The higher education sector has cemented its position as a key occupier in the UK office market, with leasing activity reaching decade highs in 2024, and is set to accelerate further in 2025.
Leasing activity in key UK cities exceeded 650,000 sq ft in 2024, up 19.5% year-on-year and outperforming the ten-year average by 55.9%. This marks the highest levels since BNP Paribas Real Estate records began back in 2013. This has been driven by demand across the regional Big Ten markets, with higher education leasing activity accountable for a 9.5% share of total office take-up in 2024.
One key driver behind higher education growth is the continued expansion of satellite campuses, with a growing number of regional universities establishing London outposts to boost international demand. The firm’s research found that, among a sample of ten universities, non-EU international enrolment increased by 58.1% in the three years following the opening of a London campus - significantly outpacing the UK-wide average growth of 17.4% over the same period.
This aligns with strong demand for UK higher education, as UCAS applications for the January 2025 deadline surpassed 600,000, boosted in part by record levels from Chinese and US applications (up 8.9% and 11.7% respectively). As international student numbers grow, universities are seeking to strengthen their presence in locations with strong global connectivity.
Josh Arnold, Regional Office Markets Research at BNP Paribas Real Estate commented: “As the higher education sector continues to face headwinds, driven by inflationary pressures, Brexit, and the tuition fee freeze, we are seeing that many institutions have responded by outlining varying strategies to overcome these obstacles, which, for some, has included strategic growth plans.
“The higher education sector’s increasing footprint in the office market is helping to transform city centres. With significant levels of vacant Grade B office space, universities are capitalising on the opportunity to expand their estates efficiently, while reinforcing their presence in key urban locations. This is not only enhancing the vibrancy of city centres but also supporting economic activity by driving footfall and demand for local services.”
Birmingham
Birmingham was the most active regional market in 2024, with higher education institutions securing nearly 315,000 sq ft of office space - over half of total higher education take-up regionally. Aston University and University College Birmingham were among the most acquisitive, completing major transactions to accommodate expanding student populations and evolving learning environments.
Simon Robinson, Head of Birmingham at BNP Paribas Real Estate added: “Higher education institutions continue to play a significant role in the regional office market. Universities in strong financial positions are actively expanding their portfolios, particularly in subject areas with high international demand, such as business, law, and medicine. With Birmingham’s reputation as a higher education hub continuing to grow, we expect further leasing activity as institutions execute their long-term expansion strategies.”
London
Demand for well-positioned office space from higher education institutions remains robust in London, particularly in fringe locations where institutions benefit from availability of supply, coupled with competitive rental values.
Ben Thomson, Head of Central London Tenant Representation at BNP Paribas Real Estate commented: “We’re seeing growing demand from universities seeking to establish a London presence, particularly in emerging hubs such as Canary Wharf and Stratford. In Canary Wharf alone, 19% of office take-up between 2022 and 2024 was accounted for by education services, highlighting the sector’s increasing influence on the capital’s leasing landscape.”
BNP Paribas Real Estate research has found that over two-thirds of available office supply in major UK cities is classified as Grade B space. Universities are well-positioned to repurpose existing stock, supporting their estate strategies while breathing new life into underutilised buildings.
As demand for UK higher education continues to rise, the sector’s role in the office market is set to expand further -presenting new opportunities for landlords, investors, and policymakers to engage with educational institutions as a driving force in the urban economy.
The findings are detailed in the firm’s Capitalise on the Future | Higher Education report.
