The third quarter has shown a continuing positive trend for office take-up with Newcastle city centre showing an exceptional rise of 80% over the previous quarter, say the Offices Group of chartered surveyors.
At 102,747 sq ft compared with 56,949 sq ft for quarter two the figures reflect increased buoyancy in the market.
Overall however take-up is down to 178,071 sq ft, a figure which is lower than the average quarterly take-up rate for the last two years.
Tim Evans, partner in charge at Knight Frank, said the figures are encouraging.
“The improvement in the economy and a general air of confidence has translated into more enquiries and most importantly more office lettings.
“We are confident that this improvement will be sustained,“ said Evans.
The PriceWaterhouseCoopers (PWC) deal at Central Square South for 23,600 sq ft is the largest city centre for two years and again illustrates the attractiveness of Newcastle for the professional sector.
The significance of the PWC deal is the team effort behind it says Tony Hordon, senior director, DTZ
“In order to accommodate PWC it required the relocation of DTZ, Qubic Tax, together with Arts Council for England,” said Hordon.
“To orchestrate and ultimately deliver these transactions, it required not only a team effort, but appetite. It is this appetite which I hope is a barometer for an improving sentiment in the occupational markets.
“There is no doubt there is more activity and confidence in the market which can only improve as large corporates such as PWC are seen to be making moves of this scale.
Occupying some 23,000 sq ft in Central Square South, PWC has acquired perhaps one of, if not, the best office building in the city of Newcastle, which we hope provides the catalyst and foundations for continued activity and movement in the occupational markets.”
Newcastle needs to project the right image to secure its future, according to Bill Lynn of ES Group, in the city.
“A key issue for Newcastle’s future prosperity is how we market ourselves as a business location and investment target,” Lynn said.
“If Newcastle wants to be seen as a serious contender, we need to forge a strong identity and work hard at our statistics and demographics. This is the only way to prove that we are comparable with Manchester, the Leeds city region, and the Sheffield city region.
“We need to work very hard at building a stronger statistical and demographic profile than we have at the current time.
“Newcastle doesn’t have a huge population, but is generally perceived as being bigger than it is because of its adjoining areas.”
Lynn said that many property professionals in the city were conscious that big institutions look at closely at demographics in deciding which locations they would be prepared to consider.
“Our worry is that, in many cases, Newcastle will appear on the wrong side of their cut-off line,” he said.
“To overcome this, we need our demographic to include our adjoining areas and the different Local Authorities to give us a broader scale.
“Also the issue of our name is a bit of hot potato locally. Many favour us branding ourselves ‘the Newcastle city region’.
“In my view, the phrase ‘North East’ means little to many outside the region. Newcastle is the only name within the North East that means something on an international playing field, but the disparate views voiced by the various Local Authorities mean this is never going to be acceptable to everyone.
“However, we have the Newcastle Gateshead Initiative, which is probably the best we’re going to achieve in the short term.
“We need to acknowledge that, if you’re looking for a regional or sub-regional office location in the North East, you’re bound to look at Newcastle. Newcastle has many advantages regionally – the airport, an East Coast main line station, and a strong retail offer with Eldon Square, Newcastle city centre and, across the river into Gateshead, the Metrocentre.
“In short, it has all the credentials to be the regional capital, and many of us would argue that the region’s branding should be built around this to benefit of the whole area.”