OCCUPIER and investor confidence is riding high, according to the latest Northern Powerhouse Office Market Report from commercial property consultancy Lambert Smith Hampton (LSH).

The report shows strong performance across the eight key markets so far in 2015, with combined take-up expected to reach 5.2m sq ft by the end of the year, compared with 4.6m sq ft in 2014, and 30 per cent above 10-year average.

Newcastle city centre is on course for a strong year of occupier activity, boosted by an impressive third quarter, with take-up reaching 107,819 sq ft, the strongest for five years.

In the final quarter, take-up is forecast to reach approximately 270,000 sq ft, 40 per cent above the ten-year annual average and close to 2013’s record performance.

Neil Osborne, of LSH Newcastle, said: “Confidence within Newcastle’s office market remains high as the city continues to outperform the 10-year average. Alongside other cities such as Leeds, Liverpool, Manchester and Sheffield, the Northern Powerhouse is undoubtedly in a strong position.

“With a rise in the number of London-based companies looking to rebalance their regional operations, largely to avoid the rising costs of the Capital, it bodes well for sustaining the Northern Powerhouse initiative in the coming months and years.”

A number of prominent deals in Newcastle city centre have boosted activity.

In Q3, Ubisoft signed a lease of 17,000 sq ft at Haymarket Hub. The largest deal of 2015 to date remains iParadigms’ 19,904 sq ft lease at Wellbar Central in Q1.

Both buildings were grade A quality, bringing the total grade A take-up for the first three quarters of the year to 85,739 sq ft, the highest recorded for this period since 2010.

The out-of-town market is also set to out-perform the 10-year average by over 40 per cent and is expected to reach a take-up of almost 530,000 sq ft by the end of the year.

These figures are largely on the back of existing tenants requiring additional space, as confidence in the economy has improved.

Investment sentiment remains positive towards the end of 2015, with office investment volume in the first three quarters currently standing at £90m, already surpassing 2014’s total.