National occupier overview

Occupier demand for regional offices continues to display resilience with Big Nine take-up reaching 2.1m sq ft in Q1 2025, in line with the 10-year quarterly average and the strongest Q1 since 2018. Three deals on excess of 100,000 sq ft provided a boost to demand, the largest of which was the Department for Work and Pensions’ 173,000 sq ft pre-let at Reuben Brothers’ 1 Pilgrim Place in Newcastle.

DWP’s pre-let, together with Network Rail’s 109,000 sq ft owner occupier deal at Princes Exchange in Leeds contributed to the Government & Services sector accounting for a quarter of Q1 take-up.

The out-of-town market saw increased momentum with take-up reaching 809,825 sq ft, its highest level since Q3 2021. Five deals in excess of 25,000 sq ft completed in the first quarter, up on the average of four seen per quarter. As city centre locations continue to suffer from a chronic lack of Grade A space, some occupiers are beginning to look beyond in-town locations in the search of larger, more flexible and cost-effective options.

Indeed, city centre prime rents continue to experience rental growth, in Q1 prime rents across the Big Nine increased 2% q-o-q to £39.53 per sq ft, reflecting annual growth of 6%. Glasgow and Leeds reported the largest quarterly rental hikes of 5% and 6%, respectively.

Downward pressure on rent frees is starting to emerge averaging 19 months on a 10-year lease across the Big Nine markets, down from 21 months 12 months ago.

Occupier preference for new and refurbished space fuels the flight to quality with 48% of 2025 development completions already pre-let. We are seeing a growing preference for fitted space with good wellness and sustainability credentials.