Soaring demand causing lack of quality office space in city

Developers will have to move quickly to get their hands on Grade A space in Hull, after 2011 saw the largest number of deals completed in the city for more than a decade.

Commercial agents in Hull disposed of around 200,000 sq ft of units across Hull and East Yorkshire last year, up from around 130,000 sq ft in 2010.

However, analysts are concerned that this success has left the city with a major shortage of Grade A space at a time when it is working hard to become the UK’s renewables industry hub.

Plans for the £210m Green Port Hull development, a joint project between Associated British Ports and German manufacturer Siemens, are being recommended for conditional approval, ahead of a meeting at Hull Council on May 9.

Just 11,000 sq ft of top-end space remains available in the centre, at Priority Investments-owned Two Humber Quays, which looks out over the Humber Estuary from Hull’s redeveloped marina.

The 35,000 sq ft building is already home to PwC, Barclays Commercial Bank and accountants Baker Tilly, as well as Chameleon Business Interiors.

Mike Slaven, the senior asset manager at Priority Investments, said interest in the remaining units at Two Humber Quays was high.

He said companies considering establishing a base in Hull should act quickly before the supply dried up completely. Mr Slaven said: “There is now just 11,000 sq ft of Grade A office space left in the city centre and this is already the subject of a number of high quality enquiries.

“The situation is going to cause difficulties for the city because when Siemens finally rubber-stamps its plan to build a wind turbine manufacturing plant on Alexandra Dock, we are likely to see an influx of supply chain companies and companies associated with the renewables industry wanting to move here.

“However, without any speculative development, the city simply won’t be able to support them with high quality accommodation and that could have serious consequences for inward investment and Hull’s long-term plans for growth.

“Two Humber Quays is perfectly situated for companies wanting high quality space near to the estuary and the docks, but they will have to move quickly to secure it as once it has gone there is nowhere else left.”

Mr Slaven added: “Hull has got some huge opportunities ahead of it. It would be a shame if it wasn’t able to take full advantage of them because of a lack of quality infrastructure.”

Hessle-based commercial agents PPH Commercial, which acts on behalf of Priority Investments for Two Humber Quays, disposed of 60,000 sq ft of office space in Hull and East Yorkshire in December 2011 alone, with major city centre deals completed at Marina Court (18,000 sq ft) and Brewery House (17,500 sq ft) and Dunedin House (3,000 sq ft).

Partner Nick Pearce said 2011 had seen strong demand for 10,000 to 20,000 sq ft units in Hull for companies that were either expanding or needed a city centre location.

He warned there was very little likelihood that further large units would come on the market in the short or medium term.

He said: “There is now nothing likely to come up of that size and quality and there is nothing being built, which is a concern. With that, and the ongoing economic turmoil, 2012 could be a very different year to 2011.”

Mr Pearce said he viewed the months ahead with some optimism, as the first quarter of 2012 had seen an increased demand for smaller properties.

“Enquiries for start-up office units and grow-on space have improved which is encouraging,” he said. “But that doesn’t solve the problem of a lack of high end offices in the city centre.”