【莱坊国际】2024年英国写字楼市场年中回顾报告_14页_613kb

UK Cities Office Market Mid-Year Review 2024

Core Content Overview

This report provides an analysis of the office market performance in various UK cities during the first half of 2024, focusing on occupier activity, supply and demand dynamics, investment trends, and future forecasts.

Key Cities Summary

Aberdeen

• Occupier Take-up: 91,445 sq ft, a 15% year-on-year decline and 36% below the 5-year H1 average.
• Grade A Supply: 184,089 sq ft, a 50% drop from 2023 and 60% below the 5-year average.
• Prime Rent: £32.50 per sq ft, stable at mid-year.
• Investment Volumes: £66.48m, the strongest H1 total since 2018.
• Development Pipeline: No speculative office space under construction.
• Prime Yield: 10.00%, 100 bps softer than H1 2023.
• Prime Rent Forecast: Stable.

Birmingham

• Occupier Take-up: 368,794 sq ft, 12% above the 5-year H1 average.
• Grade A Supply: 293,618 sq ft, up 59% quarter-on-quarter but 29% below the 5-year average.
• Prime Rent: £42.50 per sq ft, up 2% from 2023.
• Investment Volumes: £13m, down 59% from 2023.
• Development Pipeline: 724,000 sq ft of speculative office space under construction, expected to complete by 2027.
• Prime Yield: 6.75%, up 75 bps from 2023.
• Prime Rent Forecast: Stable/stronger.

Bristol

• Occupier Take-up: 253,035 sq ft, up 70% year-on-year and 22% above the 5-year H1 average.
• Grade A Supply: 180,504 sq ft, more than double the 2023 level and 34% above the 5-year average.
• Prime Rent: £48.00 per sq ft, up 13% year-on-year.
• Investment Volumes: £177.86m, the highest H1 total since 2021.
• Development Pipeline: 162,862 sq ft of speculative space under construction, due to complete by 2024.
• Prime Yield: 6.75%, 100 bps softer than H1 2023.
• Prime Rent Forecast: Stable.

Cardiff

• Occupier Take-up: 188,112 sq ft, up 27% year-on-year and 4% above the 10-year H1 average.
• Grade A Supply: 391,647 sq ft, up 38% from 2023.
• Prime Rent: £25.00 per sq ft, stable at mid-year.
• Investment Volumes: £13.9m, down 59% from 2023.
• Development Pipeline: 113,360 sq ft of speculative space under construction, due to complete in 2025.
• Prime Yield: 7.50%, 225 bps softer than prepandemic levels.
• Prime Rent Forecast: Stable.

Edinburgh

• Occupier Take-up: 162,570 sq ft, down 32% year-on-year and 8% below the 5-year H1 average.
• Grade A Supply: 711,361 sq ft, up 57% from the 5-year H1 average.
• Prime Rent: £45.00 per sq ft, up 5% year-on-year.
• Investment Volumes: £41.41m, down 71% from 2023.
• Development Pipeline: 110,385 sq ft of speculative office stock under construction, due to complete by 2026.
• Prime Yield: 6.75%, 100 bps softer than H1 2023.
• Prime Rent Forecast: Stable/stronger.

Glasgow

• Occupier Take-up: 245,411 sq ft, up 82% year-on-year and 22% above the 5-year H1 average.
• Grade A Supply: 779,500 sq ft, up 19% from 2023.
• Prime Rent: £39.50 per sq ft, up 10% year-on-year.
• Investment Volumes: £100.1m, up 55% from 2023.
• Development Pipeline: 358,397 sq ft of speculative space under construction, due to complete by 2026.
• Prime Yield: 7.50%, 225 bps softer than prepandemic levels.
• Prime Rent Forecast: Stable.

Leeds

• Occupier Take-up: 349,332 sq ft, 13% below H1 2023 but 22% above the 5-year H1 average.
• Grade A Supply: 192,841 sq ft, down 18% from 2023 and 28% below the 10-year average.
• Prime Rent: £38.00 per sq ft, up 3% year-on-year.
• Investment Volumes: £24.75m, up 25% from 2023.
• Development Pipeline: 428,489 sq ft of speculative space under construction, expected to complete by 2026.
• Prime Yield: 7.00%, 75 bps softer than H1 2023.
• Prime Rent Forecast: Stable.

Manchester

• Occupier Take-up: 504,885 sq ft, up 29% year-on-year and 14% above the 5-year H1 average.
• Grade A Supply: 712,231 sq ft, up 29% from 2023.
• Prime Rent: £45.00 per sq ft, up 13% year-on-year.
• Investment Volumes: £44.3m, down 5% from 2023.
• Development Pipeline: 584,109 sq ft of speculative office stock under construction, with 35% of it still available.
• Prime Yield: 6.75%, 100 bps softer than H1 2023.
• Prime Rent Forecast: Stable.

Key Trends and Insights

• Occupier Activity: Overall, occupier activity increased in most cities, with a notable shift toward longer-term strategies in H1 2024.
• Grade A Supply: Most cities saw an increase in Grade A supply, with some experiencing significant growth.
• Vacancy Rates: Vacancy rates decreased in several cities, especially in top-quality spaces, due to limited supply and strong demand.
• Prime Rent Growth: Prime rents rose in many cities, reflecting improved demand and limited supply.
• Investment Volumes: Investment activity varied significantly, with some cities showing strong performance and others more subdued.
• Development Pipeline: There was a noticeable increase in speculative development in cities like Birmingham and Glasgow, with many projects expected to complete in the coming years.
• Prime Yield Stability: Prime yields remained stable or showed slight declines in most cities, indicating continued investor interest and market confidence.
• Sectoral Activity: Professional services, finance, and technology sectors were the most active in leasing space, with a growing emphasis on ESG-aligned properties.

Conclusion

The UK office market in H1 2024 showed signs of recovery and increased activity, particularly in cities like Bristol and Glasgow. Despite some cities experiencing subdued investment, the overall trend suggests a positive outlook, driven by demand for high-quality, amenitised spaces. Landlords and investors are advised to act early due to the limited supply and increasing competition for prime office spaces. The future outlook remains cautiously optimistic, with continued focus on ESG considerations and long-term leasing strategies.