Knight Frank: Newcastle offices double international investment in 12 months

Overseas investment in Knight Frank’s Newcastle offices has more than doubled in the past year.

Office take-up has also reached its highest level in three years, according to Knight Frank’s UK Cities Annual Office Review.

It shows take-up of Newcastle’s offices increased by 33 per cent in 2018, reaching 236,928 sq ft - a notable 14 per cent above the 10-year average.

This is in contrast to 2017, when office take-up in Newcastle fell by 19 per cent.

Partner and office head at Knight Frank, Peter Bowden, said: “Despite the overarching uncertainty in the economy, there is still a healthy level of demand in the Newcastle office market - particularly in the smaller size ranges and we expect this to continue through 2019.

“The main issue will be the continued lack of Grade A stock available, with only Lumen at Helix due to bring new space into the market this year.

“With a new headline rent of £24.50 achieved in 2018, we expect rents to increase further in 2019, creating a stronger case for future speculative development.”

The biggest deal in 2018 was 63,350 sq ft lease to HMCTS at the Civic Centre which is the first part of a £1bn reform of courts and tribunals.

Other major deals included Newcastle University acquiring the 14,906 sq ft freehold of Great North House and a 13,606 sq ft lease at Northumberland House.

On the property investment front, total volumes improved in 2018, increasing by 10 per cent on 2018. Domestic investment remained strong - accounting for 58 per cent of volumes.

Overseas money invested in Newcastle offices rose to 27 per cent - from 11 per cent in 2017.