UK Office Space Booming: Top 5 Cities

Despite record numbers of unemployment, trade and economic uncertainties brought on by Brexit and a negative correlation between the rise in inflation and inertia of real living wages. UK demand for office space is the highest its been for nearly two decades.

A report published by Knight Frank suggests that 2018 will continue to be a prosperous year for domestic office space.

‘Take-up reached a fifteen year high supported by headcount growth, business restructuring and new market entrants.’

The UK’s major regional cities have surmounted against the wider national geopolitical uncertainties and investment into office space is steady and rising. At the beginning of this year, investment into office space was up 4.75% from 2017.

Overseas and Domestic Investment

In 2018 and 2017, a large volume of investment came from overseas investors and institutions. 40% of investment was accredited to overseas investors with the majority of investment centred towards London and Manchester. Domestic investment however still accounted for the largest volume. Global and domestic companies with property assets in the UK have started to consolidate their business and acquisitions. Favouring occupying and developing major headquarters in city locations, rather than occupying multiple smaller office spaces nationwide.

But it isn’t just Manchester and London that are attracting investment

Regional cities all across the UK are attracting considerable investment and demand is widespread. Here we’ve listed the top five best performing regional cities in the UK, based on investment volumes (2017).

Number 1: Manchester-£917million

Last year Manchester attracted the largest amount of investment into office space outside of London. The overall prime yield for office space is set to increase by 4.75% this year.

Number 2: Birmingham-£599million

As well as attracting a considerable volume of investment, Birmingham also had the highest cost (per sq.ft) for office space. Suggesting that demand continues to be high in the UK’s second largest city.

Number 3: Glasgow-£458million

As well as attracting considerable investment, Glasgow also had one of the highest percentage increases (313%) of investment volume in two years.

Number 4: Edinburgh-£411million

The second of the Scottish cities, Edinburgh has been a desired location for office space for some time. It also had the second highest cost per square ft for office space, which could be a reason as to why investment volume was down 8% from 2016.

Number 5: Bristol-£396million

Despite its somewhat quaint reputation, Bristol has proved domestic investment is a valuable market to attract. Bristol had the second highest domestic investment volume on the list.

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Disclaimer: All research in this article was provided by Knight Frank research division. Vantage Building Consultancy does not take responsibility for any original research in this article.