A shortage of prime office space in UK leading cities is increasing the demand for office property i...
A shortage of prime office space in UK leading cities is increasing the demand for office property in out of town locations pushing rents up by around 15%.
According to a Weatherall Green and Smith UK office report, for the first half of 2000, demand for office space in regional UK centres outstripped supply. Strong out-of-town activity can be seen in regional areas including Solihull and Salford, which are becoming more attractive alternatives to Birmingham and Manchester respectively.
Mark England, partner at Weatherall Green and Smith, said: "A shortage of grade A speculative development space in the traditional city centre cores is resulting in further pressure on out of town locations. Pre-letting agreements for high profile city centre schemes are increasing."
The boom in the out of town market has forced per square foot rent increases of between 8-15% in the past six months and this trend looks set to continue for at least the next quarter.
Edinburgh now commands the most expensive office rents outside of London.
This demand continues to be driven by the IT and telecommunications sectors, which have many new companies springing up that in turn have a need for top-grade quality infrastructure, such as fibre optic cables, England Financial institutions are also seeking high specification units as their business focus increasingly moves away from the high street due to the dropping off of retail trade.
Guy Grantham, an out of town research analyst for Weatherall Green and Smith, said: "Although the office sector continues to perform better than its retail and industrial counterparts, the shortage in quality space throughout core cities, such as London, Bristol, Birmingham and Glasgow, has encouraged more and more occupiers and investors to look outside these locations."
According to Kimberley Huggins, Weatherall Green and Smith's marketing manager, both primary and secondary properties are under huge demand in Britain's cities, and the situation is worsened by the lack of development space coupled with difficulties in obtaining planning permission.
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