The UK commercial office sector has arguably been the most interesting area of the property market in recent years due to the changing nature of work and the rise of hybrid working as a major factor for employers up and down the country.
That has been an important factor defining the market and been considered a challenge by many businesses and property owners. However, as we look back on Q1 2024 and ahead at the rest of the year, indications are that the long-term outlook for the sector is positive.
The latest Commercial Property Monitor from the Royal Institution of Chartered Surveyors (RICS) was published in Q1 and illustrates this newfound positivity.
Occupier demand has increased by 5% according to RICS, and the ‘flight to quality’ trend appears to be holding steady as occupiers choose premium units over lower quality units despite the difference in price.
This is backed up by the latest figures from Cushman & Wakefield, released in March 2024, which show occupier demand for Grade A office space pushed rents up by 5.9% in the quarter for this type of office space to rent.
The Spring 2024 Regional Office Outlook takes a deeper look at why companies are willing to pay a premium in a market where they have a good number of options, and provides an interesting analysis.
Right now, occupiers are accepting that an office space, ideally has to offer more than simply a physical setting to do work. Instead, the office needs to be a space that imparts company culture and gives employees an environment that they can’t get at home.
Spaces that are intentionally designed to offer an experience that goes beyond what we traditionally expect from an office are, therefore, more desirable in the short- and long-term.
Businesses are seeking best-in-class office spaces which provide not only the highest possible specification, but also ones which meet the need for enhanced amenities and greater levels of sustainability.
Clare Bailey, Director of Commercial Research at Savills, says: “Occupiers accept that a good office space isn’t merely a physical setting; it serves as a powerful tool to cultivate, reinforce, and sustain a company’s culture.”
Finding the balance between remote and in-office work is the dynamic that will continue to shape the sector, and it makes either new or refurbished projects that provide the highest level of quality the natural choice for companies of all shapes and sizes.
Developments like 3 Newbridge Square or Lynch Wood Park which offer sustainable office space alongside first-class amenities and great transport links are the easy choice for modern businesses looking for office space to rent.
Want to learn more about what a great modern office looks like? Browse our availability today and get in touch with the team.
