Soaring take-up and record rents prompt hopes of office building boom in Sheffield
Office take-up in Sheffield reached a 10-year high last year - prompting talk of a building boom to meet demand.
Some 85 deals were completed, with firms taking almost twice the space compared to the year before. Availability of prime office stock fell to its lowest level on record, figures show.
Demand has continued into 2018, with teaching firm Tes Global and Sheffield-based HLM Architects set to move into new block 3 St Paul’s.
Plusnet has taken all of the fourth floor in The Balance on Pinfold Street, with room for 200 people. And law firm CMS, formerly Nabarro, is considering moving its 250 staff into the city centre, as revealed by The Star last week.
At the same time rents last year hit an ‘all time high’.
The activity is set to boost confidence in talk of new offices including 4 St Paul’s on Pinstone Street, another block in the Heart of the City Two (formerly the New Retail Quarter) and Vidrio, next to Acero, on the Digital Campus on Sheaf Street, which is owned by Kevin McCabe’s Scarborough Group.
Peter Whiteley of Knight Frank said: “Prime buildings are securing good take-up. The development pipeline however, remains limited.”
Rob Darrington, partner at CPP, said newly-available 3 St Paul’s Place, Acero and Steel City House had all experienced “good levels of interest” and there was an immediate shortage of Grade ‘A’ office supply for 2018.
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That meant new building projects were likely to be launched on a ‘pre-let’ basis, where some occupiers where agreed before construction started.
He added: “As a result of the shortage in supply, we are expecting interest from larger occupiers on a pre-let basis, with only a handful of sites able to cater for this demand.”
A move by Johnston Publishing - publishers of The Star and Telegraph - from Telegraph House on York Street to the Balance on Pinfold Street was the largest transaction of 2017, according to Knight Frank.
Telegraph House was sold to Tosca Commercial Property Fund for £3.6m. It is set to be converted into flats.
Mr Whiteley added: “Preceding the Johnston Publishing lease, Electronics firm ARM Ltd secured 20,000 sq ft at CityGate at Moorfoot in a move from Rockingham Court in the Devonshire Quarter to enable expansion.
“These two headline transactions show the growth of technology, media and telecoms occupiers in recent years.”
The £20.16m purchase of Capita’s Sheffield headquarters by UK Commercial Property Trust was the largest deal.