Centre in Bristol.
We expect take-up in Q3 to increase on take-up levels seen in Q2, and prime rental growth to remain elevated.
2024 Q2 TAKE-UP BY CITY
Source: Avison Young
NOTABLE DEALS – CITY CENTRE
Source: Avison Young
NOTABLE DEALS – OUT OF TOWN
Source: Avison Young
HEADLINE RENTS
Source: Avison Young
TAKE-UP BY SECTOR
Source: Avison Young
RENTAL GROWTH
Source: Avison Young
Vacancy
VACANCY RATE
CHANGE ON LAST QUARTER
CHANGE ON LAST YEAR
AVAILABILITY (SQ FT)
Source: CoStar, Avison Young
The Big Nine’s total availability rate fell by 83 basis points in Q2 to 8.2%. Edinburgh at 4.8% remains Big Nine’s tightest market in Q2, with 1.1% of Grade A supply. Glasgow (10.1%) and Birmingham (9.1%) remained the cities with the most availability overall, with a 2.3% and 2.4% grade A supply respectively.
Newcastle(+227 bps) and Bristol(+219 bps) have been the greatest increases in availability over the past 12 months, whilst Manchester (-171 bps) and Birmingham (-120 bps) saw decreases.
AVAILABILITY BY CITY
Source: CoStar, Avison Young
Development pipeline
UNDER CONSTRUCTION PIPELINE (SQ FT)
Source: Avison Young
642,275 sq ft new and refurbished office space has completed so far in 2024. A total of 3.9 m sq ft is due to complete by 2026 of which 29% is pre-let.
The schemes with the most speculative space due to complete over the next six months include The Welcome Building (162,804 sq ft), No 1 St Michael’s in Manchester (139,966 sq ft), and 19 Cornwall Street in Birmingham (134,000 sq ft). Newcastle and Liverpool have the tightest development pipeline, with their total available space equivalent to 0.2% and 0.4% of their total stock respectively.
Developers remain cautious with borrowing and construction costs still elevated and yields and voids increasing, which will restrict badly needed high-quality supply across regional markets in the coming years. Based on schemes currently under construction, we expect to see supply shortages in 2025 which will place additional pressure on prime rents.
DEVELOPMENT PIPELINE (SQ FT)
Source: Glenigan, Property Market Analysis, Avison Young
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