As experts delve into U.K. office market data for Q1 2024, it’s evident where and how businesses operate is changing.
Central London, traditionally the heart of U.K.’s corporate office space, is seeing a notable decline in office take-up, with a 16% drop compared to Q1 2023, and a 37% decrease from the ten-year quarterly average.
According to a recent report published by CBRE, the market is experiencing a trend towards more premium, strategically located spaces — catering to the needs of modern businesses, despite an overall decrease in office take-up of 8% year-over-year.
The movement reflects how companies are reevaluating their need for traditional office spaces in high-cost central city areas. However, prime rent in London’s West End remains high at £155.00 per square foot, demonstrating a steady demand for top-tier office environments in central business districts.
Moving outside of London, CBRE’s data on the office market paints a different picture. Cities like Liverpool and regions such as the South East of England have seen remarkable increases in office take-up, both up by 121%.
This growth is reportedly driven by rising demand for “best-in-class” spaces, as highlighted by major deals like BBC Studios Productions acquiring 84,000 sq ft at Typhoo Building in Birmingham and a major lease by University College Birmingham for 44,700 sq ft at Baskerville House.
Both transactions reflect a broader market preference for newly developed or extensively renovated spaces that offer advanced facilities and sustainability features.
Q1 figures in areas like the Docklands, however, continue to struggle year-over-year. While the high availability in the area fell, there was a notable decline in take-up rates (-18%). Aberdeen also recorded a high Q1 availability rate of 22.4%, and a year-over-year take-up rate of -41%, indicating a surplus of office space in the market.
This contrasts with tighter conditions in the South East where the availability rate is at 9.4%. Likewise, areas like South Hampton and West End also boast relatively lower availability rates at 7.8% and 7.0%, respectively.
The data also shows how the U.K. market is being influenced by disparities in prime rent values and the strategic decisions of businesses seeking cost-effective areas — particularly in a post-pandemic era where offering flexibility and cost management are important factors in the workplace.
