Office take-up in the UK’s ‘big six’ regional markets fell 15% to 3.4m sq ft last year as occupiers prioritised higher quality space and hybrid working-driven flexibility, according to the latest data from Savills.
However, there was a flurry of activity in Q4 in the cities – Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester – with take-up hitting 932,000 sq ft, up 4% on Q3 2023. Bristol, Birmingham, Leeds and Edinburgh all reported growth in Q4. The biggest letting in the final quarter was Dyson acquiring 66,000 sq ft at 1 George’s Square in Bristol (pictured).
Birmingham recorded its highest Q4 take-up total since 2019, reaching 240,000 sq ft. In terms of full year take-up, Leeds saw its highest take-up since 2019, largely due to Lloyds Bank’s 124,000 sq ft letting at 11 & 12 Wellington Place.
Edinburgh (12%), Manchester (8%), and Glasgow (3%) all reported rental increases in 2023 with demand for prime stock outstripping future development pipeline.
James Evans, head of national office agency at Savills, said: “While there have been some pockets of positivity, overall take-up across the regional office markets was down compared to 2022 which is partly a consequence of occupiers rightsizing as well as inevitable pressures associated with the economic cycle. The UK office leasing market saw positive momentum building with Q4 2023 take-up up 4% on the previous quarter.
“As we look to the year ahead, we can see there are significant requirements for prime offices in most regional markets and this, in turn, will continue to drive rental growth. The major barrier to further take up acceleration will be wider economic challenges that may stifle decision making particularly where significant capital expenditure is required.”
Mark Walsh, EMEA head of corporate account management, global occupier services at Savills, added: “We’re seeing many occupiers having a clearer understanding of their real estate requirements post-Covid. Businesses continue to focus their leasing requirements on Grade A offices which have excellent ESG credentials. This has been driven by the desire to satisfy employee needs and ensure staff return to the office in addition to supporting wider corporate sustainability ambitions.”
