Large-scale speculative office development in central Newcastle is tantalisingly close, as the city’s agents predict a tipping point of needing new, speculative office development is less than four months away.
The 35,000 sq ft first phase of the Clowston Group’s Stephenson Quarter, known as The Rocket, completes shortly and is one of only two new-build grade-A properties in the city centre – the other being 14,000 sq ft at the Live Works building on Quayside, which is also due to complete imminently.
“This could spark a round of activity in the rest of the year as competition for new office premises in the city centre strengthens,” said Patrick Matheson, partner at Knight Frank.
Local sentiment suggests that all of this space is likely to be taken before the end of this year and that the £22 per sq ft quoting rents at The Rocket will be achieved or even exceeded.
Sites tipped as ripe for development activity include Science Central, Strawberry Place, East Pilgrim Street and a possible next phase at the Stephenson Quarter.
However, there is unlikely to be any further development until The Rocket is let, predicted Lambert Smith Hampton’s Neil Osborne. “The key to any site coming forward is funding, if there is no prelet in place. This could come about in a similar way to the first phase of development at Stephenson Quarter where the council took a prelet to enable forward funding.”
Rents will also have to race ahead significantly, local agents point out, if they are to reach the £25 per sq ft needed to make development appraisals stack up.
