Lambert Smith Hampton
Offi ce occupancy has been shown to be on the rise in numerous studies,
What does the ‘new normal’ look like in city’s offi ce market?
Whilst the UK economy still stutters amongst wider macroeconomic challenges and geopolitical uncertainty, Milton Keynes as an office location continues to perform well against competing locations and on a number of metrics. Our viewpoint on why MK is
an attractive city for businesses to locate to remains the same; excellent connectivity, a large depth of talent and a growing cluster of knowledge intensive businesses. Whilst the Oxford- Cambridge Arc or ‘Growth Corridor’ is bringing about major infrastructure investment which will boost MK’s growth prospectives in the medium to long term, MK remains a successful city in its own right.
Tom Harker Director - Offi ce Advisory Lambert Smith Hampton
including Remit Consulting’s Return Report, which is a barometer for offi ce occupancy trends post-pandemic. It is generally suggested that offi ce occu- pancy rates ranged between 60% and 80% pre-pandemic. Based on Remit’s data, occupancy levels are now up to around 35% nationally on Tuesday, Wednesdays and T ursdays with lower occupancy on Mondays and Fridays, which continue to be the quietest days of the week. Despite increased occupier caution around the economy, prime headline
rents have not only proven resilient but grown signifi cantly in many cases. T e best rents achieved are on prime space that goes much further with regard to amenity, wellbeing and ESG credentials. Meanwhile, an increasing fl ight to quality among occupiers presents a bleak picture for second-hand space, which may ultimately be better suited for alternative use. Creating more fl exible workspace solutions will also provide an important
means of attracting demand. T e South East is still yet to see a concerted increase in fi tted space being off ered to the market, with Cat B and Cat A+ making up only 8% of total landlord-based supply. With many occupiers remaining averse to cap ex and still unsure of their long-term plans, allowing for both quality and fl exibility could be key to letting success. Take up in 2023 for MK bounced back despite a challenging macroeco-
nomic backdrop. Total take up reached 255,711 square feet up from 226,444 square feet from 2022. T is fi gure is around 19% below the 10-year average, however, this average is skewed by the development of Santander’s 400,000 or so square foot Unity Place. If this transaction is disregarded, the 2023 take-up fi gure is only 5% below the long-term average. Encouragingly, there was a return of the volume of smaller transactions from
2,000 to 10,000 square feet, accounting for 20 out of 27 transactions, demon- strating a healthy depth of demand from small and medium-sized businesses. Occupiers continue to show commitment during the fi rst months of 2024 with an estimated 70,000 square feet under off er in MK across 10 transactions.
ALL THINGS BUSINESS | 6
CONSTRUCTION, LAND & DEVELOPMENT
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