Prime office rents have remained broadly stable across most locations in the Eastern M25 region, although some of the stronger markets have regained the ground lost during the pandemic. Attention has been largely focused on major office locations outside the M25, with occupiers reviewing their strategies relative to their regional presence outside of the capital. That being said, the recent rise in occupier demand in the East London market suggests that some of these strategies are being revised, with record levels of requirements looking for space beyond Docklands and the City. It will be interesting to see if the next 12 months sees increased activity in the inner M25 market.
Prime office rents remained stable across most locations in the eastern M25 market over the past six months, with letting activity still recovering following the COVID lockdowns. There has been a significant shift by employers to return to the office to work, if only on a reduced number of days per week.
The only exception to this has been in the Essex market, where Basildon has seen prime rents move to £22.00 per sq ft at the end of Q3, on the back of several lettings and supply shortages.
The South East London & Kent market has seen rents slip over the past 12 months, with values in all locations down by 9.1% on average, with the demand for space reducing significantly.
Owner occupier capital values per sq ft have largely regained some of the ground lost over the pandemic, although major centres (e.g. Brentwood and Chelmsford) have seen the strongest recovery. Availability of freehold stock remains an issue.