2026-02-24-莱坊-UK_Cities_Office_Market_Report_Q4_2025_15页_1mb

UK Cities Office Market Annual Review 2025 Summary

Core Content

The 2025 UK regional office market showed a mix of resilience and challenges, with strong leasing activity and investment volumes, though not reaching pre-pandemic levels. Key cities like Birmingham, Bristol, and Glasgow demonstrated robust demand, while others faced supply constraints and political uncertainties.

Main Points

Leasing Activity

• Annual Take-Up: 5.0 million sq ft, slightly below 2024 levels but in line with the 5-year average.
• Q4 Performance: The strongest quarterly leasing activity of 2025 with 1.4 million sq ft leased.
• Market Activity: Over 1,000 deals completed in 2025, with 45 transactions above 20,000 sq ft.
• Sector Demand:
  • Financial & Professional Services led demand at 52% of total take-up.
  • TMT sector followed at 17%.
  • Technology and financial services showed strong active requirements.
• Grade A Preference: Grade A space accounted for 61% of all take-up, indicating a continued flight to quality.
• Vacancy Levels: Overall vacancy reached 14.1% in Q4, with Grade A vacancy rising to 3.4%.
• Supply Constraints: Limited development pipeline with only 1.7 million sq ft under construction, expected to be delivered over the next 36 months.

Investment Activity

• Annual Investment: £916 million, 28% below 2024 levels.
• Q4 Investment: £291 million, the highest quarterly total in the past 12 months.
• Deal Size: Average deal size fell to £11 million, the lowest since 2012.
• Key Transactions:
  • CBRE IM sold 201 Deansgate for £30 million to Corum XL.
  • Melford Capital acquired 101 Embankment for £74 million in Manchester.
• Buyer Pool: Narrow in 2025, dominated by private equity and UK-based property companies (70% of total investment).
• Yields: Prime office yields remained stable, with ranges from 6.50% in Edinburgh to 10.00% in Aberdeen, significantly higher than London benchmarks.
• 2026 Outlook: Increased liquidity expected with more overseas and institutional capital returning, supported by easing debt costs and competitive prime pricing.

Regional Market Insights

Birmingham

• Annual Take-Up: 651,507 sq ft, 8% below 5-year average.
• Q4 Take-Up: 290,059 sq ft, 64% above 5-year quarterly average.
• Active Requirements: 665,000 sq ft, showing strong occupier interest.
• Grade A Vacancy: 5.1%, reflecting strong demand.
• Supply: New and Grade A availability rose to 729,094 sq ft, with a development pipeline of 413,267 sq ft, heavily weighted toward 2026.

Bristol

• Annual Take-Up: 604,119 sq ft, 37% higher than 2024 and 15% above 5-year average.
• Q4 Take-Up: 164,669 sq ft, 25% above 5-year quarterly average.
• Active Requirements: 721,000 sq ft, indicating strong demand.
• Grade A Vacancy: 1.1%, reflecting tight supply.
• Supply: New and Grade A availability fell to 199,213 sq ft, with no speculative space under construction.

Cardiff

• Annual Take-Up: 371,659 sq ft, 32% below 5-year average.
• Q4 Take-Up: 115,973 sq ft, a 71% increase from Q3.
• Active Requirements: 645,000 sq ft, showing strong future demand.
• Grade A Vacancy: 2.2%, indicating limited supply.
• Supply: New and Grade A availability increased to 738,440 sq ft, with 95,000 sq ft under construction.

Edinburgh

• Annual Take-Up: 471,753 sq ft, 10.5% above 5-year average.
• Q4 Take-Up: 121,958 sq ft, 48% increase from Q3.
• Active Requirements: 577,500 sq ft, showing robust demand.
• Grade A Vacancy: 1.4%, remaining low by historical standards.
• Supply: New and Grade A availability fell to 164,348 sq ft, with 274,000 sq ft under construction.

Glasgow

• Annual Take-Up: 471,753 sq ft, outperforming the long-term trend.
• Q4 Take-Up: 143,630 sq ft, 12% less than Q3.
• Active Requirements: 577,500 sq ft, indicating sustained demand.
• Grade A Vacancy: 1.4%, reflecting a tight market.
• Supply: New and Grade A availability stood at 164,348 sq ft, with 274,000 sq ft under construction.

Key Information

• Market Trends: A clear shift towards quality and sustainability, with Grade A space in high demand.
• Development Pipeline: Limited in most cities, with new speculative developments expected to be delivered over the next few years.
• Investment Outlook: Positive momentum expected in 2026, with increased liquidity and more active capital returning to the market.
• Rental Trends: Prime rents are expected to continue rising, supported by strong demand and limited supply.
• Occupier Behavior: Increased focus on long-term commitments and prime locations, with a growing appetite for sustainable and ESG-compliant spaces.

Knight Frank Views

• Darren Mansfield (Birmingham): Emphasizes the strong demand for Grade A space and the need for the market to respond to prevent supply constraints from slowing leasing activity.
• Jamie Phillips (Bristol): Notes the re-emergence of the TMT sector and the importance of quality fitted space.
• Andy Smith (Cardiff): Highlights the strong performance of the Cardiff market and the need for new developments to maintain rental growth.
• Toby Withall (Edinburgh): Points to the impact of political uncertainty and the potential for renewed activity in 2026.
• Eamon Fox (Glasgow): Highlights the continued flight to quality and the expected development response to support the market.