The Big Nine

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Key Office Take-up (sq ft) Glasgow Edinburgh City Centre take-up Q2 2016 City Centre 5yr quarterly ave Out-of-town take-up Q2 2016 Out-of-town 5yr quarterly ave Newcastle upon-Tyne Liverpool Manchester Leeds Birmingham Cardiff Bristol City Centre Q2 2016 Birmingham 217,295 188,852 Bristol 185,789 140,343 Cardiff 167,105 88,564 Edinburgh 105,139 151,247 Glasgow 161,527 147,322 Leeds 55,875 140,221 Liverpool 55,000 90,579 Manchester 220,587 256,156 Newcastle 53,962 52,445 5 year Quarterly Average Out of town Q2 2016 5 year Quarterly Average Birmingham 102,649 90,142 Bristol 60,603 72,912 Cardiff 34,777 29,458 Edinburgh 52,253 48,750 Glasgow 146,208 91,784 Leeds 72,303 86,860 Liverpool 19,760 43,835 Manchester 221,870 228,410 Newcastle 75,553 123,685
In focus: Cardiff Office demand remains strong in Cardiff city centre. The first half of 2016 has maintained the high level of take-up achieved in 2015, at a third above the five year average. The key deal in Q2 was to an undisclosed public sector occupier who took circa 55,000 sq ft over four floors at the refurbished Brunel House. This deal, which Bilfinger GVA acquired, leaves Cardiff city centre with a shortage of good quality grade B accommodation. Cardiff University took another significant deal of 29,000 sq ft at Friary House. There were also a number of notable out of town deals completed between 8,000 and 9,000 sq ft, in a market where transactions tend to be up to 4,000 sq ft. Immediately available grade A space in the city centre has increased recently to around 140,000 sq ft, from the very low level of the past two years. This is a result of a number of completions including One Central Square and 2 Capital Quarter, as well as the grade A refurbishment of 2 Kingsway. JR Smart has also started on site with the construction of circa 75,000 sq ft at 3 Capital Quarter. Based on the ten year average grade A take-up rate of 135,000 sq ft per annum, this equates to about a year’s existing grade A supply, although there are strong expressions of interest across the majority of it. There is also 7 months’ supply of speculative space under construction. Headline rents have increased markedly over the past 18 months rising from £21.50 to north of £24 psf, with rent frees falling from 21 to 15 months on a ten year term. This equates to a net effective rent of £21.60 psf. The outlook remains positive with a number of notable potential active requirements including Network Rail, PwC, Cardiff University and Lewis Silkin coupled with the on-going requirements for the new public sector Hub. Tom Merrifield Director, Cardiff Rents and Yields City centre headline rents Q2 2016 (£psf) Location Rents (£) Rent free (mths on ten yr term) Net effective rent* (£) Manchester 34.00 24 28.05 26.40 Edinburgh 32.00 18 28.00 27.13 Birmingham 32.00 24 26.40 23.25 Glasgow 30.00 21 25.50 25.08 Bristol 28.50 18 24.94 24.94 Leeds 26.50 18 23.19 23.85 Cardiff 24.00 15 21.60 19.13 Newcastle 21.50 9 20.43 18.28 Liverpool 21.50 33 16.13 16.28 Average 27.78 20.00 23.80 22.70 *Including rent free period less three month fit-out. Net effective rent (£) Q2 2015 Out-of-town headline rents Q2 2016 (£psf) Location Rents (£) Manchester (South) 20.00 Bristol 21.00 Birmingham (Solihull) 21.00 Leeds 18.00 Newcastle 16.95 Glasgow 16.50 Edinburgh 16.50 Cardiff 14.50 Liverpool 14.00 Average 17.61 Prime city centre yields Location Q1 2016 Q2 2016 End 2016 Birmingham 5.00 5.00 5.25 Bristol 5.25 5.25 5.50 Cardiff 5.75 5.75 6.00 Edinburgh 5.25 5.25 5.50 Glasgow 5.25 5.25 5.50 Leeds 5.25 5.25 5.50 Liverpool 6.00 6.00 6.25 Manchester 4.75 4.75 5.00 Newcastle 6.00 6.25 6.50
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