Leasing Demand Remains Robust In Q3
Leasing activity across the regional Big Ten markets remained strong in Q3 2025, with total take-up reaching 1.2 million sq ft. This pushes year-to-date activity above the five-year average and close to the long-term trend.
Many markets appear to have turned a corner from the downsizing phase seen in recent years and are now experiencing an uptick in expansion requirements, despite the uncertain economic outlook. Much of this activity is being driven by law firms and professional services companies securing upgraded relocations.
Early Q4 indications suggest a further pick-up in leasing activity in the final quarter, following a handful of larger deals under offer and expected to complete imminently.
Prime Rental Growth Endures
Despite multiple new development starts in Q3 2025, the supply of new-build Grade A office space across the regions remains increasingly scarce.
In turn, prime office rents continue to surge. In Q3, average Big Ten prime rents increased 6.5% year-on-year, with further growth expected before year-end for most regional markets.
Prime office rents surged 6.5% year-on-year after another strong quarter of leasing activity and demand strongly in favour of best-in-class Grade A space.
Occupational Versus Investment Dislocation
Despite the relatively strong occupational market and outlook, UK regional investment remains subdued.
Investment volumes in 2025 year-to-date reached c.£1.0 billion, marking a slight improvement on the same period last year. While private property companies remain the most active buyers in the market, it is overseas investors who have increased their share of investment the most this year-to-date, to 27.5% (2024: 20.6%).
Prime yields remain unchanged at c.7.00%, however, an increase in prime assets being brought to market will improve core price discovery in the coming months.
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