Despite wavering economic growth, improving demand for office
space in key regions of the UK is providing a welcome boost for the
commercial property market.

Total office space take-up volumes across six key markets,
Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester was
up four per cent in 2012, and is expected to develop further,
according to Jeremy Richard, director at Jones Lang LaSalle:

"Consumer income is reviving and as a result, regional
office employment is expected to pick up from 2014 onwards leading
to an increase in demand for office space. Take-up volumes across
the Big Six markets totalled 3.2 million sq ft in 2012, up 4 per
cent compared to 2011."

This growth is particularly impressive when compared to London and the South
East, whose poor take-up volumes have dented overall UK-wide
investment. Lower cost of rents in regional areas has made them
particularly attractive for businesses, particularly those from
overseas, according to Simon Merry, director in Jones Lang
LaSalle's National Office Investment team:

"Investment volumes were down significantly in 2012, but
there is expanding market activity in the regions given its
relative pricing when compared with London and the South-East and
other Cities worldwide.

"In 2012, overseas investors accounted for over 60 per cent
of all investment transactions and we are increasingly witnessing
global money targeting the regions and a strong motivation to
buy."

Mark Wilson, Director of Capital Markets, Jones Lang LaSalle,
said:

"With prime regional office yields now offering between
250/300 bps margin over other locations within the UK it is
anticipated that there will be considerably more UK institutional
activity during 2013.

"Furthermore with encouraging occupational sentiment and
attractive running yields we expect demand from
property/opportunity funds to be a major influence over the course
of the next 12 months."

Despite the total number of deals within the regions rising,
there has been variation from region to region: Edinburgh performed
the best, with Grade-A take-up volumes up 60 per cent year on year;
Bristol, in contrast, performed particularly badly, with its
Grade-A activity falling 80 per cent.

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