CoStar 50 Activity Index highlights office demand hotspots

By Grant Lonsdale - Wednesday, March 28, 2018 9:39

Now in its second year, the CoStar 50 Activity Index captures office occupier and investment activity across the 50 largest UK cities/towns (by the amount of office stock).

The ranking system measures demand and liquidity by comparing net absorption and investment volume in each city/town during the last calendar year, relative to its stock size and peers. CoStar is uniquely placed to perform this analysis, drawing on its market-leading database of all commercial property across the UK.

Several key themes stood out in 2017’s occupier index, which looks at net absorption relative to stock.

 

  • Demand from flexible workspace providers both in and outside of London was a major theme of 2017. So it is perhaps unsurprising that many of those cities targeted by the likes of WeWork, Spaces, and Instant Offices fared well in our occupier index. Indeed, Reading, Manchester, Central London, and Brighton all ranked highly.
  • The rapid growth of the tech sector has led it to become a key driver of office demand in recent years, and many of the best performing cities were those with strong technology credentials. Cambridge, for example, benefited from Amazon’s expansion into the newly constructed One Station Square. Biotech firm Gilead Sciences also quadrupled its presence at Granta Park following its move to the Futures Building.
  • Occupier demand in the North West extended beyond Manchester, with Stockport and Bolton also featuring in the top 10. Stockport’s strong performance was aided by Stagecoach and Music Magpie’s moving to Stockport Exchange, while Bolton benefited from the University of Bolton’s expansion into Bolton Central.
  • Expansions by SSE and HMRC boosted net absorption in both Reading and Croydon, the highest ranking markets in the South East. Reading placed above all other office markets in 2017, while Croydon scored highly again after placing first in 2016’s ranking.
  • The lowest ranking markets were those negatively impacted by large move-outs. For example, Thales, SSE, and Motorola all vacated offices in Basingstoke during 2017. Virgin Atlantic also closed a large office in Crawley, although most of its staff relocated to another site in the town.

 

To view the full CoStar 50 occupier index, as well as the separate investment index, please click here. The index can also be accessed via the Market Insights section under the Analytics tab on the CoStar homepage.

glonsdale@costar.co.uk

Get in Touch
+44 203 205 4600