Refurbishment tasks account for the biggest share of the workplace growth pipeline throughout the UK’s main regional cities, as new construct exercise stays subdued and occupiers proceed to favour prime quality, sustainable area. In response to new figures from Avison Younger, refurbishment schemes now symbolize the vast majority of area below building within the Massive 9 regional workplace markets. The quantity of refurbishment area within the pipeline has risen by 12 p.c yr on yr, reflecting a sustained shift in the direction of upgrading present inventory fairly than delivering completely new buildings.
General growth ranges stay under long run averages. Whereas workplace take up throughout the regional markets has stabilised, the variety of speculative new construct begins has fallen sharply in contrast with pre pandemic norms. Rising building prices, viability pressures and tighter funding circumstances have all constrained exercise. On this context, landlords are specializing in repositioning present property to fulfill demand for Grade A lodging.
The info signifies that occupiers proceed to focus on nicely positioned metropolis centre buildings with robust environmental credentials and prime quality amenity provision. Consequently, older workplaces that don’t meet present efficiency requirements are more and more being refurbished to enhance power effectivity, inner surroundings and total attraction. This method additionally aligns with regulatory pressures and company commitments round carbon discount.
A number of regional markets are seeing significantly robust refurbishment pipelines, together with Birmingham, Manchester and Leeds. In some cities, refurbished area accounts for greater than half of all schemes as a consequence of full over the following two years. In contrast, the amount of recent construct completions anticipated over the identical interval stays restricted, contributing to a constrained provide of prime area.
Headline rents in quite a few regional centres have continued to edge upwards the place demand for greatest at school workplaces exceeds availability. Nevertheless, secondary area with out important funding is dealing with weaker demand and better emptiness charges.
The evaluation means that the present growth cycle will proceed to be formed by refurbishment led supply within the close to time period, with complete new provide throughout the Massive 9 markets forecast to stay nicely under historic averages by to 2027.
