Prime rents surge to new heights

Prime office rents across the regional Big Ten markets grew 5.4% year-on-year on average in Q1 2026 as demand for best-in-class assets persists. This was led by record rents for the regions being set in both Birmingham and Bristol at £52 per sq ft. New-build offices currently under construction across Bristol, Leeds and Manchester are now quoting upwards of £55 per sq ft.

Leasing demand robust in Q1, driven by larger deals

Big Ten city centre take-up reached 1.1 million sq ft in Q1 2026, in line with the five-year Q1 average. This was driven by an increase in larger deals, with the 25,000+ sq ft size bracket accountable for a 41% share of total Q1 take-up (the highest share since 2019). This was led by two major deals from government departments, both exceeding 100,000 sq ft, and a handful of sizeable deals across the professional services sector. Looking ahead, there are numerous large requirements active across regional cities but a shrinking supply of high-quality Grade A office space to meet these requirements.

Investment picked up, led by owner occupier deals

Regional office investment reached £485 million in Q1, reflecting a 44% year-on-year increase albeit remaining 22% down on the long-term Q1 average. This pick-up in activity was led by larger lot sizes (£50m+) and driven by two key owner-occupier deals in Manchester and Bristol.

The case for prime regional offices continues to look positive with pricing now stabilised at cyclical lows coupled with strong rental growth projections as demand continues to outstrip supply. That said, the challenging macroeconomic backdrop and reversal in interest rate expectations is likely to result in continued caution amongst some investors.

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