Refurbishments will make up 38% of all speculative office space delivered in UK regional cities over the next three years, according to Savills.
Sustained demand for offices has pushed up the need for refurbished space, which accounted for a quarter of Manchester’s prime take-up in 2016, amid caution around speculative development.
Refurbished office rents in Bristol have risen by 51% in the past five years from £18.50 per sq ft to £28 per sq ft as a result of increased dependence on secondhand stock. Since 2012, the difference between refurbished and new-build rents fell from £9.50 per sq ft to £0.50 per sq ft.
Jon Gardiner, head of national office agency at Savills, said: “It is widely accepted that the UK regions are currently at their lowest levels of grade-A availability on record, which has reduced the relative risk of refurbishment projects.
“In a time where returns will be income-led, we are seeing more of a ‘flight to quality’ as landlords comprehensively refurbish secondary space in order to attract and retain tenants.”
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