The workforce is returning to the workplace and as you may have read in our recent blog, Fenham Hall Studios – A Real Social Network, that’s a great thing for the psychological health of you and your employees.
So, with the reinvigoration of the office rental marketplace we thought we’d have a look at some of the finer points regarding Newcastle’s commercial letting market. In short, who’s renting where and for how much?
OCCUPANCY IN NUMBERS
At a macro level, office occupancy is recovering strongly from the drop that was experienced during the pandemic. A European wide survey conducted by commercial lettings agent, Savills UK, has found that “European office occupancy rates have increased from 43% (June 2022) to 55% (February 2023)”. A sizable 12% increase in just 8 months.
What’s most encouraging about this movement, is that we should see a large-scale return to pre pandemic occupancy rates (70%) within the next 12 months.
So, how are things faring in Newcastle? Well, better than average.
A recent article in bdaily.co.uk suggests that developments are seeing “an “impressive” take up of space both by way of pre-lettings and new lettings over the last two years.” With occupancy at the Lumen Helix building at “88 per cent”.
As a whole office take-up numbers are looking particularly strong, according to Avison Young’s quarterly ‘Big 9’ report – a document looking at the commercial letting markets in the UKs biggest cities.
The report reads:
“Take up totalled 201,453 sq ft, up 51% on last quarter and 4% above the 10-year average. This brought annual take up to 777,207 sq ft, the second highest since 2014 after last year’s bumper activity.”
And goes on to say:
“Newcastle remains the tightest market of the Big Nine, with city centre availability falling to 4.7% in Q4.”
All in all, office occupancy in the Newcastle area is on the up.
VALUE FOR MONEY?
So, in a commercial market roaring back to life, where in the city represents the best value for money?
Commercial property website oktra.co.uk has carried out a review of UK office space costs, with Newcastle having average ranges of £20-28/sq ft. for city centre properties, and £12-16/ sq.ft for fringe area properties.
The city centre plays host to a variety of locations, features and price points; ranging from Category A new build locations, with costs upwards of £30/sq ft, to Category B properties at the lower end of the range, which are of course subject to lesser facilities.
The benefits of the central location are that of proximity to public transport links and the shops and restaurants. However, as we’ve discussed before, (link to news piece) city centre locations almost always have no included parking (meaning heavy additional costs for business owner and employees), and are exposed to the heavy traffic and air pollution issues associated with being located in the middle of a busy city.
Fringe locations bring the obvious benefits of the lower price tag and, due to the likelihood of increased external space, often include staff parking facilities. However, locations such as the Cobalt Business estate can feel disenfranchised, with no nearby shops or restaurants, and can also suffer from poor public transport links.
FHS – THE BEST OF BOTH WORLDS
We believe that to experience both best value for money and working life experience, you need to locate your business somewhere like Fenham Hall Studios.
From a financial and facilitative point of view, the £14/sq ft. cost alongside the high finish, well specced offices, that also includes that illusive and invaluable included parking represents the best value for money.
As we’ve discussed in our blogs regarding mental and physical health and employee social interaction benefits to the workforce, being located out of the centre of a city gives you a more rounded working experience, leading to better professional performance.
Finally, despite benefiting from all the positives of a tranquil, fringe location the city centre is within walkable distance and benefits from excellent transport links.
Studio E (1,031 sq ft.) is available now. A contemporary office space for businesses with up to 12 employees, benefiting from stunning views of Fenham Hall to help inspire the mind. Including a kitchen and separate tea prep area help fuel that essential social interaction. Also comes with reserved and visitor parking. Currently qualifies for 100% business rates relief.
For further details see – https://www.fenhamhallstudios.com/offices-to-let/studio-e/