2024-01-19-莱坊-UK_Cities_Newcastle_Q4_2023_1页_268kb

Newcastle Office Market Summary

Core Content

The document provides an overview of the current state of the office market in Newcastle, focusing on both occupational demand and investment activity. It highlights key metrics and trends that are shaping the market dynamics in the city centre and surrounding areas.

Occupational Demand

The office market in Newcastle is currently experiencing strong demand, with the following notable figures:

• Take up (sq ft): 74,906
• Number of Deals: 13
• Most Active Sector: Professional Services
• Grade A Availability (sq ft): 323,730
• Vacancy Rate: 9%

The data indicates that professional services are the most active sector in terms of leasing activity, suggesting a robust demand from firms in this industry. Grade A office space remains available, but the relatively low vacancy rate (9%) suggests that the market is competitive and well-utilized.

Investment Activity

The investment activity in the Newcastle office market is also highlighted, with the following key points:

• Investment Volumes (£m): £21
• Quarter vs 10-Year Average: -7% (a decline compared to historical averages)
• Number of Deals: 1
• Prime City Centre Yield: 7.50%
• Prime Out-of-Town (OOT) Yield: 8.00%
• Forecast Total Return (PA 2023-2027): 2.7%

The investment volume for the quarter is £21 million, which is below the 10-year average, indicating a potentially slower market for real estate investment. The single transaction noted is for Wellbar Central, which was purchased by Motcomb Estates Ltd from Orchard Street IM LLP. The prime city centre and OOT yields are both relatively high, suggesting that investors are still interested in the area despite the lower volume. The forecasted total return for the period 2023-2027 is 2.7%, reflecting a cautious outlook from investors.

Key Information

• Occupational Activity: The market is showing active leasing with a focus on professional services.
• Availability: Grade A office space is available, but the market is tight with a 9% vacancy rate.
• Investment Trends: There has been a decline in investment volume compared to the 10-year average, but yields remain attractive.
• Major Transaction: The notable transaction was for Wellbar Central, with a purchase price of £21 million.

Conclusion

The Newcastle office market is currently characterized by strong occupational demand, particularly in the professional services sector, and a relatively low vacancy rate. While investment activity has declined compared to historical levels, the yields in both the city centre and out-of-town areas remain appealing. The market appears to be in a stable phase, with continued interest from occupiers and a cautious approach from investors.