There is more speculative office development on the horizon, according to the latest regional office market report from Savills.
A limited development pipeline, increased tenant demand, a significant lack of grade-A space and rental growth prospects are all factors.
The report finds that the speculative development pipeline is currently 42% up on six months ago, with 60% of the current pipeline located in Edinburgh and Glasgow, where seven schemes totalling 850,000 sq ft are due to complete in 2015 and 2016.
The first half of 2014 saw a marked change in sentiment within the regional office markets. Take-up figures represented an increase of 19% on the same period in 2013, at 4.7m sq ft.
Savills has forecast 2014 office take-up figures will reach 9.2m sq ft – a 3% rise on 2013.
Richard Merryweather, joint head of UK investment at Savills, said: “The improving office occupier market in the UK regional cities, coupled with increased requirement levels, is helping to drive investor demand in this sector, most notably from the UK institutions.”
