News

Leasing and investment rises in South East offices

News

Tim Burke

10 October 2024

Offices

South East

Office take-up across the South East and Greater London edged up by 2.5% year-on-year during the third quarter, with new and grade A space accounting for the lion’s share of deals.

Knight Frank tracked 866,000 sq ft of take-up during the quarter, compared to 849,000 sq ft for the same period in 2023, with 86% of this being for workspaces in new or refurbished, grade A buildings.

The largest transactions included travel operator TUI taking a new 81,000 sq ft office for 15 years in Luton’s Capability Green business park; Health Services Laboratories agreeing a 16-year lease for 50,000 sq ft at Watford Council’s Croxley Park; Imperial College London signing a 10-year lease for 47,650 sq ft at the MediaWorks building in the Ontario Teachers’ Pension Plan’s White City Place (pictured); and the Pokemon Company expanding at Chiswick Park, agreeing to take an additional 19,000 sq ft and occupy 55,000 sq ft.

The markets recorded £237m of investment deals during the quarter, up 70% year-on-year, the largest deal being Hillcrest Private Equity Real Estate’s £48m acquisition of Building 8 in Chiswick Park.

Roddy Abram, head of South East and Greater London offices at Knight Frank, said: “The continued reversion to office-first work policies means that lease-event driven transactions have steadily trended upwards. Companies have been consolidating their regional offices into a higher quality headquarters in more occupier-friendly locations, whether in town centres or well-amenitised business parks with good connectivity. The large volume of deals currently under offer, which is largely also focussed on the best-in-class space, reflects companies looking to secure prime space which remains in short supply due to development constraints.”

Simon Rickards, head of national offices capital markets, added: “Deal flow this quarter suggests that nimble, opportunistic buyers have confidence around prime asset values with strong occupier profiles. However, there is still a shortage of motivated sellers, with many waiting in the hope that rate cuts might help strengthen asset prices in locations where investment-grade buildings are in short supply. Price erosion may well continue for secondary buildings without viable repositioning credentials.”

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BE Offices, Knight Frank

Office take-up across the South East and Greater London edged up by 2.5% year-on-year during the third quarter, with new and grade A space accounting for the lion’s share of deals. Knight Frank tracked 866,000 sq ft of take-up during the quarter, compared to 849,000 sq ft for the same period in 2023, with 86% of this being for workspaces in new or refurbished, grade A buildings. The largest transactions included travel operator TUI taking a new 81,000 sq ft office for 15 years in Luton’s Capability Green business park; Health Services Laboratories agreeing a 16-year lease for 50,000 sq ft at Watford Council’s Croxley Park; Imperial College London signing a 10-year lease for 47,650 sq ft at the MediaWorks building in the Ontario Teachers’ Pension Plan’s White City Place (pictured); and the Pokemon Company expanding at Chiswick Park, agreeing to take an additional 19,000 sq ft and occupy 55,000 sq ft.The markets recorded £237m of investment deals during the quarter, up 70% year-on-year, the largest deal being Hillcrest Private Equity Real Estate’s £48m acquisition of Building 8 in Chiswick Park. Roddy Abram, head of South East and Greater London offices at Knight Frank, said: “The continued reversion to office-first work policies means that lease-event driven transactions have steadily trended upwards. Companies have been consolidating their regional offices into a higher quality headquarters in more occupier-friendly locations, whether in town centres or well-amenitised business parks with good connectivity. The large volume of deals currently under offer, which is largely also focussed on the best-in-class space, reflects companies looking to secure prime space which remains in short supply due to development constraints.” Simon Rickards, head of national offices capital markets, added: “Deal flow this quarter suggests that nimble, opportunistic buyers have confidence around prime asset values with strong occupier profiles. However, there is still a shortage of motivated sellers, with many waiting in the hope that rate cuts might help strengthen asset prices in locations where investment-grade buildings are in short supply. Price erosion may well continue for secondary buildings without viable repositioning credentials.”