Savills Reports 26% Growth in UK Regional Office Market Take-Up in 2024 Amid Rising Competition and Limited Supply

Savills Reports 26% Growth in UK Regional Office Market Take-Up in 2024 Amid Rising Competition and Limited Supply

(IN BRIEF) The Big 6 regional office markets in the UK, which include Birmingham, Bristol, Edinburgh, Glasgow, Leeds, and Manchester, experienced a 26% year-on-year growth in city centre office take-up, totaling 4.36 million sq ft in 2024. This marked the highest take-up since 2019 and a strong finish to the year, with Q4 showing a 38% increase compared to the previous year. Major transactions included Lloyds Bank’s 282,000 sq ft lease at Port Hamilton and BNY Mellon’s 197,000 sq ft letting at 4 Angel Square. Rents are rising due to limited availability of Prime and Grade A office space, while competition intensifies. Investor confidence has also increased, with £2.9 billion transacted in 2024, although larger deals remain rare.

(PRESS RELEASE) LONDON, 28-Jan-2025 — /EuropaWire/ — According to international real estate advisor Savills, the Big 6 regional office markets (Birmingham, Bristol, Edinburgh, Glasgow, Leeds, and Manchester) saw impressive growth in city centre take-up during 2024, with a total of 4.36 million sq ft taken up, marking a 26% year-on-year increase. This figure represents the highest full-year take-up since 2019, significantly surpassing the five-year average by 15%. Notably, Q4 take-up surged by 38% compared to the same period in 2023, underscoring a strong finish to the year.

All six regional office markets posted positive growth, with Edinburgh leading the pack, up 70% from the previous year. This remarkable rise was largely due to a record Q4, which saw Lloyds Bank secure the year’s largest deal with a 282,000 sq ft letting at Port Hamilton. Other major deals included BNY Mellon’s 197,000 sq ft lease at 4 Angel Square in Manchester and Aston University’s 189,000 sq ft agreement at 10 Woodcock Street in Birmingham.

In total, nine deals over 50,000 sq ft were completed in 2024, representing a 25% increase from the five-year average. However, the supply of Prime and Grade A office space remains limited across all six markets, leading to increased competition for high-quality office space and driving up rents.

James Evans, head of national office agency at Savills, commented, “A 26% rise in take-up is an impressive result for the regional office market, bringing total take-up to its highest level since 2019. While businesses remain cautious in light of the Autumn Budget, the tightening supply of prime office space is already pushing rental inflation and intensifying competition for space.”

Mark Walsh, from Global Occupier Services at Savills, added, “Businesses are showing a clear preference for high-quality, well-located, and sustainable office spaces to attract and retain talent. We’re also seeing occupiers adapt their spaces to incorporate more flexibility and multi-use areas, with increased amenities. As the availability of prime office spaces dwindles, many occupiers are working with landlords to upgrade their current offices.”

In terms of investment, Savills reports a positive trend in regional office market transactions, with £2.9 billion transacted in 2024—up 10% from the previous year. While overall activity remains subdued compared to historical averages, with volumes 50% below the five-year mean, investor confidence appears to be recovering. Notably, there has been a 29% increase in the number of deals, though larger transactions remain scarce, with only two deals exceeding £100 million—Cody Technology’s sale and leaseback and the sale of Abcam’s headquarters to Danaher Corp.

James Emans, joint head of UK investment at Savills, remarked, “Investment volumes are still low relative to historical levels, but we’re seeing encouraging signs of investor confidence. Opportunistic investors are increasingly looking for assets with strong fundamentals that have been re-priced, supported by positive leasing activity and limited new developments to meet demand.”

Media Contacts:

James Evans
Head of National Office Agency, Office Agency
+44 (0) 161 236 8644

James Emans
Director, UK Investment
+44 (0) 20 7409 8132

SOURCE: Savills