Summary

• H1 2026 take-up reached 1.1 million sq ft, with activity subdued as occupiers adopted a more cautious approach against a backdrop of geopolitical tensions. Longer transaction times have slowed rather than removed activity.

• Five submarkets set new headline rents in H1 2026, reinforcing the trend of continued rental growth across Prime and Grade A stock.

• Supply contracted further to 11.4 million sq ft, the lowest level on record, and is forecast to fall below 11 million sq ft by year-end.

Take-up

Total take-up reached 1.1 million sq ft in H1 2026, which is 18% below the five-year average and 23% below the ten-year average. The first half of 2026 was shaped by a period of heightened uncertainty, with the US/Iran conflict and the resignation of the UK Prime Minister prompting many occupiers to adopt a more cautious approach to decision-making. Against this backdrop, CPI inflation eased to 2.6% in June, and GDP growth is forecast at 0.9% for 2026, pointing to a gradually stabilising economic environment. Q2 take-up totalled 486,000 sq ft, 15% below the same quarter last year and 23% below the five-year average.

There has been a marked fall in the number of deals over 20,000 sq ft in the first half of 2026, with the number 40% down on H1 2025 and 24% below the five-year average. Deals over 50,000 sq ft have, over the last five years, accounted for an average of 20% of take-up, whereas this year they have made up only 7% of leasing volumes so far. However, this fall is reflecting delayed rather than lost demand. By contrast, the smaller end of the market has proven to be more resilient, with sub-10,000 sq ft deals already exceeding H1 2025 by 18% and accounting for 51% of deals recorded this year.

Key submarkets have been performing well. Reading, the region's largest and most active submarket, recorded H1 2026 take-up 23% above its five‑year H1 average. This outperformance has been supported by continued inward movement into the market, exemplified by 3M moving from Bracknell, Zetes moving from Maidenhead, and Kittle Group moving from Chelmsford. Several other key markets are also showing signs of recovery when measured against their pre‑Covid five‑year averages. Stockley Park registered over 50,000 sq ft of take‑up, supported by a freehold transaction; Leatherhead exceeded its pre‑Covid average by 36%, underpinned by Dermalogica leasing 14,000 sq ft at 4 The Square.

Grade A space accounted for 81% of H1 2026 take-up, with the Western Sector recording the highest share. Prime space alone represented 16% of activity, up 2% on the same period last year. Notable deals included Zebra Technologies (30,000 sq ft) at Tempo, Maidenhead, and Microsoft (79,000 sq ft) at Here, Thames Valley Park.

Manufacturing & Industry remained the most active business sector in H1 2026, accounting for 39 % of total deals. The sector spans subsectors including pharmaceuticals, FMCG, manufacturing and defence. Notable transactions included 3M's 50,000 sq ft pre-let and Montu Group's 25,000 sq ft letting, both at Winnersh Triangle, alongside Parico's 11,000 sq ft deal in Farnborough.

Despite subdued take-up, market fundamentals remain stable. Savills is tracking 521,000 sq ft of under-offer space, including 11 requirements above 20,000 sq ft, indicating that demand for larger floorplates is still there. Longer transaction timelines, now 18 to 24 months compared to a historical 12 months, have slowed rather than removed activity. The market enters H2 2026 in a stronger position than headline figures suggest.

Supply

Supply at the end of H1 2026 fell to 11.4 million sq ft, the lowest level on record, which reflects a 25% fall since 2021. The sharpest decline has come from Grade B stock, which has fallen 14% since year-end 2025. Based on the current levels of take-up and the continued trend of stock being converted for alternative use, supply is expected to fall below 11 million sq ft by the end of 2026.

The development pipeline is severely constrained, with only one new scheme under construction: Trehus, Maidenhead, which is due to complete in Q1 2027. Levels of development are currently at the lowest ever recorded, although there has been a slight uptick in refurbishment activity. Major refurbishments are underway at Willowbank, Uxbridge and The Edge, Maidenhead.

Rental Levels

Five submarkets set new headline rents in H1 2026, including Slough, Maidenhead, and Leatherhead. The uplift in prime rents is also supporting rental growth for Grade A assets. In Maidenhead, the £60.00 per sq ft prime rent set at Tempo in Q1 was followed in Q2 by a separate Grade A deal at £48.50 per sq ft, a marked step up from the previous Grade A tone of £35.00 to £38.00 per sq ft. This trend is expected to continue into H2 2026 as prime supply tightens further across key submarkets.

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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