In a report entitled ‘The Big Nine: Regional Office Market Review’, the surveying firm analysed the latest deals agreed between landlords and tenants for city office space to rent.
In the 2nd quarter of 2011, the occupier take up of city office space in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle rose by 9% above the rolling quarterly average for the past three years.
Furthermore, with only a weak development pipeline of new business space to rent, this has led to a noticeable tightening in the supply of grade A office space to let in Bristol.
The GVA report also predicts that next year Manchester and the two leading Scottish cities of Edinburgh and Glasgow are all going to experience a shortfall in the supply of prime commercial property to rent. These conditions are likely to encourage further activity in the market for office rental property. Business occupiers already searching for grade A office premises to rent will be keen to secure pre-lets on the handful of new offices under construction.
Alternatively, expanding companies may prefer to rent serviced office space, in order to meet their immediate business requirements for high quality offices to let. Although, rental values have fallen marginally, GVA has predicted to that by next year rents will stabilise, with 2.5% growth forecast for 2013. This emerging trend will be welcomed by those property developers bold enough to have already started construction of major office schemes.
Developers such as HDG Mansur who has recently built the 110,000 sq ft Bridgewater House office building in Bristol and Edinburgh city council which is building 180,000 sq ft of speculative offices to complement extension of the lucrative Edinburgh International Conference Centre (EICC) which is due to be completed in 2012.