Eastern M25 office market activity (excluding Docklands) has averaged 1m sq ft per annum since the pandemic, and the current year is expected to follow this trend, with year to date take up of just under 500,000 sq ft, with Docklands registering just under 300,000 sq ft of activity.

Businesses have continued to downsize their occupational requirements since the onset of the pandemic in 2020 and there has been a distinct lack of larger lettings since. In the the first nine months of this year there has only been one transaction above 25,000 sq ft in the Eastern M25 market (excluding Docklands), with Teeside University taking 26,720 sq ft at Here East. Docklands is also undergoing a period of transition, with many of the traditional occupiers in the area downsizing their footprint or relocating to the city. This is prompting a shift to life sciences, with several new laboratory based schemes being launched. The largest letting in Docklands in Q3 saw hVIVO take 39,050 sq ft at 40 Bank Street, E14, whilst Kadans Science Partner launched a 40,000 sq ft office and laboratory scheme at 20 Water Street E14.

Whilst supply has edged upwards, rising to 7.9m sq ft there continues to be a lack of grade A space outside of the East London and Docklands markets. There is a total of 1.4m sq ft of grade A supply at the end of Q3 2023, with less than 400,000 sq ft available outside of the East London and Docklands markets. The overall availability rate stands at 8.7%, with availability in Docklands at 17.3%, whilst the rest of the Eastern M25 has an availability rate of 5.8%.

The demand for space remains subdued, with just under 1m sq ft of requirements recorded, with the main focus on buildings of below 25,000 sq ft.

Prime rents across the region have remained largely stable since the onset of the pandemic but the next 12-18 months offers greater hope, with constrained supply in all locations aside from Docklands - particulalrly of grade A space. This has served to maintain rental values and despite the low levels of activity there remains the potential for owners to re purpose or upgrade buildings, with an upturn in demand likely to feed through to rental growth.