RESEARCH

The Big Nine

Quarterly update of regional office activity

Q4 2020

Two Chamberlain Square, Birmingham

DATA & ANALYSIS

Occupier data

Investment data

COMMENTARY

Charles Toogood

Principal and Managing Director, National Offices Team

OCCUPIER MARKET IN BRIEF

Total take-up across the Big Nine cities amounted to 5.6 million sq ft during 2020, which is 33% down on the ten-year average and compares to 6.2 million sq ft in 2009, the lowest annual figure following the Global Financial Crisis.

"During an unprecedented time of uncertainty for the office market, there were some encouraging signs of activity towards the end of the year. We have seen a number of pre-letting deals and on the supply side various speculative schemes across several cities have recently started onsite."

Mark Williams

Principal and Managing Director, Regional Investment

INVESTMENT MARKET IN BRIEF

Investment volumes across the Big Nine cities totalled £580 million during the final quarter of 2020, 2% up on the ten-year average and the busiest quarter of the year. However, with slower activity in the previous two quarters, the total for 2020 amounted to £1,501 billion, down 34% on the ten-year average.

"We expect sentiment to remain subdued for the first quarter of 2021 while tough lockdown restrictions remain, but once these are eased, we anticipate continued investment activity for prime city centre offices."

CITY ANALYSIS

Birmingham

Total office activity for 2020 amounted to 520,000 sq ft in the city centre and 172,000 sq ft out-of-town, 29% and 48% below their respective averages.

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Bristol

The occupier market has remained robust in Bristol during 2020 in comparison to other cities. Total activity for the city centre and out-of-town markets amounted to 775,000 sq ft, around 13% below the ten-year average in both markets.

Cardiff

The Cardiff office market received a significant boost during Q4 following Legal & General’s 121,256 sq ft pre-let at Interchange development at Central Square.

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Edinburgh

Total office take-up for 2020 was relatively robust following Baillie Gifford’s acquisition of 280,000 sq ft at Haymarket during Q3, although elsewhere, activity has been unsurprisingly scarce.

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Glasgow

In Glasgow, the strongest performance was in the out-of-town market during 2020 and this remained the case during Q4, as it accounted for the largest four deals, led by 29,500 sq ft to Spire at Skypark and 13,520 sq ft to Daisy Corporate Services at Hamilton International.

Leeds

There has been a subdued level of take-up activity in the Leeds office market during 2020 but there is encouraging news for the year ahead with two large pre-lets soon expected to complete and the largest speculative scheme across the regional cities recently underway at 244,000 sq ft 11 and 12 Wellington Place.

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Liverpool

Demand in the Liverpool office market remains active at the very small end of the market, but we do not expect it to pick up for the majority of medium to large size occupiers until at least the second half of 2021.

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Manchester

A number of key deals were signed in the Manchester office market during Q4, which brought a positive end to the year and a considerable improvement on the previous two quarters.

Newcastle

Newcastle saw robust office leasing volumes during 2020 given the economic backdrop, totalling 629,200 sq ft across the whole market, 8% below the ten-year average.

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