The South East Office Market: Update


Kirkby Diamond looks set to celebrate its best year ever for office lettings and sales in Milton Keynes - as well as building a strong presence in St Albans having recently opened its first Hertfordshire office.


According to Matt Bowen, partner and head of commercial agency, there seems to be a two-tier market developing where the very ‘best in class’ are still receiving interest and transacting.


Matt Bowen


Evidence then suggests companies are seeking good value offices which, whilst perhaps not being to the very highest specifications, are excellent functional spaces at a significantly discounted rent or price.


Where employees are not in five days a week, it seems they are more willing to accept their employers having offices further away from where they live. With a challenging economic climate, this allows companies to seek cost- effective property solutions.


This is evidenced with the increased take up in business parks like Capability Green in Luton where Kirkby Diamond has recently completed several lettings from 2,000 – 7,000 sq ft, plus a 5,000 sq ft building sale. Our acquisitions on the site include Churchill Services and Hallgarten Wines.


Capability Green has enjoyed a huge revival in popularity in the last 12 months, with easyJet taking over 50,000 sq ft and two further international operators considering the site. It is refreshing to see the business park now welcoming many new high-quality occupiers.


In St Albans and Herts generally, out-of-town locations such as Spring Valley/ Porters Wood are fully occupied for the first time in memory and we have just completed a 3,475 sq ft letting in Trident House, in the city centre - a perfect example of Grade A office space available at £10 psf less than the very ‘best in class’ buildings.


Milton Keynes, known for its high-quality office space with excellent accessibility, is bucking the trend with relatively strong transaction numbers across all ranges of quality and rent. Whilst larger spaces can take longer to transact, we have a lot under offer and due to complete before the end of 2024, making it our best year ever for offices in Milton Keynes. With quality stock being instructed on, 2025 is looking positive and our position of number one agent in Buckinghamshire for office transactions looks set to continue.


Most office moves continue to be occupiers downsizing. However, we are beginning to hear from companies where their ‘hot desking areas’ are difficult to manage on days with more people than desks. If we see a reversal of the home working trend, then companies will soon need to increase office space.


With the increase in supply and options for occupiers, we are seeing a general trend for shorter lease terms or break clauses, as companies aren’t certain about their long-term occupational needs. They are also keen for landlords to incur the cost of a fit-out rather than having rent-free periods. This is likely to continue until demand begins to outstrip supply.


The southeast market remains quiet, with take-up at historically low levels. St Albans is a difficult market, with probably the lowest level of transactions recorded in 2024 and availability of over 270,000 sq ft. Where landlords can do rent deals, they are likely to see take up before those where rental levels must remain high, even if vacant, to protect asset value.


Larger firms such as Google now require employees to be in the office five days a week. If this filters down, more companies will find their current space isn’t large enough and will have to find more suitable accommodation. This could see 2025 being a much stronger year for offices across the region.


Matt Bowen 07442 820 386


Matthew.Bowen@kirkbydiamond.co.uk www.kirkbydiamond.co.uk.


Live Work Play Hertfordshire


Hertfordshire is typically known for its historic estates, countryside and commuter towns within a short train ride to Central London. But from The Making of Harry Potter to the highest grossing movie of 2023 (Barbie), Lewis Hamilton, George Ezra and THAT Troy Deeney moment, the world has been able to share in Hertfordshire’s ‘blue blue sky’ thinking.


At Brasier Freeth, we’ve witnessed first-hand how the local commercial real estate market continues to thrive in a similar vein, and as the most active agent in the county since 2008, we take immense pride in promoting its appeal.


There is the vibrant business landscape, ranging from start-ups to international corporations. The county can call itself home to numerous household names with Tesco’s, ASOS, Epson and Huel – to name a few – making use of the access to London, the educated talent pool and exceptional quality of life.


We have been delighted to play our part, for example TK Maxx have reaffirmed their commitment to Watford with a new ‘state of the art’ headquarters office opposite Watford Junction station, alongside two other buildings on Clarendon Road, all of which Brasier Freeth had a hand in acquiring.


As an industrial and logistics location, the county has been a beneficiary of a well-established motorway network commercial appeal. Prologis are now on site with their third phase of Prologis Park in Hemel Hempstead, developing their next generation of industrial


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stock with the highest ESG measures. Conversely, Wrenbridge have been showcasing their product across the county with developments in Stevenage, Waltham Cross and Hemel. Its proximity to power is also a strong selling point for any data centre – just ask Google!


Towns such as St Albans, Watford and Stevenage are bustling centres of economic activity, offering a broad spectrum of retail. Watford’s Atria Shopping Centre has undergone significant regeneration, positioning it as a premier retail destination.


In the creative industries, the UK is now outstripping Hollywood in terms of studio floor space and Hertfordshire is seen as the focal point. Warner Bros., Sky Studios, Apple and Sunset Studios are all laying down roots for future growth in an opportunity driven sector.


Hertfordshire is at the heart of the renowned ‘Golden Triangle’ and a leading destination for Research & Development. There are currently over 200 life sciences business in the county with a number of global names who have their R&D headquarters based here including GSK - one of the world’s largest research-based pharmaceutical companies. With a new £900 million science campus being approved in Stevenage, the area is making use of its large pool of local life sciences talent and strategic location.


By choosing Hertfordshire, you would be in esteemed company and contributing to a £42 billion economy. At Brasier Freeth we are excited to be part of this journey, helping businesses and individuals find the perfect space to thrive.


By Tim Howlings Brasier Freeth COMMERCIAL PROPERTY MONTHLY 2024


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