Small deals to the fore as office lettings fall

OFFICE lettings in Sheffield fell by a third during 2010, according to new research.

Property consultancy Lambert Smith Hampton said the figure was 256,477 sq ft in 2010, down from 386,000 sq ft the previous year.

Rob Darrington, head of office agency at LSH Sheffield, said that while the market continues to operate at lower levels than those witnessed in 2009, take-up remains above the long-term average of between 210,000 and 220,000 sq ft.

Last year was dominated by small deals with more than 40 per cent of transactions below 5,000 sq ft.

Mr Darrington said: "As landlords continued to reduce rents and increase incentives in order to compete for tenants, these plucky occupiers jumped at the opportunity to secure office space in some of the more prestigious addresses in Sheffield, whereas previously they would have been forced to take-up office space in less desirable locations."

The largest letting to complete during the year was that to law firm Kennedy's at Ventana House. At 16,700 sq ft, the deal was a far cry from the 66,160 sq ft sale of No 2 St Paul's Place to the Department for Schools, Children and Families, in 2009.

But despite the uncertainty surrounding the public sector, government-related departments still accounted for a quarter of all activity.

Bucking the historical trend, which ordinarily sees the city's business park locations fare better in terms of take-up, the smaller city centre market recorded 127,977 sq ft of lettings, accounting for more than half of the total activity.

Mr Darrington said: "The weakened occupier demand for out-of -town locations is reflective of the good value deals currently being offered for high quality city centre accommodation."

He added: "With the majority of tenants ultimately continuing to base their property decisions on very specific location requirements, there are mixed views as

to whether the ring-road

locations will ever truly be able to compete with the more core locations.