_Regional predictions 2020

Birmingham

Jamie Phillips, Knight Frank partner, and head of Office Agency & Tenant Representation in Birmingham, said: “With the recent years of investment in to infrastructure and working environment, a strong and varied economy and, for the first time, the region having clear & visible leadership all means Birmingham is well placed to take advantage of the new government’s stated target of ‘Levelling Up’ the country post Brexit.

“The increase in clarity around the economic environment should provide occupiers with the confidence to move forward with their requirements in 2020 and we expect to see more activity relating from a mixture of ‘tooling up’, consolidation of locations and M&A deals. Further speculative office development will help the occupiers circling the city provide a world class working environment to attract and retain the best staff.

“2020 should also continue to see the shift to a more dynamic way of working with technology & smart buildings allowing a more agile environment with a more efficient use of space.

The growing flexible workspace market should continue to grow with some occupiers taking advantage of a ‘Core & Flex’ approach. Desk rates remain competitive and with further entrants to the market perhaps providing a less ‘chain’ offer with a sense of individuality and a point of difference this can only be positive for the sector.

“The city has a number of larger unsatisfied requirements across a number of sectors, including engineering/infrastructure firms and new Tech companies, what is needed now is to make sure the city’s educational offer matches up to what these new industries are asking for.”

Leeds

Eamon Fox, partner and head of office agency at the Leeds office of Knight Frank, said: “There is no doubt that 2020 is going to be an exciting and productive year for the office market in Leeds.

“The headline rent of £30 per sq ft was reconfirmed in a number of lettings in 2019. Knight Frank have a number of significant lettings in legals at £32 psf, which will be publicised in the first quarter of the year. We expect £34 psf to be achieved by the end of 2020. 

“There are a number of developments to watch. Globe Square and Kings Court, the offices recently vacated by law firm Walker Morris, will be two schemes in the news.

Kings Court will change hands soon, with the new owners planning a redevelopment of scale and quality.”

Scotland

Colin Mackenzie, partner at Knight Frank and head of office agency Glasgow, said: “The three new build office developments – 177 Bothwell Street, Cadworks and Atlantic Square – will continue to attract occupier interest as they move forward towards practical completion. Early letting interest in all three schemes is giving confidence to the market.

“Several key office refurbishments currently completing such as Sentinel and 55 Douglas Street are now on the radar.

These buildings are now a test to the market for more immediate occupational requirements. Take up of these high quality refurbishments is important as further refurbishment schemes are due on line within 12 months – such 6 Atlantic Quay and 50 Bothwell Street.

“The wave of serviced office operators that has been long anticipated may not come to anything in 2020 in Glasgow. Partly as focus may be on other cities deemed strategically important. Glasgow is represented by a number of established serviced office operators both local and national that have high levels of occupation.

“Interestingly headline rental levels are worth watching. Some refurbishments have achieved over £30.00psf.

If this is sustained going forward it’s very positive for landlords owning or considering value add opportunities. It might also mean new build schemes have the confidence to move quoting rents on to the mid £30’s.

“For occupiers, especially larger corporates there is potentially limited supply especially for those that are more location sensitive. Assuming more positive market conditions post General Election / Brexit uncertainty occupiers may need to activate requirements earlier in order to guarantee appropriate options are available in the city.”