Regional Cities See New Rental Highs

LONDON-Edinburgh remains the most expensive office location outside London, with prime office rents in the Scottish capital reaching £28 ($40) per sf according to a new survey of regional office rents from Knight Frank. And Birmingham now boasts the second highest rents following a deal at the prime Brindleyplace development where £25 ($35.75) per sf was achieved.

Over the 12 months to June 2001, the average office rental growth in the 12 regional centres analysed by Knight Frank was 7.4%. Leeds experienced the strongest growth at almost 14%. Newcastle followed shortly behind with growth of just over 11% with Glasgow, Cardiff and Manchester all experienced rental growth of 9% over the last year.

The bulk of the growth was experienced during the latter half of 2000, although the sudden market downturn seen in London and the South East has not yet spread to the regions, claims Knight Frank. In most of the main UK regional cities historically low levels of availability and development activity mean there is still upward pressure on rents.