The UK office market has plenty of hidden gems if you know where to look

On the surface, the UK office market appears under pressure. Recent data from Altus Group for Q1 2025 suggested that – despite a 0.9% quarter-on-quarter increase in UK office values – there has been an overall 6.4% decline over the past three years, with far greater declines in some areas, and valuations still lagging significantly behind true market value, given the lack of transactional evidence.

While technically accurate, any investors looking at these figures could come away with a perspective that doesn’t match the opportunities that can be found in the market today. That’s because the UK office market is far from uniform.

It is a patchwork of sub-markets shaped by location, occupational demand, asset quality and functional obsolescence. The headline decline often acts as a universal gauge of market health, but it mainly reflects limited transactional activity and shallow liquidity in many regional cities, where valuations are often estimates rather than true market prices. Some areas have likely seen steeper price falls – with valuations that may not fully capture actual price falls due to sparse trading values – but the full picture will only become clear as market activity increases.

However, there are clear signs of recovery visible in London’s West End, select parts of the City, and in major regional hubs. These prime locations continue to attract strong occupier demand, supporting long-term investor confidence.

Occupier behaviour is evolving. It’s no longer just about returning headcount, but about strategic space commitments. Squarepoint Capital’s pre-let of 404,000 sq ft at 65 Gresham Street tripled its London footprint, signalling long-term confidence. US law firm McDermott Will & Emery has quadrupled its Mayfair presence. These are not reactive moves; they are deliberate, forward-looking decisions.

This trend is echoed by major occupiers like Amazon, HSBC, Linklaters and BP, who are expanding in locations aligned with talent, ESG goals and amenity rich environments. For landlords in central London and key regional hubs, the challenge is shifting from attracting demand to meeting it.

Office attendance data supports this shift. Remit Consulting’s Return Report shows UK occupancy at post-pandemic highs. British Land reports mid-week occupancy in its central London offices has returned to pre-Covid levels. While Mondays and Fridays remain quieter, consistency from Tuesday to Thursday reflects a new workplace norm.

Vacancy rates in prime areas are easing, and early leasing activity for 2025 is already ahead of last year. The market is clearly bifurcating. Grade A space in prime locations is attracting tenants and capital, while older, secondary stock faces mounting pressure on rents, occupancy and relevance.

Investors are responding. Conversations with global capital from US private equity firms to Middle Eastern family offices show a clear shift in focus. Attention is no longer on the UK office market as a whole, but on specific buildings and strategies aligned with long-term demand.

Understanding this polarisation is critical. London’s West End and thriving regional hubs continue to attract tenants and global capital, while outdated offices in secondary locations struggle with high vacancy and weak rents.

Macroeconomic uncertainty remains a concern, prompting caution around capital deployment and exit strategies. However, the UK’s market agility and relatively fast repricing process continue to draw interest. Unlike many European markets that can take years to adjust, the UK’s speed of repricing helps bridge the gap between buyers and sellers, albeit there is still further pricing discovery required before momentum will fully return in the capital markets.

At TriOffice, we do not chase broad trends. We target undervalued assets where location, ESG potential and tenant demand combine to create lasting value. With office construction at a 15-year low, high-quality space will become scarcer, further strengthening the investment case in the next cycle.

Challenges remain, but fundamentals are strengthening in key sub-markets. For investors willing to look beyond the headlines, the opportunity is not just coming – it is already here.