Occupiers have expanded headcount and upgraded their accommodation as business sentiment has improved, which has helped propel take-up in markets up and down the country: Edinburgh reported record activity; Manchester enjoyed its best year since 2001; Oxford, Cardiff, Bristol and Cardiff all posted take-up well ahead of their 10-year averages.
Speculative development returns
Renewed economic optimism has also fuelled the meaningful return of speculative development outside of London, with the amount of space under construction in the regional centres doubling since the end of 2013. Manchester, Edinburgh and Bristol are also leading the way here – although it is worth noting that we are considerably shy of the levels seen at similar points in previous cycles.
Investors target the regions
A similar picture emerges when we look at investor activity. Office investment in the regions climbed by 22% last year, yet was down slightly in Central London.
Many regional markets have also seen a significant amount of office stock leave the market for conversion to other uses. Our research reveals that approaching 8m sq ft of office stock has left the regional markets in the past two years, with locations such as Bristol, Slough, Watford and Hemel Hempstead all experiencing a considerable net loss of space.
A new role for offices
Interestingly, the office space that remains is being used in ways that will have been unthinkable to all but the most progressive employers as recently as ten years ago. Occupiers are becoming ever more discerning regarding their offices, using them to create varied and stimulating working environments designed to enhance staff wellbeing and provide a means to communicate the culture of the business to both employees and clients.