The Big Nine
Quarterly update of regional office activity
One Temple Quay, Bristol
DATA & ANALYSIS
Principal and Managing Director, National Offices Team
OCCUPIER MARKET IN BRIEF
Following an extremely active Q4, take-up activity unsurprisingly reduced during Q1, with a total of 1.1 million sq ft let across the Big Nine markets. While this reflected a 40% decrease from the previous quarter, this is mainly down to take-up during the final three months of 2021 being so far ahead of the long-term average. Q1 take-up, therefore, fell just 17% below the 10-year quarterly average with the 5-year quarterly rolling average changing by just 0.2%.
“Demand for the best space continues to put pressure on headline rents, and as a result many Big Nine markets experienced rental growth during Q1 with the average net effective rent increasing by 3% in just three months.“
Principal and Managing Director, Regional Investment
INVESTMENT MARKET IN BRIEF
Overseas investors dominated office investment in Q1, accounting for almost three quarters of total spend across the Big Nine markets.
During the first quarter of 2022, the Big Nine regional office markets saw office investment of £755 million, reflecting a 21% increase from Q4 2021 and a 25% uptick against the 10-year average. Three overseas deals completed in excess of £100 million which led to overseas investors accounting for 74% of total volumes across just six deals
“Future proofed, well-located, good quality assets with a strong tenant base proved to be popular, particularly those that meet net zero carbon investment criteria, promote occupier well-being, and fulfil expectations for positive rental growth.“
During the first quarter of 2022 take-up in Manchester city centre totalled just 206,763 sq ft. Whilst this may well be a hangover from the frenetic end to 2021 it is reflective of a quiet time in the market as occupiers continue to wrestle with occupational needs and macro-economic influences.
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