Strategic real estate advisor Avison Young has released its latest quarterly Big Nine office market update, covering the first quarter of 2021.
Newcastle and Bristol, which were the top performing cities in 2020, have continued their robust performance into 2021. Take-up in Newcastle amounted to 54,980 sq. ft in the city centre and 84,400 sq. ft out-of-town; overall 19% below the ten-year average.
Activity in the city centre was boosted by the largest deal of the quarter, a 44,700 sq ft pre-let to lawyers Womble Bond Dickinson, who have taken the top five floors at The Spark, due for completion in 2022. This is the third largest deal in the city centre over the past ten years.
Other key deals were in the out-of-town market, including 25,581 sq ft to a private individual at Parsons House, Washington. There were four further deals greater than 5,000 sq ft, including 7,900 sq ft to flexible workspace provider Instant Offices Group at Kings Court, North Shields for the Department for Work and Pensions.
There are several new requirements in the market, which is promising for the second half of this year and a healthy number of lease events for 2022. Occupiers will be considering their options now that 40% of The Spark has been let and 120,000 sq. ft Bank House on Pilgrim Street is not due to complete until 2023. Ask Real Estate’s 70,000 sq ft One Strawberry Lane is also under construction but is fully let to the Home Group on a 30-year lease.
In addition, South Tyneside Council has been awarded £3 million from the government’s Getting Building Fund to support a riverside office building: The Glassworks in Harton Quay, South Shields. The proposed building will provide 50,000 sq. ft of Grade A office accommodation.
Tony Wordsworth, Director, National Offices Team at Avison Young, Newcastle said:
“Nationally, a combination of lockdown and the traditionally slow start to the year has not surprisingly resulted in well below average take-up activity for the Big Nine office markets during Q1. However, sentiment is improving noticeably, enquiries are increasing and there is enough recent activity in both the occupier and investment markets to indicate that as restrictions ease, activity will increase throughout the year.”