UK Regional Offices MarketBeat

For the data behind the commentary, download the full Q2 2026 UK Offices Report.

Occupational Market

Take-Up

Office take-up across the Big Five regional markets - Birmingham, Bristol, Edinburgh, Leeds, and Manchester, and the South East totalled 1.2 million sf in Q2 2026. This represents a 14% decline on the previous quarter and remained 27% below the five-year quarterly average. The slowdown was largely driven by an absence of large-scale transactions, with just one deal across the Big Five and South East CBDs exceeding 50,000 sf.

Grade A space accounted for 74% of all take-up, though volumes declined 16% quarter-on-quarter and remained 23% below the five-year average.

Supply and Vacancy

Overall availability fell by 1% in Q2 to 27.4 million sf, equating to a vacancy rate of 10.5% - marking five consecutive quarters of decline. This contraction occurred despite the completion of 475,000 sf of new office space during the quarter, 287,000 sf of which was let prior to completion.

At the close of Q2, approximately 3.0 million sf remained under construction, with 47% of this pipeline scheduled to complete in H2 2026. With 17% of the pipeline already let or under offer, just 2.5 million sf of speculative supply is expected to be delivered between now and mid-2028.

Rental Values

Manchester was the only Big Five market to record headline rental growth in Q2, with prime rents increasing 6.7% to £48.00 psf. Prime rents held stable across the majority of the South East, with Richmond, West London maintaining the regional benchmark at £63.00 psf. Birmingham and Bristol both held at £52.00 psf, the joint highest of the Big Five markets.

Deals currently under offer indicate that prime rents are likely to rise further in H2 2026, supported by continued occupier preference for Grade A space, constrained near-term supply, and a limited development pipeline.

Investment Market

H1 2026 Volumes and Activity

Investment volumes across the Big Five and South East regional office markets totalled £860 million during H1 2026. Activity remained muted, with dealmaking delayed by geopolitical uncertainty in the Middle East and associated macroeconomic pressures. In Q2 alone, investment volumes reached £353.9 million, a 30% decline on the previous quarter and 59% below the five-year quarterly average.

Manchester led the Big Five in Q2, recording £75.0 million across two transactions. Birmingham more than tripled its Q1 volumes to reach £47.2 million, while Leeds recorded £20.2 million after no transactions in Q1. Activity softened in Bristol (£39.3 million) and Edinburgh (£24.2 million).

Yields

Prime yields across the South East and Big Five regional office markets remained unchanged in Q2. Edinburgh continued to command a market premium, with prime yields stable at 6.50%, supported by sustained investor demand and constrained high-quality supply. The Bank Rate remained at 3.75% throughout Q2.

Owner-Occupier Acquisitions: An Emerging Resilience Trend

One of the defining features of H1 2026 has been the emergence of owner-occupier acquisitions as a source of resilience in an otherwise subdued investment market. Four owner-occupier deals accounted for 22% of total Big Five and South East investment volumes during H1, including:

• BNY Mellon acquired 4 Angel Square, Manchester, for £114 million
• Lloyds Banking Group purchased 10 Canons Way, Bristol, for £67 million
• IMA acquired The Malthouse, Leeds, for £4 million
• Döhler acquired Omron House, Milton Keynes, for £3.25 million

MSCI data indicates that office values across the Big Five fell by 34% between Q1 2019 and Q1 2026, with even more pronounced declines across the South East, where values more than halved. These lower pricing levels have enabled occupiers to secure premises at a substantial discount to previous market values while retaining the capacity to benefit from any longer-term recovery through yield compression.