yorkshire region |
YORKSHIRE BECOMING THE DESTINATION OF CHOICE FOR THE CREATIVE INDUSTRIES W
hilst best known for its industrial past, Yorkshire now has a growing
reputation as a destination of choice for the creative sector, according to a brand-new report by global property consultancy Knight Frank. Knight Frank’s Yorkshire Office Market
Review 2017, issued today (Tuesday) revealed that last year, firms from the Technology, Media and Telecoms (TMT) sector based in the region contributed close to £4bn to the UK economy. The review was launched at Aspire in
Leeds to an audience of occupiers, investors and developers. The influx of digital firms to Yorkshire
now supports approximately 60,000 jobs, with the number of TMT firms in Leeds and Sheffield specifically rising by almost one third in the past five years alone. Eamon Fox, partner with Knight Frank in
Leeds and leader of the office agency team, commented: “From a property market perspective, the rise of the TMT sector is supporting demand for office space. In Sheffield and Leeds, TMT firms account for 20% – 25% of space let between January 2016 and March 2017. Well-known brands such as SkyBet, WANdisco, Rockstar Gaming and Plusnet all have offices in either Leeds or Sheffield. “However, the smaller, fast growth
companies have been most active with 27% of TMT deals across the two major cities below 5,000 sq.ft. “Furthermore, the tech umbrella is
broadening. Organisations whose principal business is not within the technology realm are taking space to support a growing digital arm. The emergence of ‘digital transformation teams’ is increasing aimed at aligning companies from traditional banking to the public sector with the digital age.
“Global and national firms such as Asda
Walmart, DLA Piper, Lloyds, BAE Systems and the NHS all have technology operations within the region. With both primary and secondary technology streams growing, office demand to support digitally-based activities will continue to rise in tandem, added Mr Fox. Other key trends identified in the
report were the changing face of the modern office, which has now become a significant means by which to attract and retain valued staff; the huge pool of talent in Yorkshire, nurtured by no less than 11 universities, which provide a solid foundation of students to support the future needs of business; and the quality of life offered by Yorkshire, where the combination of the relatively low cost of living, the superb transport links, the
COMMERCIAL PROPERTY MONTHLY 2017
excellent retail and leisure offering of the main cities and the beautiful countryside, is unbeatable. The report reveals that whilst the
creative sector is flourishing, the low supply of offices in Leeds and Sheffield is suppressing investment activity. Investment volumes remained on par with the long-term trend in 2016 reaching £175m by year-end.
rents will increase in Q2 2017 from £27.50 per sq.ft to £28 per sq.ft for prime Grade A space and up to £30 per sq.ft for exceptional space”. She added: “This movement re-
establishes the gap between good quality secondary and prime space, with rents on good quality secondary space having increased to £26 per sq.ft in recent months.”
Six Queen Street Henrie Westlake, head of investment at
Knight Frank in Yorkshire, explained: “A further £34.7m of office stock sold in the first quarter of 2017, consistent with the 10-year quarterly average. Although the recent level of investment suggests steady levels of activity, volumes have largely been suppressed by a lack of opportunity in the market, particularly prime assets. As such, secondary assets are gaining greater attention, predominantly where active management adds value. He added that overseas demand,
particularly for prime assets, remains strong in Leeds driven by a favourable exchange rate.
Meanwhile office deals in Yorkshire
have been hindered by political events during the past 12 months, according to Elizabeth Ridler, office agency partner at Knight Frank in Leeds. She commented: “However, Q2 2017
will represent a return to an upward trajectory. Analysis of deals already completed in Q2 indicates that take-up could reach 160,000 sq.ft for the quarter, 29% above the 10-year quarterly average. Significantly, around 750,000 sq.ft of active demand remains unfulfilled, the highest single total on record. This means that 2017 return take-up levels significantly above trend. “Rents are rising, too. The lease of
46,000 sq.ft at 6 Queen Street to a confidential FTSE 100 firm has established £30 per sq.ft as prime rent on new space. Supported by recent transactions, prime
In Sheffield, occupier activity increased
sharply in the first quarter of 2017 as several large transactions completed. Peter Whiteley, head of the Sheffield
office, said: “With 33 occupier deals completing, Q1 2017 recorded the city's highest level of occupier take-up for two years. A total of 170,000 sq.ft transacted during the first quarter, more than double the 10-year quarterly average for the city. “Prime city centre Grade A availability
fell to just 150,000 sq.ft in Q1 2017, the lowest level on record for the city. This total is 46% below the long-term average. However, a further 240,000 sq.ft of good quality city centre secondary space and Grade A on the city fringe space is available. “Forecasts indicate a prime rent of £24
per sq.ft by year-end rising to £25.00 per sq.ft by the end of 2018/2019.” In 2016, total investment volumes in
Sheffield increased fourfold to reach £83m by year-end, a total 60% above the 10-year average. This represented the highest level of office investment in Sheffield for six years. Investor interest has continued into 2017, as a result, the second quarter has seen £28m of stock sold across four deals, with a number of others imminent - this total is almost double the long-term quarterly average. Foreign investment accounted for the
largest percentage of turnover, 61%. The £68 million spent is the highest level of overseas investment into Sheffield offices on record.
87
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116
