3 February 2025
BRIGHTON CONTINUES TO LEAD THE WAY IN LEASING ACTIVITY ACROSS SOUTH EAST OFFICE MARKET
Business Space, Commercial, Development, ESG & Sustainability, Industry News, Offices, SHW News
Take up across the South East office market was relatively slow in 2024, after an improved 2023, with just the Brighton area bucking the trend, seeing an increase in transactions, according to SHW’s Q1 2025 South East Office Focus.
With another letting just completed at The Portland Building, demonstrating this trend, the majority of take up is linked to the ‘flight to quality’ move, with businesses wanting to provide the best quality office space they can afford for their staff. Tim Hardwicke, SHW’s Partner and Head of Agency, notes: “We expect this trend to continue across 2025. However, for areas where quality stock is not available, occupiers will likely stay put unless they need to right-size their accommodation.”
In Crawley take up has been lower than the long-term average. The occupier lettings have been either in Crawley’s only new office building - The Create Building, setting a new rental tone in the area - or the Galleria, a building refurbished back to Grade A, confirming the ‘flight to quality’. There have also been a couple of freehold deals to developers wanting to convert to residential not included in the statistics which will reduce the available stock.
In Croydon, a lot of stock has been lost to Permitted Development and an estimated 1 million sq ft of office space expected to be converted to residential over the next 12-24 months. This should lead to more office transactions in 2025/26 as occupiers look to relocate as they look to re-home.
Tim adds: “Successful lettings will encourage investors to spend on refurbishment and repositioning of suitable stock. However, a strong hand is needed for this. With occupiers rents significantly increasing for new, high-quality space (although occupiers will benefit from lower service charges / running costs and great ESG credentials), the re-positioning / refurbishment offer will have to be very strong to achieve this (which is possible), and nerves held due to the high investment costs involved and a two-to-three-year turnaround to re-let post refurb but the benefits could be appealing if investors can be patient.”
In London, Grade A rents are up, topping £130 (per sq ft) in Fitzrovia, £145 in Soho, £100 in Covent Garden and £95 in Midtown, with strong logged demand across all these areas.
For more information and a copy of the SHW Q1 2025 Focus Report, please contact any member of the SHW team.
