Sheffield office market reports strong start to 2018

However, the latest research from Lambert Smith Hampton also found that despite this upturn, combined office take-up was down 81% year-on-year.

The Sheffield office market pulse revealed that a total of 15 deals were completed during Q1 2018, with the professional services sector accounting for 36% of total activity.

Key transactions included Spaces’ 25,000 sq ft letting at Acero Works and the Home Office’s relocation to 21,000 sq ft at Foundry House.

Across the city centre, Grade-A supply fell by 25% over the quarter to just 110,000 sq ft, which was split across seven buildings.

With regards to the out-of-town markets, just 16,285 sq ft of Grade-A space was available across four buildings.

As a result, rents have increased across all grades, with a new headline rent of £24.50 per sq ft set at Acero.

Tom Burlaga, associate director at Lambert Smith Hampton’s Sheffield office, said that the lack of Grade-A space across both the city centre and out-of-town markets was of significant concern.

“However, the fact that repositioned Grade-B buildings continue to perform well is likely to pave the way for further refurbishments, which will hopefully alleviate any pressure until such time that new schemes are brought forward.

“The council’s recent publication of its Heart of the City II masterplan is welcomed and, although the plans have had a long gestation, the silver lining over the delay is that the proposed scheme now allows for a better mix – of retail, leisure and office – than the original retail quarter scheme and we can look forward to a 24-hour city with a considerably enhanced bar, hospitality and leisure offer, which is crucial if Sheffield is to attract increased inward investment.

“Occupiers will no doubt begin to plan ahead in confidence rather than adopting a ‘wait-and-see’ approach.

“The sooner we can see spades in the ground and cranes on the horizon for Heart of the City II, the better.”