Nery Alaev writes about the UK property market.
Research from a major property consultancy firm has shown that ‘regional’ cities in the United Kingdom are facing an acute under-supply of office space.
I’ve decided to look further into the news and find out more about the findings.
Carried out by Cushman & Wakefield, the research indicates that regional cities are losing space as take-up increases and the UK economy grows.
But firstly, what is a ‘regional’ city? Cynics may describe them as any major urban settlement outside of London, whereas others would regard them as strong, independent hubs key to the growth of their respective locations.
Given that there is no official description exists for ‘regional’ cities in the UK, they are best described as major cities that are often the key cities in their respective regions. Examples include Manchester (Lancashire), Leeds (Yorkshire) and Birmingham (Midlands).
In 2015, transactional volumes in the city reached £2.3bn – the highest levels in nine years. This clearly indicates that regional cities are subject to major investments in regards to commercial property.
Cities such as Bristol, Leeds, Manchester and Edinburgh are all set to see office rents increase as space begins to run out thanks to increased take-up.
Alex Dunn of Cushman & Wakefield said: “The current low availability across the regions means that occupiers are finding it harder to find good quality space, particularly larger lot sizes.
Those that can afford to wait and sign a pre-let on a new development are continuing to do so.”
The statement clearly points towards a lack of prime office space in regional cities across the country – this may spell the beginning of a period of rising rents in the UK’s regional cities similar to London’s.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.