Newcastle will have the lowest demand for additional office space in the 10 years to 2026, according to analysis of the impact of Brexit on major UK cities by the British Council for Offices.
The city will see demand for an additional 370,000 sq ft, based on research which applied Oxford Economics employment forecasts to existing office stock. The forecast is partly due to its reliance on the public sector, which is expected to shrink by a further 6% nationwide in the next decade due to the government’s austerity regime.
Manchester will have the highest demand outside of London, at 5.7m sq ft; with Birmingham, Bristol, Edinburgh, Glasgow and Leeds all requiring between 1.5m sq ft and 2.5m sq ft over the next decade as cities with strong office sectors continue to out-perform their peers. The more peripheral office markets, in Scotland, Wales and the north east will be challenged, the research found, but this will happen irrespective of Brexit. In terms of Brexit-specific impact, so much depends on the outcome of negotiations, particularly as they relate to financial services and London’s role as a global, and Europe’s, financial capital.
The BCO notes that forecasts for office jobs have improved since initial fears after the EU referendum, but suggests the UK is likely to suffer more from jobs foregone to the eurozone than from direct loss of jobs. Overall, the number of office economy jobs in London grew by 23.8% during 2007–2017, and is expected to grow at almost half this rate (12.3%) between 2017 and 2027, from 2.6m to 2.9m.
Cities with lowest demand for additional stock 2016-2026:
- 4% Newcastle
- 5% Liverpool
- 7% Sheffield
- 7% Cardiff
- 8% Birmingham
Source: Oxford Economics
Office demand by city 2016-2026 (highest to lowest)
| City | Office employment 2016 (x1000 jobs) | Office employment 2026 (x1000 jobs) | Change 2016-2026 (x1000 jobs) | Additional demand (sq ft) |
|---|---|---|---|---|
| London | 2558.3 | 2865.2 | 306.9 | 36700000 |
| Manchester | 446.4 | 494.5 | 48.1 | 5700000 |
| Leeds | 192 | 212.8 | 20.8 | 2500000 |
| Glasgow | 163.9 | 178.6 | 14.7 | 1800000 |
| Birmingham | 174.8 | 188.9 | 14.1 | 1700000 |
| Edinburgh | 139.5 | 152.9 | 13.4 | 1600000 |
| Bristol | 109.8 | 122.3 | 12.5 | 1500000 |
| Reading | 51.4 | 58.3 | 6.9 | 820,000 |
| Cardiff | 83.1 | 89.4 | 6.3 | 750000 |
| Coventry | 53.8 | 59.4 | 5.6 | 670,000 |
| Sheffield | 77.1 | 82.7 | 5.6 | 670,000 |
| Liverpool | 74.7 | 79.3 | 4.6 | 550,000 |
| Cambridge | 38.4 | 42.6 | 4.2 | 500,000 |
| Oxford | 32.4 | 36.1 | 3.7 | 440,000 |
| Newcastle | 67.5 | 70.6 | 3.1 | 370,000 |
Source: Oxford Economics
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