Aberdeen and Sheffield saw the sharpest movement in yields in 2005, from 7.0% to 6.0% and from 6.75% to 5.75% respectively, according Knight Frank's latest research for ROMP, its online interactive tool which provides detailed market comparisons of all the key regional UK cities from 2002 onwards.

Catherine Penman, head of commercial research at Knight Frank said: "The smaller regional cities continue to offer further potential yield reductions, with the average prime office yield in the larger regional markets standing at 5.5%, which are expected to harden by a maximum of 50 basis points by 2006 year-end."

RETURN OF RENTAL GROWTH

The smaller cities of Newcastle, Sheffield and Aberdeen witnessed significant uplifts in letting activity primarily due to a shortage of good quality stock and active demand levels increasing in the latter part of 2005.

Last year, in line with letting activity, rental levels rose most sharply in these smaller regional cities of the UK. This was due in part to a lack of good quality accommodation, which is becoming an increasingly common feature across many of the regional cities, coupled with relatively low rental levels.

Catherine Penman, added: "Rental growth is projected to improve most sharply within the smaller regional cities of the UK, although with economic confidence forecast to improve in 2006, we anticipate rental growth to be evident across the majority of UK regional cities."

ROMP

Regional Office Market Presentation - is Knight Frank's interactive tool which provides detailed market comparisons of all the key regional UK cities from 2002 onwards. Variables detailed include take-up, availability, vacancy rates, rental levels and prime yields.

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