A lack of city centre office space and uncertainty over the Sevenstone shopping development is being blamed for office lettings tumbling in Sheffield.
Property consultants Lambert Smith Hampton say take- up fell to just under 51,000 sq ft in the third quarter of the year – half the figure for the same period last year.
LSH head of office agency in Sheffield, Rob Darrington, said: “City centre take up has been severely restricted by the lack of available stock in the right locations.
“Only eight per cent of the total take up in Q3 was accounted for by Grade A city centre space as larger corporate organisations have taken advantage of the market conditions to secure favourable terms in out of town locations.”
LSH says there is currently 179,200 sq ft of Grade A space available in Sheffield city centre, but most of it is close to the city’s ring road.
The property consultants say there are a number of high profile occupiers seeking high quality premises in Sheffield in the right location, but occupiers are rarely in a rush to relocate, so aren’t inclined to compromise.
“There continues to be a number of barriers to occupiers taking the decision to move to new premises and even with the recent announcement that we are officially out of the double-dip, there continues to be a great deal of economic uncertainty,” says Mr Darrington.
“There are also local factors affecting relocations in the city centre, namely the uncertainty over the proposed new retail quarter and the effect it will have on surrounding businesses. In addition, landlords are still offering more and more favourable terms to entice businesses to remain in occupation of their current premises.”
Headline rents in city centre remained at a notional £20 per sq ft, while out of town locations are around £12 a square foot.
LSH says the most significant occupational transaction during the third quarter was the letting of 10,000 sq ft of space to Aero-Engine and High Technology components manufacturer Firth Rixson at Centre Court in the Don Valley.