The UK regions witnessed a bumper final quarter with take-up reaching 2.4 million square feet, the strongest quarter since Q2 2015.
Savills notes that the same level of occupational demand was recorded during the first and second half of the year, with no post-referendum slowdown evident.
According to their latest Regional Office Market Spotlight, take-up in the UK regions, excluding London, surpassed the long-term average of 9.1 million sq. ft. and hit 9.6 million in 2016.
Leading the outperformers of 2016 were Bristol and Cardiff, which recorded take-up improvements of 42% and 10% respectively on 2015’s levels, with Cardiff achieving its highest take-up in 15 years.
Research shows that the most active business sector of 2016 in the was the insurance and financial services sector, accounting for 15% of space taken, which marked a record year. The tech sector also remained an important contributor to take-up during 2016, accounting for 20% of the number of transactions.
Clare Bailey, associate director in the commercial research team at Savills, comments: “There are currently more than 8 million sq. ft. of known lease expires across the UK regional markets over the next five years, which is going to lead to an underlying demand for new space.
“With supply at its lowest level on record and limited speculative development, the pipeline is set to decrease dramatically, leading to an increase in refurbished space across the UK.”
Savills predicts that 2017 total regional office take-up will see a 3% rise on last year, due to several large unfulfilled requirements in the market. Bristol is expected to see take-up growth of 31% on the five-year average.