Summary

Q1–Q3 take-up totalled 2.02 million sq ft, 2% above the five-year average, with full-year volumes forecast to reach between 2.7 and 2.9 million sq ft, broadly in line with recent annual totals. Q3 take-up stood at 492,000 sq ft, in line with expectations due to the seasonal summer slowdown, and prevailing geopolitical and economic uncertainty. Supply has fallen to a record low of 11.9 million sq ft, and with Prime availability expected to tighten further, driving rental growth.

Take-up reached 492,000 sq ft during Q3 2025 which was 42% below the same period in 2024, 29% under the five-year average, and 47% below the ten-year average. This figure culminated in take-up reaching 2.02 million sq ft for the first three quarters of 2025, 2% above the five-year average, and 13% below the ten-year average. The lower levels of take-up recorded in Q3 2025 can be partly explained by the wider economic uncertainty surrounding the upcoming Autumn Budget. This sentiment is reflected in the reduction activity from smaller occupiers leasing between 5,000 and 10,000 sq ft. There was a 20% fall in lettings recorded in this size band when compared to the five-year average.

Conversely, the resilience in the market has been evident by the increase in activity from corporate occupiers. There has been an uptick in deals recorded over 20,000 sq ft, with 30 recorded deals being 22% above the five-year average. This trend highlights the continued appeal of the region to corporate occupiers who remain loyal to this market area.

The increase in activity from larger occupiers is supporting the flight to quality in the market which resulted in Grade A and Prime space accounting for 81% of take-up in Q1–Q3 2025. This trend was illustrated in Q3, with four prime lettings occurring. Centrica completed the largest transaction, relocating to One Station Hill and taking 42,000 sq ft, bringing the building to 70% let, just ten months after practical completion. At 8 Queens Road in Wimbledon, a final letting of 28,500 sq ft secured full occupancy, marking a key milestone for the scheme. Inforcer took 9,000 sq ft at Explore in Richmond, setting a new record headline rent for the South West London submarket, while BPCE Equipment Solutions leased 18,000 sq ft at 63 Kew Road.

Take-up remains nuanced across the region, with larger established centres continuing to grow their occupier base. This trend is reflected in the performance of individual towns. Three markets have stood out in the first three quarters of the year: Reading, St Albans, and Uxbridge. Reading take-up is expected to surpass 600,000 sq ft, marking the first time this milestone has been achieved in over two decades, while St Albans recorded its highest level of take-up in 25 years, reaching almost 90,000 sq ft, 192% above the ten-year average. Uxbridge has also seen robust activity, with 177,000 sq ft transacted across eleven deals from nine different business sectors, contributing to a resilient local economy.

Tenant expansion within existing buildings emerged as a notable trend this quarter. On average, tenants increased their occupied area by 7,483 sq ft, and their average footprint by 84%. Certain occupiers significantly reduced their office footprint during the Covid-19 pandemic, as a result of expected lower occupancy levels arising from hybrid working. This sentiment has been gradually shifting, and there are examples of occupiers needing to expand their footprint to accommodate their employee working patterns.

Looking forward, Savills is currently tracking 3.54 million sq ft of active requirements across the Greater London and South East office market, including Coca-Cola seeking 90,000 sq ft across West London, EasyJet with a 100,000 sq ft requirement in Crawley, and the Civil Aviation Authority targeting 60,000 sq ft in the same area. Take-up for 2025 is forecast to align with the previous three years, reaching between 2.7 and 2.9 million sq ft.

SUPPLY IN GREATER LONDON AND THE SOUTH EAST DEVELOPMENT FALLS TO LOWEST LEVEL ON RECORD AS DEVELOPMENT ACTIVITY STALLS

Supply in the South East has fallen to its lowest level on record, contracting by 10% since the end of 2024 to stand at 11.9 million sq ft. Town centre availability has reduced by 13% over the same period, compared to a 6% fall out-of-town. Prime and Grade A space accounts for 56% of total supply, with the highest proportion in the Thames Valley, but there are only eleven Prime buildings capable of accommodating requirements over 50,000 sq ft. Across all core markets, with the exception of South West London, there is less than one year of Prime supply remaining.

There is only one speculative development under construction, Trehus in Maidenhead, which will deliver 60,000 sq ft of prime space to the market. With just 400,000 sq ft currently in the development and comprehensive refurbishment pipeline against a backdrop of record-low levels of existing supply, competition for top-quality space is expected to intensify, driving rents further across both well-located Prime and Grade A stock.

RICHMOND ACHIEVES NEW RENTAL HIGH AS TECH-LED EXPANSION HIGHLIGHTS AI’S ROLE IN DRIVING TAKE-UP

A new headline rent has been set in Richmond following Inforcer’s lease at Explore. The software firm, which secured £28.5 million in its second phase of venture capital fundraising, has taken 9,000 sq ft of prime space at £64.50 per sq ft, 4% above the previous record achieved by Lindt at The Gosling at the end of last year. Inforcer’s relocation from serviced offices, driven by rapid expansion, highlights the potential for the increased investment into AI being able to support take-up across the South East office market.

With the development pipeline at an all-time low, further rental growth is expected. Already in Q3, Chelmsford’s headline rent increased by 14% to £32.00 per sq ft, Farnborough saw rents rise to £35.00 per sq ft, and the Skechers letting in St Albans pushed the headline rent to £43.00 per sq ft. These rental uplifts reinforce the trend of occupiers being prepared to pay premium rents amidst the ongoing flight to quality and a lack of options across the market.

Savills defines Prime Grade A as best-in-class office space that is ESG-compliant (EPC A&B) and contains multiple amenities; it has been tracked since 2020.

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