Demand for office space to rent is rising within a number of the UK’s most significant regional markets, according to a new report.
The real estate consultancy giant CB Richard Ellis (CBRE) pointed to Aberdeen, Edinburgh and Leeds as three British cities in which demand has begun to swell considerably. However, the picture of circumstances within UK office space markets outside London is described as “divergent”, with a number of cities struggling for activity in a tough economic climate.
Despite the UK’s official return to recession in the first half of 2012, demand for prime office space in a number of regional cities has been growing in light of diminishing supplies, according to the CBRE report. A contributing factor is believed to be that a sizeable portion of Britain’s professional services and finance businesses are analysing their office space options ahead of lease expirations in 2014/15.
Birmingham and Bristol were singled out in CBRE’s latest Regional Offices Marketview report as being two cities that saw particularly restrained office space take-up in the first half of 2012. The turmoil in the euro zone was blamed for helping to create a notably more challenging environment throughout the country.
“Although cities throughout the UK are still experiencing the repercussions of widespread European uncertainty, there are certainly some indications that mature regional leasing markets are improving,” said Ashley Hancox, head of CBRE’s regional office agency.
“Sizeable deals in Southampton, Aberdeen and Leeds have been driven by pent-up occupier demand for the best quality space and we are aware of a number of major corporates who face lease expiries in the next two years,” he added.
The regional market highlighted as having seen the most impressive take-up activity in recent months was Edinburgh, where several large-scale commitments were secured earlier this year. Meanwhile, analysts suggest that Manchester looks to be the regional city best placed for strong performance in the second half of 2012 as “several large requirements come to fruition”.