The take-up figures, which were 15% above the five year average, was supported by strong momentum through the year with Q4 take-up being 38% higher than the same period last year.

All Big 6 office markets (Bristol +5%, Birmingham +21%, Edinburgh +70%, Glasgow +42%, Manchester +29% and Leeds +0.1%) recorded take-up growth in 2024. Edinburgh recorded the largest year on year growth with take-up 70% higher than 2023, driven by the Q4 being the largest quarter of take-up on record, predominantly due to Lloyds Bank completing a 282k sq ft letting at Port Hamilton in Q4, also the largest deal of the year.

Other large deals across the regional office market include BNY Mellon’s 197k sq ft letting at 4 Angel Square in Manchester and Aston University completing a 189k sq ft deal at 10 Woodcock Street in Birmingham.

In total, there were nine deals over 50,000 sq ft in 2024, 25% higher than the five-year average number of deals over 50k.

The development pipeline continues to shrink with all Big 6 markets reporting an undersupply of Prime and Grade A office stock. This has resulted in robust competition for the high quality office space occupiers require and rents continuing to rise across all Big 6 office markets.

James Evans, head of national office agency at Savills, says: “A 26% increase in take-up year on year is an impressive performance for the regional office market, bringing total take-up to its highest point since 2019. Despite these encouraging numbers, there remains some caution as businesses digest the impact of the Autumn Budget. However, dwindling supply of high quality office assets means that rental inflation and competition for space is starting to bite.”

Mark Walsh, Global Occupier Services, Savills, adds: “There is a clear preference for high-quality spaces with businesses prioritising well-located, sustainable offices to attract and retain talent. The way occupiers use their space has also evolved to incorporate more flexibility with multi-use spaces and an increase in amenity offering. There are also increasing signs, as the availability high quality offices continue to decline, that occupiers are working with landlords to upgrade their existing spaces to meet their evolving needs.”

Investor confidence improving

Savills also reports an increase in investor activity in the regional office markets, with £2.9 billion transacted in 2024, marking a 10% rise from 2023. However, activity remains subdued compared to average levels, with volumes 50% below the five-year average.

Investor confidence appears to be improving, evidenced by a 29% increase in the number of recorded deals. Despite this, there has been a shortage of large transactions, with only two deals over £100 million: the sale and leaseback of Cody Technology and the sale of Abcam’s headquarters at Cambridge Biomedical Campus to Danaher Corp.

James Emans, joint head of UK investment at Savills, comments: “Investment volumes remain low compared with historical figures, but we are now seeing signs of investor confidence returning evidenced by the increase in deal activity increasing year on year. There is some caution as we enter 2025 but opportunistic investors are proactively seeking out assets with good fundamentals that have inevitably been re-priced. This thesis is supported by the ongoing positive occupational story and limited development to meet this demand.”