Savills seeing increasing uptake of office space in South East

Real estate services firm Savills said it was seeing increased momentum in firms taking up office space in the South East this year.

In the year to date (to the end of Q3) take-up in the Greater London and South East office market was around 2.1 million square feet (sq ft).

That is up 38% compared to the same period in 2023.

In the third quarter this year, 756,000 sq ft of office space in the region was taken - up 10% compared to the second quarter (to June 30) this year.

Andrew Willcock, head of the Greater London and South East office agency at Savills, said: "Each quarter this year there has been a marked improvement in office take-up.

"Occupiers now have a clearer understanding of their working policies and spatial requirements and are keen to secure the limited prime space available in the market."

The largest office deals recorded in Q3 were TUI UK Ltd leasing 81,000 sq ft at The Lumen Building in Luton and Health Services Laboratories acquiring 50,100 sq ft at Building 7, at Croxley Park in Watford, said Savills.

The agency also noted that 80% of take-up in the year-to-date in 2024 had been for Grade A space with the most active business sector being manufacturing and industry (including pharmaceutical occupiers), which represented 29% of overall take-up.

Earlier this year, property consultancy Vail Williams, which published a comprehensive report, found that office market confidence was returning across the Thames Valley, Oxford and Surrey - but a lack of new industrial supply remained a core issue.

David Barden, regional managing partner for the Thames Valley, had said: "A new government has brought with it a fresh perspective, and we’re already seeing the positive impact of this on the office and industrial markets.

"Stabilised interest rates have invigorated the property market.

"Offices have regained their importance as hybrid work solidifies, and the creative repurposing of secondary office buildings are bridging the gap in industrial land and residential demand."

Barden had added: "A lack of industrial supply remains a core issue across the Thames Valley and Surrey regions, but deals are still being done here and we are welcoming some quality schemes to market with open arms."