As we move forward into Q3 2024, the UK commercial office market continues to be influenced by hybrid work and a strong demand for high-quality spaces. In our Q2 2024 Forecast for Commercial Office Space, we saw the trend of businesses prioritising adaptable and premium office spaces. It continued to Q3 with companies willing to pay more for Grade A spaces that offer a positive work environment.
In this blog, we will go through the latest trends in the UK office market, looking at rental prices, vacancy rates, and ongoing demands. If you’re looking for an office space to rent this market analysis will help you make informed decisions.
Table of contents
Current Trends in Commercial Office Space in the UK
Hybrid Work and Demand for Adaptable Offices
Sustainability Focus
Office Space Market Data for Q3 2024
Rental Prices and Vacancy Rates
How FI Real Estate Management Can Help
Current Trends in Commercial Office Space in the UK
The UK office space market is changing fast. In 2024, we see continuously expanding trends that shape how businesses choose and use office spaces.
These trends are pushing the demand for high-quality offices. Companies are ready to pay more for spaces that offer the best features and experiences for their employees. Let’s take a closer look at the current situation of the commercial office space market in the UK for Q3 2024.
Hybrid Work and Demand for Adaptable Offices
One of the things that has significantly impacted the demand for office space in the UK, was the shift from fully remote jobs to hybrid work. Businesses have started to change, and the need for adaptable office spaces is constantly increasing. Companies are prioritising high-quality spaces to support their hybrid workforce. This is reflected in recent data (Cushman & Wakefield UK Office MarketBeat Q2 2024) showing that take-up of Grade A office space has seen a sharp increase, reaching a record 77% of leasing activity in Central London in Q2 2024.
Sustainability Focus
Another desirable feature when looking for an office space to rent in the UK is sustainability. Businesses are increasingly looking for spaces with a strong environmentally friendly focus, at the same time bringing a “flight to quality” in the market. According to the recent UK Real Estate Market Outlook 2024 by CBRE, this trend is expected to continue, with sustainability features becoming one of the most important factors when it comes to asset values.
Office Space Market Data for Q3 2024
Rental Prices and Vacancy Rates
In Q2 2024, we observed a growth in prime office rents in major UK cities, with London’s West End reaching £140.00 per square foot and Bristol hitting £48.00 per square foot – the highest in the region (Cushman & Wakefield UK Office MarketBeat Q2 2024). The overall vacancy rate for office space in the UK is 9.9%, with Central London 9.4% and the “Big Five” cities 9.2%.
Because of the sustained demand for high-quality offices, prime office rents in major cities are expected to continue rising in Q3 2024. Lower-grade offices may experience slightly higher vacancy rates in Q3 as businesses switch to premium and sustainable spaces. For this reason, offices with strong sustainability credentials will remain in demand.
How FI Real Estate Management Can Help
At FI Real Estate Management, we understand the changing needs of businesses. With over 40 years of experience and a portfolio of more than 15 million sq ft, we will help you find the ideal office space you’ve been looking for.
Our developments, such as 3 Newbridge Square or Lynch Wood Park, offer sustainable office spaces, first-class amenities and great transport links. Recently, our 1 Newbridge Square (see the photo above) has been shortlisted for the Insider Media Property Awards in the "Sustainable Project of the Year" category. These are an easy choice for modern businesses looking to rent office space.
Want to learn more about what a great modern office looks like? Browse our availability today and get in touch with the team.