Time and again over the past few months, it has been reported that the commercial property market in regions away from London is getting stronger and stronger. This has now been underlined by a new report from Knight Frank, which has shown the real recovery and continued improvement in the office rental sector in Newcastle, with the north-east city becoming something of a hotspot for investors as a result.
According to the firm, there was a 70 per cent increase in the uptake of office space in Newcastle throughout 2013, even with a weaker final quarter putting something of a dampener on the figures. It meant that it was one of the best performing cities in the UK, even with London involved, and transaction levels in the city grew subsequently. In 2013, office transactions in the city were worth GBP 67.75 million - six times the level witnessed in 2012. The majority of this business came in the final months of the year, with Q4 seeing GBP 49 million of investment alone.
Newcastle has become one of the top performing regional markets in recent times, alongside the likes of Manchester, Leeds, Bristol and Birmingham, all of which have managed to take advantage of the slowly improving economy and rising business sentiment. Patrick Matheson, partner, office agency at Knight Frank, said Newcastle should continue to see strong performance throughout 2014. "With the increase in office inquiries over Q4 2013, we anticipate the first half of 2014 will experience continued strong occupier activity," he explained.
However, moving forward there are still issues to be addressed in the city, with Knight Frank saying that there are still issues surrounding levels of supply of high-grade stock. Mr Matheson said: "With only one new-build scheme on site, the pipeline is particularly limited. As the overall economy improves in the north-east, Newcastle's city centre could be faced with an acute shortage of Grade A space. Headline rents may not rise in the short-term, but we expect rental incentives to begin to tighten as supply diminishes."
- Tuesday 18 February 2014