UK Office Market Outlook H2 2018

February 28, 2019

Take-up reaches a 6-month high

The uncertainty around Brexit caused the UK economy to lose momentum in the final quarter of 2018, yet the core 8 office markets saw a robust second half of the year.

Take-up reached a historical 6-month high with 5.2 million sq ft of space let, which was 35% ahead of the 10-year H2 average. As a result, the annual total reached over 9.0 million sq ft; a level not seen since 2000 and up 10% on 2017 volumes.

With such strong leasing activity, it’s no surprise that supply continued its downward path throughout 2018. Last year also witnessed the lowest level of speculative completions for three years. Is a supply gap looming for the regional markets?

However overall investment volumes were down in 2018 compared to 2017, with a lack of investment grade product holding back investors. UK buyers continues to dominate the market, with over 70% of core 8 transactions undertaken by domestic investors.

To read more about core 8 performance, download our H2 2018 UK office market outlook report or scroll to watch our video updates below.

The Big 6 update

During our annual presentation, regional Directors discussed the leasing and investment performance across the Big 6 office markets; Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.

2018 was a year of records for the Big 6 with highlights including:

  • Highest ever take-up at 6.1 million sq ft
  • Biggest ever deal in the Big 6 markets
  • Largest ever average deal size
  • Greatest number of deals over 10,000 sq ft
  • Greatest number of deals over 50,000 sq ft

Development and supply, flex space, and inward investment were key trends that dominated the market.

You can hear more about the key trends and takeaways from the presentation in the videos below.

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