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.

The out-of-town market was more dominant than usual, accounting for 76% of all take-up for the year, although during Q4 the largest deal was in the city centre, 25,482 sq ft to NHS charity Rococo at I Carliol Square. Out-of-town there were five deals more than 5,000 sq ft, the largest of which was 15,241 sq ft to Essentra.

Immediate demand requirements look healthy for the year ahead, with Invest in Newcastle continuing to receive north shoring and reshoring interest from companies attracted to the city by the competitive low-cost base.

The city centre continues to be the focus for office development. The Lumen is letting well and The Spark - not due to complete until 2022 - is already seeing significant interest. As a result, with a lack of any ‘grey space’ returning to the market in the short-term, we expect vacancy levels to remain relatively low.

Looking further ahead, construction has started on Ask Real Estate’s 70,000 sq ft One Strawberry Lane, following forward funding from Canada Life, with the building already let to the Home Group on a 30-year lease. Elsewhere, Bank House on Pilgrim Street is under construction and due to complete in 2023.

TAKE UP Q4

City Centre

31,912 sq ft

Out of Town

63,540 sq ft

HEADLINE RENT

City Centre

£26 per sq ft

Out of Town

£16.95 per sq ft

UNDER CONSTRUCTION

Total

227,000 sq ft

Prelet

0%

PRIME YIELD

Q4 2020

6.25%

TOP FIVE DEALS Q4

KEY SECTOR ACTIVITY 2020

Business services

23%

Health and social care

20%

Utilities

16%


TAKE-UP

This report has been prepared by Avison Young for general information purposes only. Whilst Avison Young endeavours to ensure that the information in this report is correct it does not warrant completeness or accuracy. You should not rely on it without seeking professional advice. Avison Young assumes no responsibility for errors or omissions in this publication or other documents which are referenced by or linked to this report. To the maximum extent permitted by law and without limitation Avison Young excludes all representations, warranties and conditions relating to this report and the use of this report. All intellectual property rights are reserved and prior written permission is required from Avison Young to reproduce material contained in this report.