RESEARCH

The Big Nine

Quarterly update of regional office activity

Q2 2020

The Spark, Newcastle city centre

Data & Analysis

Occupier data

Investment data

Commentary

Charles Toogood

Principal and Managing Director, National Offices Team

OCCUPIER MARKET IN BRIEF

The lockdown has had a dramatic effect on office take-up across the Big Nine cities, with by far the lowest total since we started recording the data in 2009. This amounted to 329,000 sq ft in the city centre and 447,000 sq ft in the out-of-town markets, 75% and 42% below their respective ten-year quarterly averages.

"With current working arrangements, occupiers are uncertain over future space needs with some companies taking the opportunity to conduct a strategic review across their occupational estate."

Mark Williams

Principal and Managing Director, Regional Investment

INVESTMENT MARKET IN BRIEF

The slowdown in investment volumes continued into Q2 with just £151 million of transactions across the Big Nine cities, which compares to the quarterly average of £561 million.

"The post-Covid period will be a challenging time and there will be some pricing adjustments. However, appetite for long income deals remains."

City analysis

Birmingham

Activity remains very subdued in the Birmingham office market given the uncertainty around Covid. While many deals and requirements have been put on hold, occupiers are beginning to implement back to work strategies and reconsider their office needs.

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Bristol

Transaction volumes during Q2 were very low as expected, amounting to 53,000 sq ft in the city centre and 10,800 sq ft out-of-town. This compares to the ten-year total quarterly average of 230,000 sq ft.

Cardiff

There were eight deals in Cardiff in Q2 amounting to 31,000 sq ft of take-up, less than half the amount of the previous quarter. The majority of activity was in the city centre including the two largest deals – Starling Bank taking 14,000 sq ft at Brunel House and the estate agents Jeffrey Ross taking 9,900 sq ft at 11-13 Penhill Road.

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Edinburgh

The recent announcement of Baillie Gifford’s pre-let of 280,000 sq ft at M&G and QMile’s ‘The Haymarket’ scheme is welcome news after a subdued Q2.

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Glasgow

Activity in the Glasgow out-of-town market was one the highlights across the Big Nine this quarter. There were three circa 30,000 sq ft deals boosting take-up to 96,300 sq ft, 22% above the ten-year quarterly average.

Leeds

After a robust first quarter of 2020, take-up activity in Leeds fell greatly to 21,200 sq ft in Q2 2020 - far below the long-term average.

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Liverpool

Take-up in the city centre was circa 20,000 sq ft during Q2, with Taylor Wessing taking the largest deal of 12,700 sq ft at Edward Pavilion.

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Manchester

There was 209,000 sq ft of take-up in Manchester over Q2 2020. Of the 26 deals that transacted, five were over 10,000 sq ft and the two largest were in the out of town market. These were USDAW taking 38,900 sq ft at Voyager in an owner occupier sale of £12 million and Marlowe Fire & Security taking 25,568 sq ft at 5 Central Park.

Newcastle

Take-up in the Newcastle office market totalled an impressive 190,400 sq ft in Q2 2020 – 13% above the 10-year average.

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