Prime Newcastle city centre office space limited

Occupiers should act now to avoid missing their window of opportunity say BNP Paribas Real Estate

Article posted: 03 Nov 2011

Take up of office space in Newcastle has already exceeded 2010 levels and is well on the way to reaching 500,000 sq ft, according to the latest research by BNP Paribas Real Estate.

The leading international real estate adviser’s Autumn Newcastle office market report looks at take up, rental growth, supply, pipeline and investment.

Take up to the end of Q3 reached 440,150 sq ft, an increase of 54% on the same period in 2010. In the city centre in particular, take up has increased quarter by quarter as high quality space has been in demand from the likes of BSkyB who took 36,000 sq ft of office space at Wellbar Central (pictured).

Aidan Baker, director of office agency at BNP Paribas Real Estate’s Newcastle office, commented: “Occupiers looking for a competitive deal on city centre space should act now as we expect their window of opportunity to close shortly. There is only 110,000 sq ft of prime city centre space currently readily available. Waiting could mean having to compromise on location, size and quality of space as well as the incentives.”

The out of town market has also seen higher take up in 2011 than 2010 to date with an average of 90,000 sq ft a quarter, compared to 67,000 sq ft a quarter in 2010. Out of town rents are currently at £16.95 per sq ft.

The Newcastle investment market has seen a slow 2011 to the end of Q3 with £23.7m invested, down from the £82.5m spent over the same period in 2010.

The report cites the most significant investment deal in the Newcastle market as the Matrix’s £11m sale of Mercury House at Cobalt Business Park to private investors in March 2011 at a yield of 12.95%.

Despite the rebound in occupational activity in 2011, the Newcastle office market is still performing below 2008 levels and rents have been static at £20 per sq ft since March 2010.

For breaking news relating to office space in the North East follow us on http://twitter.com/officespacenews

Posted by Jules