Quiet year for South East office market with Brighton leading the way
Take up across the South East office market was relatively slow in 2024, according to property advisory firm SHW, with only the Brighton area bucking the trend.
With another letting just completed at The Portland Building, the majority of take up in the South Coast city is linked to the ‘flight to quality’ move, with businesses wanting to provide the best quality office space they can afford for their staff.
Tim Hardwicke, partner and head of agency at SHW, said: “We expect this trend to continue across 2025.
“However, for areas where quality stock is not available, occupiers will likely stay put unless they need to right-size their accommodation.”
Over in Crawley, take up has been lower than the long-term average.
The occupier lettings have been either in Crawley’s only new office building – The Create Building, setting a new rental tone in the area – or the Galleria, a building refurbished back to Grade A.
There have also been a couple of freehold deals to developers wanting to convert to residential not included in the statistics which will reduce the available stock.
In Croydon, a lot of stock has been lost to permitted development, with an estimated 1 million sq ft of office space expected to be converted to residential over the next 12 to 24 months.
This should lead to more office transactions in 2025/26 as occupiers look to relocate.
Tim added: “Successful lettings will encourage investors to spend on refurbishment and repositioning of suitable stock.
“However, a strong hand is needed for this.
“Occupier rents are significantly increasing for new, high-quality space – although occupiers will benefit from lower service charges and running costs, and great ESG credentials.
“The re-positioning/refurbishment offer will have to be very strong to achieve this (which is possible), and nerves held due to the high investment costs involved and a two-to-three-year turnaround to re-let post-refurb, but the benefits could be appealing if investors can be patient.”
In London, Grade A rents are up, topping £130 per sq ft in Fitzrovia, £145 in Soho, £100 in Covent Garden and £95 in Midtown, with strong logged demand across all these areas.
