2024-09-02-莱坊-UK_Cities_Mid-Year_Review_2024_14页_585kb

Overall Market Overview
The H1 2024 office market in the UK shows signs of improvement, driven by better economic indicators and control of inflation, leading to lower vacancy rates in premium spaces. Occupiers are increasingly opting for longer-term strategies due to increased urgency, while developers face constraints from high costs. Prime rents and yields are rising, though some vacancies may increase in coming months. Demand favors best-located, amenitized buildings with ESG considerations.

City-Specific Summaries

• Aberdeen: Office take-up fell by 15% year-on-year from H1 2023, with supply decreasing 50%. Investment volumes improved significantly to £66.5 million, up 60% from the previous year. Prime rent stabilized at £32.50 per sq ft, and prime yield rose to 10.00%, down 175 basis points from 2023. The energy sector dominated leasing, accounting for over 40% of all space taken up.

• Birmingham: Occupier activity rebounded with take-up of 368,794 sq ft, 12% above the 5-year H1 average. New Grade A supply increased, despite being below long-term averages. Investment volumes reached £13 million, half of 2023's level. Prime rent rose by 1% to £42.50 per sq ft, with yields stable at 6.75%. Total vacancy was 5.8%, reflecting market resilience post-pandemic.

• Bristol: Take-up surged 70% y-o-y to 253,035 sq ft, the highest since 2021. Investment activity was robust, with volumes at £177.86 million across 6 deals, up 615% from 2023. Prime rent increased 13% to £48.00 per sq ft, with yields at 6.75%, down 100 bps year-on-year. The professional services sector led demand, constituting about half of leased space.

• Cardiff: Take-up rose 27% y-o-y to 188,112 sq ft, above the 10-year H1 average. Investment volumes dipped to £13.9 million, 59% below 2023 levels. Prime rent softened slightly to £25.00 per sq ft, with yields at 7.50%, down 100 bps. Vacancy increased to 12.5%, and occupancy was driven by government and diverse sectors, with limited new developments.

• Edinburgh: Take-up decreased 32% y-o-y to 162,570 sq ft. Investment activity was moderate at £41.41 million, up 71% from 2023. Prime rent held steady at £45.00 per sq ft, up 5% annually. Vacancy rose to 11.16%, with the finance sector being the dominant occupier group. New developments aim to reduce shortage ahead of 2026.

• Glasgow: Take-up improved 82% y-o-y to 245,411 sq ft, well above the 5-year average. Investment volumes reached £100.1 million, a 55% increase. Prime yields remained stable at 7.50%, and rents rose 10% to £39.50 per sq ft. Supply increases are expected from 2024-2026, with professional services as a key driver.

• Leeds: Take-up declined 13% y-o-y to 349,332 sq ft, but remained above the 5-year average. Investment volumes reached £24.75 million, up 25% from 2023. Prime rent at £38.00 per sq ft increased 3% year-on-year. Finance and professional sectors accounted for over 50% of demand, with vacancy settling at 6.8%.

• Manchester: Occupier activity increased 29% from H1 2023, with take-up of 504,885 sq ft. Investment volumes reached £44.3 million, slightly below 2023 levels. Prime rent rose 13% to £45.00 per sq ft, with yields stable at 6.75%. Professional services led uptake, and development pipeline focuses on new builds, supporting sustained rental growth.

• Newcastle: Take-up dropped 10% y-o-y to 77,324 sq ft, below the 5-year average. Investment activity was minimal at £8.6 million, down 79% from 2023. Prime rent at £32.00 per sq ft showed the largest year-on-year growth at 31%, up from pandemic lows. Development pipeline includes projects offsetting vacancy concerns.

• Sheffield: Occupier activity was subdued, with take-up of 96,276 sq ft. Investment volumes reached £0 million, due to muted transactions, despite development completions adding to supply. Prime yields held at 7.50%, and rents increased 13% to £30.00 per sq ft. TMT and legal sectors influenced market dynamics. Low vacancy may prompt later activity.