BNP Paribas Real Estate, part of the BNP Paribas Group, a global leader in financial services, today announced that the Big Ten UK regional office market recorded a surge in leasing activity in Q3 2024.
According to the latest data, regional office take-up increased 35.6% year-on-year to reach 1.47 million sq ft, reflecting the highest quarterly take-up since Q4 2021 at 1.66m sq ft. Leasing activity was boosted by a return of larger deals over 50,000 sq ft, particularly across Manchester and Birmingham.
The government/education sector accounted for the largest share of take-up in Q3 2024 at 27%, followed by professional services (25%) and banking/finance (17%).
Demand for best-in-class space continues to add pressure to prime rents, which increased 6.9% year-on-year on average across the Big Ten regional markets. Bristol leads the way at £48 per sq ft, followed by Edinburgh (£46), Manchester (£44), Birmingham (£42.50) and Glasgow (£39.50).
The increase in prime rents has been steered by pre-lets on upcoming office developments as companies continue acting quickly to secure space within the relatively limited development pipeline. Over a third of office space under construction has been pre-let, with further pre-let deals under offer and expected to complete in Q4.
Josh Arnold, Regional Office Markets Research at BNP Paribas Real Estate commented: “The latest leasing data shows an encouraging shift in activity, with year-to-date (Q1-Q3) take-up levels now the highest since before the pandemic.
“Take-up in Q3 was boosted by significant deals over 50,000 sq ft. However, despite sizeable requirements across key regional cities, question marks remain over whether this momentum can last given the limited pipeline of Grade A stock under development.
“The latest prime rental figures underscore the ongoing ‘flight to quality’ within regional office markets, as organisations increasingly seek out high-spec, well-located spaces.
Simon Williams, Head of National Markets at BNP Paribas Real Estate added: “Regional office markets are receiving recognition they deserve, and for good reason.
“These cities not only offer strong talent pools but also provide vital infrastructure, connectivity, and quality of life that can drive business success. The rise in rental growth in cities like Bristol, Edinburgh, and Manchester reflects a broader trend where occupiers are increasingly taking space across strategic locations that support their long-term goals.
"For occupiers looking to establish a lasting footprint outside of London, these thriving hubs present unique opportunities to attract top talent and build resilient operations.”
Download the UK Regional Office Market Report Q3 2024 report here.