The 2016 UK Office Market Outlook

A report out this week from consultant CBRE on the outlook for the UK office market in 2016, suggests that despite some slight economic slowing, that most office sectors will see further growth over the next 12 months.

The report forecasts that although central London will continue to be the major engine of UK office market growth, the pace of that growth will ease slightly in 2016, due to a softening of UK growth. The report suggests that a dip in new office completions in London in 2016 will push up rental growth, however an increased pipeline of completions in 2017 will give office tenants more choice in the medium term.

Outside London, the report suggests that the South East will see more activity in 2016, after a sluggish 2015. Recent, mainly pre-let driven, quarterly take-up records set in Bristol, Manchester, Leeds, Aberdeen and Birmingham are unlikely to be repeated and the churn of secondhand office space is likely to become the mainstay of regional office take-up again, albeit alongside a lower level of pre-let deals.

The report spotlights that the areas where office demand is currently highest include West London and Thames Valley. Central London demand remains around 10m sq ft. It also forecasts an increase in speculative office development in regional centres. Schemes are tracked on the Cityoffices website.

Current Metropolis statistics show close to 1,000 unsatisfied office requirements across the UK of 2,000 sq ft+. In addition, there are over 500 lease expiries approaching in London alone, where companies have yet to make up their minds on whether to stay or go.

Based on similar audits of office requirements in recent years, office demand looks stronger than for a number of years.

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