Occupier and investor confidence across the Northern Powerhouse office markets is riding high, according to The Northern Powerhouse Office Market Report 2015/16, published by Lambert Smith Hampton (LSH).
The report shows strong performance across the eight key markets – with combined take-up expected to reach 5.2m sq ft by the end of the year – illustrating that occupier confidence in the region is riding high.
Manchester city centre is undeniably leading the way and is on track for a record year, with almost 1.4m sq ft of office space expected to be let or sold – well above the 10-year annual average of 966,000 sq ft.
The picture is also extremely positive in Leeds, Newcastle and Sheffield, with only Liverpool predicted to see activity fall short (albeit marginally) of its annual average in 2015.
Tony Fisher, National Head of Office Agency at LSH, said: “The office market across the Northern Powerhouse is undoubtedly in a strong position. Confidence is high and the best performing cities are benefiting from strong demand. Both in the traditionally dominant sectors of finance and professional services, as well as emerging sectors like Technology, Media and Telecommunications (TMT).
“With a rise in the number of London-based companies looking to rebalance their regional operations, largely to avoid the rising costs of the Capital, it bodes well for sustaining the Northern Powerhouse initiative in the coming months and years.”
The five core Northern Powerhouse cities of Leeds, Liverpool, Manchester, Newcastle and Sheffield saw over £1bn of office assets change hands from Q1 to Q3 in 2015, and the figure looks set to run close to 2014’s £1.42bn record.
As well as analysing the region’s office market, the report looks at the importance of investing in the region’s transport infrastructure, the changing workforce and how the Northern Powerhouse can take advantage of the region’s highly-skilled talent pool and relative cost effectiveness in comparison to London to forge new global centres of excellence.
The region’s track record in fostering high-tech, high growth Knowledge Intensive Business Services clusters – such as MediaCity in Salford and the Advanced Manufacturing Park in Rotherham – is a source of competitive advantage and must be driven forward, says the report.