Figures on the city in north-east England from BNP Paribas Real Estate show a 54 per cent increase in office space take-up for the first nine months of the year compared with the same period in 2010.
Indeed, the scale of occupancy deals struck on offices in Newcastle in the first three quarters of 2011 exceeds that of the entire previous year. One of the more significant agreements reached recently saw the broadcaster BSkyB sign-up for 36,000 sq ft of city centre space.
BNP Paribas reports that there are only 110,000 sq ft of prime office space left on the market in central Newcastle.
“Occupiers looking for a competitive deal on city centre space should act now as we expect their window of opportunity to close shortly,” said the firm’s local office agency director Aidan Baker.
“Waiting could mean having to compromise on location, size and quality of space as well as the incentives.”
The property advisory firm’s report covered Newcastle’s out-of-town office market as well and take-up in that region has also increased sharply this year compared with last. However, there remains an oversupply of offices in sites surrounding what is the largest city in the north-east of England.
According to the report, Newcastle’s out-of-town market had roughly 1.7 million sq ft of Grade A office space available to rent at the end of September.
“This is not going to change in the short-term as developers continue to build new stock due to the excellent incentives still available in former Enterprise Zones,” Baker remarked.
Editor’s notes: The total office space take-up of space in Newcastle in 2022 totalled 239,410 square feet with headline rents reaching £28 per sqft per annum.
It was expected that prime office rents would reach £30 per square foot in 2023 at properties such as Bank House and the further development of high-quality space will push it to £32 per sqft in 2024.
One of the largest deals in 2022 was white shoe law firm Clifford Chance’s acquisition of 15,182 square feet at The Lumen.
Although this was overshadowed by HMRC’s pre-let commitment to 463,000 square feet at Pilgrim’s Quarter in 2021.
In Q1 of 2023, based on recent absorption rates, it was calculated that Newcastle had 1.3 years’ worth of supply left.
It was also found that Grade A space made up 53 power cent of Newcastle’s office space stock.