Office rents in Sheffield have risen faster than in any other ‘Big Ten’ regional city over the past year, a new report has unveiled.
The report from CoStar Group – a major analytics provider in the commercial property world – has revealed that office rents in the UK’s rising cities (Cardiff, Liverpool, Newcastle and Sheffield) have been accelerating quicker than in the ‘Big Six’ regional cities (Birmingham, Leeds, Bristol, Edinburgh, Glasgow and Manchester) in recent quarters. Sheffield leads the way of all ten cities.
Due to the strengthening of fundamentals and a robust demand from the technology, media and telecom sectors, Ansys, Mindbody and Egress all signed new deals in Q4 2018. Top-end rents in Sheffield are now in the region of £25.00-26.00 per square foot. That is a strong 47% increase from the days of the global financial crash in 2008 and compared to the big regional cities at around 25% over this period.
There’s little doubt that Sheffield is a city on an upward trajectory. Much of this positive momentum can be credited to Sheffield City Council and the emergence of the Sheffield Property Association (S-PA). In recent years, the council have made ambitious and rewarding investments in high quality office developments such as 3 St Paul’s Place, a striking office building offering BREEAM Excellent-rated, Grade-A space, and the soon-to-be completed Grosvenor House, the new flagship office for HSBC that forms the first part of the Sheffield’s £470 million Heart of the City scheme. These prudent investments have, in turn, given confidence to private investors.
The S-PA represents the individuals and organisations in the city who share the collective aim of strengthening and enhancing the built environment in Sheffield. The S-PA works closely with both local and national government to provide advocacy, commission research and build networks to help drive development and attract investment to the city and its surrounding areas.
Guy Cooke, Director and Head of Agency at BNP Paribas Real Estate UK, and member of the S-PA, said: “The office market is in the best shape it has been for decades, the growth and investment prospects are evident. However, the market does urgently need more space to sustain the city and help attract inward investors. Most of the Grade A buildings are full, which is stimulating new development activity and we will see a return to pre-lets. “This positive trend also filters down to secondary buildings and encourages developers/landlords to re-invest in their properties, providing better value and choice for occupiers. Whilst rents have been rising, Sheffield still remains relatively affordable compared to the other big cities where prime rents are £32.00-35.00 per sq ft. A lower cost base and excellent demographics make Sheffield an attractive proposition to invest.”
Tim Bottrill, Director of colloco – a local commercial property agency and one of the founding members of the S-PA – explains why office rents are going up why this is important and helpful to the wider economy: “Top-end rents continuing to rise is a huge positive for Sheffield. “The opportunity for landlords to earn more provides a greater confidence in the city. It means commercial property developers are far more likely to build new office space speculatively, rather than relying on a tenant to commit to a long lease before submitting a planning application.”This in turn adds competition amongst developers and you’ll see the quality of office space step up significantly. All of this will make Sheffield far more attractive to some of the UK’s biggest companies. Small, medium and large businesses all benefit by having more choice.”