Drought hits office market

Shortage: There is no grade A space available in the city centre
Shortage: There is no grade A space available in the city centre
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Sheffield’s office market is struggling, according to a report on the Yorkshire market by BNP Paribas Real Estate.

The international property adviser’s Yorkshire Office Market Report Spring 2012 says the city’s annual take-up of office accommodation is expected to be down on the 2011 figure

Leighton Thomas, head of BNP Paribas Real Estate in Sheffield, said: “This year is expected to be quieter than 2011 for the Sheffield occupier market.

“Unless a sizeable requirement comes to the market in the next month or so take-up is expected to fall short of last year’s figure.”

BNP Paribas Real Estate says the investment market has been hit by a lack of suitable buildings, which is having a negative impact on the volume of transactions.

In Sheffield there is currently no grade A space available in the city centre.

The council is launching a £20m scheme to end the drought.

The money - £13m from Europe and £7m from the Government - aims to fill the funding gap left by the demise of Yorkshire Forward and the continued reluctance of the banks to lend.

Meanwhile occupiers are being forced to consider ring road locations or grade B stock in the centre.

However, the Sheffield office market had a better first quarter than Leeds, particularly when compared to the first quarter of 2011, when there were no deals.

British Waterways’ £7.05m purchase of South Quay means transactions in the first quarter were comparable to the last quarter of 2011. A further £30m deal had been completed since the end of the quarter with Moorfield Group’s purchase of the Velocity Village mixed-use scheme.

It comprises 100,000 sq ft of commercial office and retail space, 364 apartments and parking for 550 vehicles, across five buildings.

Significant transactions in the first quarter of 2012 also include the Old Brewery, Riverside, for Autism Plus and Portland House for recruitment firm Dutton International.