2023-05-17-莱坊-The_M25_South_East_Market_2023_Executive_Summary_3页_309kb

Executive Summary:
The 2023 report on the M25 and South East markets highlights key challenges and opportunities in offices and life sciences. Functional obsolescence is a major issue due to hybrid work trends, with only 46% of office space meeting basic standards. Minimum Energy Efficiency Standards (MEES) show high non-compliance, including 54% failing EPC C rating requirements. Cost pressures are significant, with rent and building costs rising. While offices evolve to focus on employee well-being and productivity, life sciences is a growth driver with substantial investments.

Key Findings:

• Functional and physical obsolescence is increasing, driven by post-pandemic work changes.
• Energy efficiency: 54% of office space lacks EPC C rating, and 80% is not compliant with future 2030 standards.
• Cost pressures: Average office rent in South East rose by 3%, building costs increased by 7.1%, and interest rates are high.
• Office adaptation: Despite work pattern shifts, offices remain relevant but are redefining roles for health, collaboration, and productivity.
• Life Sciences growth: Strong in South East, with £1.1bn investment in Oxfordshire and Cambridgeshire; limited supply of lab space (24,000 sq ft available).
• Market opportunities: High-quality ESG assets are in demand, offering liquidity discounts, while polarization creates "best and the rest" dynamics.