Overseas investment was a key contributor to the regional office markets in H1 2016. It accounted for 47% of £3.8bn investment to the end of July, compared to 29% over the long-term average, as appetite remained strong in the lead up to the UK referendum.
Take-up of office space within the regional markets in H1 matched the record first half set the previous year reaching 4.7m sq ft, which is 11% above average.
The trend is expected to continue to the end of 2016. Full-year take-up is forecast to reach 10.5m sq ft, just shy of the 10.9m sq ft recorded in 2015.
As businesses take stock of their post-Brexit trading environment, 2017 will probably see slightly lower take-up but regional office markets are less exposed to the sectors, such as cross-border financial services, which are most likely to be affected by this changing world.
Availability in the UK regions has fallen 2% from 11.3m sq ft at the end of 2015, with supply now standing at 11.1m sq ft – the lowest level on record. This limited pipeline has led refurbishments to be an attractive alternative over the past 12 months…