2021 was a solid, if not spectacular year, for offices in our market, despite the second wave of Covid hitting. Although, take-up fell 6.5% on the previous year in our regional markets, supply remained static with vacancy level of only of 8.3%.
We did see some notable performers, with Guildford, largely driven by the booming gaming sector, recording a 21.5% increase on its five-year average take-up figure. With 60,000 sq ft already under offer, 2022 looks like being another strong year. Leatherhead and Weybridge also performed well, with 58% and 11% increases, respectively.
Prime rents consolidated in most locations; indeed, new records were set in Woking, Guildford, and Staines demonstrating that occupiers will pay top rents for the best space, particularly as they look to attract employees back into the office.
The pipeline of new and refurbished buildings in the southeast continues to be very limited, with only 113,000 sq ft currently onsite, a fall of 64% on the previous year.
Surprisingly, with the prevalence of agile working, we’ve not seen occupiers releasing much space to the market. Some are adopting new and innovative ways of using their offices, whilst others are waiting to see how the return to the office pans out rather than making decisions, they may regret in 12 months’ time.
The polarisation in office demand also continues. Our experience showed that landlords need to offer top quality accommodation in an amenity rich environment, whilst addressing the ESG and the Sustainability agenda, which is playing an increasingly important role in many relocations. For those occupiers priced out of the top end of the market, the alternative is a more competitively priced offer but combining an amenity offer with a good parking provision which remains at the top of many occupiers’ wish list. If you fall between these two ends of the market, then identifying demand can be more of a challenge.
With the return to the office now in full swing, we predict 2022 will be a busy year across our markets. We are already seeing an increased level of demand and the constrained pipeline will ensure that rental growth continues to be a theme across many markets. One thing is for sure, the office remains a key component for many employers.
If you have any questions or would like to discuss any aspects of the report, please contact one of the team.
Recent Key Transaction
19,490 sq ft let to ID Business Solutions who paid £37.00 psf on the 7th floor, setting a new prime rental level for Woking.
Hurst Warne jointly advised the landlord.
