The UK’s commercial property market, particularly in the regions away from London and the south-east, performed admirably in the second half of 2016, despite fears about its performance after the Brexit vote, when many would have predicted that it would suffer as businesses lost confidence.
Office market stats
According to the latest data released by the CBRE, the market across the UK saw demand from commercial tenants finish the year at around 5.6 million square feet. Despite the fact that this year also saw the country hit by the decision to leave the EU, this was only around seven per cent lower than in 2015, when demand was at six million square feet.
Even more encouragingly, the commercial office market nationwide only contracted by around three per cent when compared to the long-term five-year average.
In addition to this, the number of new tenants who were taking up spaces in offices in the second half of the year, after the referendum announcement had been made, was only three per cent lower than in the first six months of the year, indicating that companies remained relatively confident in the face of uncertainty.
“Occupier data for the full year, on the face of it, indicates that concerns about the EU referendum result do not appear to have unduly deterred occupiers from continuing their searches for new space,” said Emma Jackson, associate director of research for national office markets at CBRE.
“However, for many occupiers, their searches have been initiated due to a forthcoming lease break or expiry so referendum concerns will play little part in their decision relating to office moves,” she added.
Strong office performance in the regions
One of the best performing cities across the whole of the UK was Bristol, where office space uptake managed to outperform 2015’s figures by as much as 60 per cent. There were similar positives seen in other areas of the country as well, with Glasgow and Liverpool in particular performing better than they did the year before.
Liverpool is one of the UK’s most affordable cities to set up business and is home to the largest number of start-up companies in the country. The limited supply of Liverpool office space has led to an increase in office rates due to strong demand. A Liverpool office investment may prove fruitful for investors looking to capitalise on the UK’s commercial property sector.
And while the champion of the Northern Powerhouse that is Manchester did not quite manage to top performance levels seen a year earlier, it did still manage to see levels of uptake that were a full 16 per cent higher than five year averages.