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Demand for high quality office space remains resilient finds latest CBRE UK Office Market report

Office take-up across the UK office market in the first half of this year increased by 24 per cent from H1 2021, according to the CBRE UK Office Market Figures for the second quarter of 2022.

Take up for office space in the UK totalled 1.1m sq ft in the second quarter of 2022 and demand for high quality office space remained resilient, with four of the five largest deals during the quarter taking place in new or early marketed space. The largest was of GPA Capital pre-let of 130,000 sq ft at First Street in Manchester [pictured].

Business services have been responsible for the largest share of take up in the last 12 months, (22 per cent), followed by the creative (19 per cent) and professional industries (17 per cent).

Availability across the UK markets fell marginally by -1 per cent in the second quarter, keeping it 26 per cent above the five-year quarterly average of 14.6 sq ft. however, the supply of new space remains constrained, representing just 14 per cent of quarterly supply. A total of 2.0m sq ft of development space has been completed across the UK markets in the 12 months to June 2022, 65 per cent which was let by the end of the quarter. There is currently 1.7m sq ft under construction and due to complete during the second half of 2022.

Central London take up totalled 3.8m sq ft in the second quarter, the strongest for leasing activity since 2018. Take up was up 24 per cent on the ten year quarterly average and over double of the second quarter of 2021.

Demand for high quality space was strong, with the banking and finance industries the most active (44 per cent combined). The professional sector was the next most acquisitive (18 per cent) followed by business services (14 per cent). Central London supply fell to 24.2m sq ft in the second quarter, the lowest level since the end of 2020.

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