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
Regional Big Nine take-up reached 2.2 million sq ft in Q3 2024, 34% higher than the previous quarter and only 4% below the 10-year average. Five of the Big Nine markets witnessed an increase in take-up, compared to the same period in 2023, indicating a growing confidence in the market. A total of 427 deals were completed in Q3 2024, which on a rolling 12-month basis was only 6% lower.
Birmingham(+46%), Cardiff(+9%), Manchester(+8%), 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. Bristol and Cardiff were the only cities which saw increases to their prime rents this quarter, bringing the Big Nine average prime rental growth to 6.48%.
Notable deals in the City Centre market included BNY Mellon’s 196.443 sq ft lease at NOMA in Manchester, Aston University’s 189,053 sq ft lease at 10 Woodcock Street in Birmingham and ARM’s 68,860 sq ft lease at No.1 St Michael’s in Manchester. Notable Out of town deals included Spire Healthcare’s 30,783 sq ft lease at the Spectrum 7 in Newcastle, BNP Personal Finance’s 29,129 sq ft lease at AIR in Birmingham and NG Bailey’s 25,129 sq ft lease at the Arlington Business Centre in Leeds.
We expect take-up in Q4 to increase on take-up levels seen in Q3, and prime rental growth to remain elevated.
2024 Q3 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 increased by 104 basis points from the previous quarter to 9.3%, the highest figure so far in 2024. Edinburgh at 4.6% remains the tightest market in Q3, with 1.2% of Grade A supply. Glasgow(10.3%) and Birmingham(9%) remained the cities with the most availability overall, with a 2.6% and 2.3% grade A supply respectively.
Bristol (+213 bps) and Liverpool (+45 bps) have been the greatest increases in availability over the past 12 months, whilst Leeds (-271 bps) and Manchester (-191 bps) saw decreases.
AVAILABILITY BY CITY
Source: CoStar, Avison Young
Development pipeline
UNDER CONSTRUCTION PIPELINE (SQ FT)
Source: Avison Young
1,400,552 sq ft new and refurbished office space has completed so far in 2024. A total of 3.4m sq ft is due to complete by 2027 of which 50% 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), The Cresent (101,000 sq ft), and 3 Rivergate (75,000 sq ft) in Bristol. Cardiff (0.3%), Glasgow (0.5%) and Leeds (0.5%) have the tightest development pipeline.
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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