The Newcastle office market is expected to match the figures it produced in 2011. Demand levels were encouraging during the first quarter of 2012, according to a report recently released by BNP Paribas Real Estate. According to the new research report, the amount of Grade A space available in the city centre is expected to fall.
The prediction in the out of town market is a bit different, however. There is potential for the level of office space to rise with the level of speculative construction activity in the former Enterprise Zones. BNP Paribas Real Estate estimates that headline rents will remain at their current levels of £20.00 per sq ft in the city centre and stay slightly lower (£16.95 per sq ft) for space in the out of town market.
In the first three months of 2012, a number of occupiers have been searching for office space of between 10,000 and 30,000 sq ft. The main market activity has moved to the out of town areas, as occupiers are drawn by the lower cost of office space in those locations. One notable example of a major company which has located in this area is the management consultants firm Accenture, which has taken 30,515 sq ft. Fabricom Offshore, the engineering and project management firm, has taken 32,800 in office space at Quorum Business Park.
Newcastle is considered an example of the typical regional office market in the UK at present. Firms which are looking for office space are required to be quite cost-conscious, and may be more likely to move out of the city core it if means being able to get better pricing for the space they need. Companies are also going to be thinking about using the space they have more efficiently to ensure that they are getting good value for the money.
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