Take-up of office space in Greater London and the South East bounced back strongly in Q1 2025, fuelled by activity from larger occupiers, according to new data from Savills.
In the first quarter of the year, take-up hit 909,000 sq ft – a 38% increase on Q1 2024 and 26% above the five-year average. The quarter saw a significant increase in leasing activity from larger occupiers, with 16 deals of more than 20,000 sq ft recorded – 93% up on the five-year average.
Grade A office space accounted for 81% of take-up, which helped boost rental growth in Basingstoke, Chelmsford and Borehamwood, all of which achieved double-digit increases.
The most active business sector in Q1 was manufacturing and industry, which accounted for 36% of all space leased, followed by property, development and construction (18%) and insurance and financial services (8%).
The largest deal recorded in the quarter was GCAP signing for 155,000 sq ft across two buildings in Reading followed by Reckitt Benckiser agreeing to take 55,000 sq ft of space at 6 Roundwood Avenue at Stockley Park, Uxbridge.
Andrew Willcock, head of Greater London and South East office agency at Savills, said: “[It has been] an encouraging start to 2025, with corporate occupies taking swift action to secure the scarce supply of high-quality properties on the market. Although recent geopolitical tensions have led economists to predict slower economic growth, which could affect demand, the ‘war for talent’ and subsequent flight to quality is still largely driving demand, with the limited supply expected to sustain prime rental growth.”
Robert Pearson, director in the UK tenant representation team at Savills, added: “Momentum in the South East office market continues to build, particularly among larger occupiers seeking high-quality, well-connected space. The return of 20,000 sq ft+ transactions at pace reflects renewed business confidence and long-term strategic planning.
“Despite broader economic headwinds, demand for best-in-class space remains resilient driven by talent attraction, ESG requirements, and the desire to create workplaces that support both productivity and culture. In today’s market, early engagement and clarity of brief are key to securing the right space in a supply-constrained environment.”
