Sheffield’s office sector set for prosperous year
SHEFFIELD is set to see the highest rise in office rents compared to regional cities throughout the UK according to a study.
Property consultants Knight Frank's latest Regional Office Market Presentation research (ROMP) shows the South Yorkshire city is performing well and is now a highly attractive financial proposition for companies seeking prime office space.
Having remained constant for 2006 and 2007, prime office rents in Sheffield are expected to rise this year by 14% to £21.00 per sq ft from £18.50 in 2007 given the ongoing strength of occupier demand for good quality office space.
Aberdeen is the only other regional city forecast to match Sheffield's performance.
Rental growth is also expected to increase during 2008 reflecting the continued buoyancy of the regional office occupational markets.
All 11 of the UK's key regional markets, including Sheffield, saw above average take up during 2007. Schemes like Heart of the City, Riverside Exchange and Northbank in Sheffield are proving attractive to high profile companies.
Peter Whiteley, partner at Knight Frank's Sheffield office, said: “Sheffield is still benefiting from huge improvements in quality and a desire to go for greener buildings – albeit the more expensive option – which is pushing values and attracting occupiers at the same time.”
Both Manchester and Birmingham broke through the £30.00 per sq ft barrier during 2007, with the latter now commanding the highest prime office rent (of £32.50 per sq ft) outside the South East. Manchester is set to overtake Birmingham by the end of 2008 with its prime office rent forecast to reach £34.00 per sq ft.
Claire Higgins, head of commercial research, Knight Frank said: “There has been a lot of talk of the changing fortunes of commercial property, with yields moving out and prices falling. What's interesting is that it reflects a reversal in both investment and occupational sentiment, coming at a time when office rents have been rising and are expected to continue to do so. The end of the bull run on office investment has hit just as the occupational market is becoming extremely buoyant, as evidenced by our expectations for Sheffield.”
