UK Cities Newcastle Q2 2024

Newcastle Office Market Q2 2024 Update

Activity Overview

• Occupational Take-up: The occupational take-up for the quarter ended Q2 2024 was 40,767 sq ft.
• Number of Deals: There were 12 deals completed in the last year.

Supply and Vacancy

• Supply: The total availability of Grade A space is 299,500 sq ft.
• Vacancy Rate: The current vacancy rate is 9%, which is down from the 10-year average of 10%.

Investment Volumes

• Investment Volumes: Investment volumes over the past 12 months reached £0.0 million.
• Investor Types:
  • 71% of investments came from private investors.
  • 29% came from public sector investors.

Prime Market Metrics

• Prime Rent: The prime rent is £32.00 per sq ft.
• Prime Yield: The prime yield is 7.50%.

Demand Activity

• Sector: The most active sector is professional services.
• Demand: The demand activity remains robust, indicating strong market interest.

Headline Transactions

• Transaction: One notable transaction involved Building One Strawberry Lane.
  • Price: £32.00 per sq ft.
  • Size: 4,521 sq ft.
  • Occupier: Royal Haskoning DHV.

Forecast and Outlook

• End Forecast: The end-of-year forecast for prime office space is optimistic.

• Total Return: The expected total return over the period 2024-2028 is 5.0% (annualized).

• Prime OOT Yield: The prime out-of-town yield is 8.00%.

• Vendor Note: All figures for the city centre are noted to be specific to the central area.