GVA: Regional office markets remain slow

Office take-up levels were 12% below the quarterly average in a group of nine regional cities studied by surveyor GVA.

City centre and out-of-town take-up combined in the nine regional centres where GVA has offices recorded take-up of 1.49m sq ft in Q2, a 6% drop from the quarterly average. The city centre market made up 59% of this total, with 882,000 sq ft of deals, over a quarter of which was in Edinburgh. The out-of-town market recorded a 6% rise on the quarterly average.

Take-up was close to average in Bristol, Glasgow and Newcastle, but significantly below average in Birmingham, Cardiff, Leeds, Liverpool and Manchester.

Q2 take-up in Liverpool city centre was 33,150 sq ft, less than half the average level of 77,790 sq ft. There are outstanding requirements in Liverpool from Direct Line, looking for between 60,000 sq ft and 70,000 sq ft, and Sony, after 50,000 sq ft to 80,000 sq ft, GVA said.

Manchester reported 132,584 sq ft of deals in the second quarter compared to an average of 227,691 sq ft

Chris Cheap, director of GVA, said: "The overriding theme across all North West markets is occupier nervousness and higher levels of due diligence increasing the time taken to convert firm interest into transactional commitment, this is particularly the case with larger lettings or pre-lettings which essentially underpin take up levels. It is clear that this has contributed to a lag in the pipeline of transactions over the last quarter, however with a number of these deals still very much on track we expect there to be increased activity towards the end of the year.

"The central Manchester market continues to see a high number of smaller transactions within the secondary sector which yet again illustrates its scale and robustness as indigenous occupiers continue to move."