City centre office leasing activity in the ‘Big Six’ regional markets rose by 26% last year, according to the latest data from Savills.
Full year activity in Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester reached 4.36m sq ft – the highest full year take-up since 2019 and 15% above the five-year average. Leasing activity was strong throughout the year, but the full year figure was boosted by a 38% increase in Q4 deals compared with the same period in 2023.
Bristol (+5%), Birmingham (+21%), Edinburgh (+70%), Glasgow (+42%), Manchester (+29%) and Leeds (+0.1%) all recorded take-up growth in 2024. Activity in Edinburgh was boosted by the 282,000 sq ft letting to Lloyds Bank at Port Hamilton in Q4, which was the largest deal of the year.
In total, there were nine deals of more than 50,000 sq ft in 2024 – 25% higher than the five-year average number of deals above 50,000 sq ft – including BNY Mellon signing for 197,000 sq ft at 4 Angel Square in Manchester (pictured).
There was also an increase in investor activity in the Big Six regional office markets, with the £2.9bn transacted in 2024 representing a 10% rise on 2023. However, activity remains subdued with volumes 50% below the five-year average.
James Evans, head of national office agency at Savills, said: “A 26% increase in take-up year on year is an impressive performance for the regional office market, bringing total take-up to its highest point since 2019. Despite these encouraging numbers, there remains some caution as businesses digest the impact of the Autumn Budget. However, dwindling supply of high quality office assets means that rental inflation and competition for space is starting to bite.”
Mark Walsh, from the global occupier services team at Savills, added: “There is a clear preference for high-quality spaces with businesses prioritising well-located, sustainable offices to attract and retain talent. The way occupiers use their space has also evolved to incorporate more flexibility with multi-use spaces and an increase in amenity offering. There are also increasing signs, as the availability high quality offices continue to decline, that occupiers are working with landlords to upgrade their existing spaces to meet their evolving needs.”
James Emans, joint head of UK investment at Savills, said: “Investment volumes remain low compared with historical figures, but we are now seeing signs of investor confidence returning evidenced by the increase in deal activity increasing year on year. There is some caution as we enter 2025, but opportunistic investors are proactively seeking out assets with good fundamentals that have inevitably been re-priced. This thesis is supported by the ongoing positive occupational story and limited development to meet this demand.”
