Strong Q1 Leasing Demand
Take-up in Q1 2025 across the Big Ten regional office markets reported its strongest opening quarter since pre-pandemic (Q1 2019). Total city centre leasing activity reached 1.32 million sq ft, reflecting a 24.3% year-on-year uptick and exceeding the ten-year Q1 average.
Following the trend set in the preceding two quarters, the completion of larger deals significantly boosted quarterly activity. Three deals over 100,000 sq ft exchanged, accounting for 31.6% of total take-up, and supporting take-up across Manchester, Newcastle and Leeds.
Half of the Big Ten markets reported year-on-year take-up growth in Q1 2025. This was led by Newcastle (exceeding Q1 2024 levels by over six times), followed by Glasgow (140.6%) and Edinburgh (up 51.5%).
Looking ahead, there are a number of key deals under offer and close to completion which should drive robust take-up activity through the next few quarters.
“It’s promising to see ongoing strong leasing demand across the regions amidst broader political-economic uncertainty. The government and higher education sectors remain particularly acquisitive, while requirements from professional services (led by consultancy and law firms) looks set to continue driving demand for upcoming prime office space. The lack of new development starts is pushing attention toward refurbishment opportunities, which are offering moves to improved office space for occupiers while opening opportunities for landlords (or value-add investors) to capitalise on rising Grade A rents”. Simon Williams, Head of National Markets
Flight-to-Quality Persists
Demand for prime office space persists, which has been reflected in both prime rental growth and pre-letting activity. The regional Big Ten markets are beginning to look increasingly constrained when it comes to upcoming new office space. Over 39% of total stock currently under construction has been pre-let (up from 35% in Q4 2024). This figure extends to 45% when taking into account just 2025 expected completions.
As office supply in the pipeline becomes increasingly thin, occupiers seeking relocations to high quality space are having to look further in advance of their upcoming lease events.
In turn, prime rents continue their upwards trajectory, rising 7.0% year-on-year on average, with each of the Big Ten markets expected to see further growth over the course of 2025. Bristol currently leads the way at £48 per sq ft, followed by Edinburgh (£46psf), Manchester (£45psf) and Birmingham (£43psf).
Once prime regional office rents begin to exceed £50 per sq ft, we could start experiencing confidence return in terms of development viability. Until then, there is likely to be an increasing reliance on refurbishment opportunities – which could subsequently spur some confidence from value-add investors and well capitalised existing landlords.
Big Ten Prime Office Rents
