Don’t Write Off Office Space As An Investment

New data from Rightmove and commercial property intelligence provider EG reveals that demand to lease office space is still higher than pre-pandemic 2019 despite the rise of home and hybrid working. 

The office sector has undergone significant change since the pandemic, with more people able to work from home or flexibly, plus the upcoming changes to EPC legislation, which state that all commercial properties will need a minimum of an EPC rating of C by 2027, and B by 2030. 

Demand to lease office space, the largest commercial property sector, is still 9.0 per cent higher than in 2019, although it is 8.0 per cent down on last year’s levels driven by the impact of rising inflation and interest rates on corporate spending. 

The combined Rightmove and EG dataset measures the number of enquiries that are being sent to commercial agents, with the demand data from both property websites indicating the same trends. The data compares January to April 2023 with the same four month period last year and in pre-pandemic 2019. 

Enquiries to lease retail spaces are also up compared to 2019, by 11 per cent, and are marginally below 2022’s levels indicating a desire from retailers to retain a physical presence on high streets. 

Demand to lease office space is holding up most strongly in Scotland, now being 11 per cent higher than 2019 and the only region to improve on last year. This contrasts to London where demand to lease office space is down 1.0 per cent on 2019 and 11 per cent behind last year’s levels. 

Looking more locally at cities, Leeds (46 per cent rise), Glasgow (26 per cent) and Liverpool (17 per cent) have seen the biggest increase in demand for office space to lease compared with 2019.

Lease enquiries by commercial sector 

Office enquiries by Region