The South East office market has seen a dramatic improvement in take-up for many locations across the region, driven by company relocations and expansion, according to SHW’s Q1 2023 South East Office Focus.
Brighton & Hove had a bumper year in 2022 with take up reaching 220,000 sq ft (up from 70,000 sq ft in 2021. Rents jumped from a pretty static £32.00 per sq ft to £36.00 per sq ft. The new headline rent has seen quoting rents rise to £37.50 per sq ft, which SHW are confident will be achieved in 2023. Availability stands at 420,000 sq ft (vacancy 8.75%) although logged demand is far greater at 800,000 sq ft. As a result, we expect rents and take up to remain high.
The new Edward Street Quarter, Brighton accounted for approx. 80,000 sq ft of this take up, with only 30,000 sq ft of office space remaining available in this prime mixed-use development.
Crawley & Gatwick saw similar success with take up jumping from 57,500 sq ft in 2021, to 203,000 sq ft in 2022, and highest rents (£27.50) and with newbuild schemes quoting levels of £35.00 per sq ft. These figures include Crawley’s largest deal to date, with 54,000 sq ft let at Minerva.
Tim Hardwicke, SHW’s Partner and Head of Agency, comments: “Numbers are up due to many companies relocating to improve the quality of their offices, along with others taking opportunities to downsize, in part due to continued flexible working. Relocations have been mainly driven by lease events. However, there has also been a number of notable deals as a result of companies expanding.
“It’s encouraging to see companies investing in their buildings in order to provide staff with the best quality space they can afford – along with greener building promising lower running costs. As a result, we are seeing an increasing pattern of staff wishing to return to the office, rather than being directed to do so, with the new norm of 3 to 4 days per week in the office.”
In London, Grade A rents are standing at £125 in the West End and £75 in the City & Southbank, with 10-year term incentives averaging 21-24 months in the West End and 24 months in the City & Southbank. Grade A rents are reported at £42.50 in Kingston, £55 in Battersea and Putney, £57 in Wimbledon and £57.50 in Richmond.