While the UK office market was undoubtedly characterised by uncertainty in 2017, 2018’s bounce back in both the leasing and investment markets meant that ‘despite Brexit’ became the words on everyone’s lips. Take-up across the country saw an uptick while corporate activity resumed with renewed vigour. So, with 2019 now underway, what will this year hold for the sector?

The first thing you can expect to see is regional rental growth. A combination of landlord caution and the normal cyclical lag between London and the rest of the country will mean that office rental growth will be stronger outside London both this year and next.

This is because all key regional cities are experiencing strong occupational demand and a lack of Grade A supply. With a surge in pre-let activity within regional cities, 47 per cent of the regional office development pipeline for 2019 is already taken, so we anticipate that this will continue especially in the face of the speculative development supply crunch.

The second theme that is likely to emerge in 2019 is the continued growth and evolution of the ‘Workspace as a Service’ (WaaS) concept. This all-encapsulating phenomenon is a response by landlords who recognise that their buildings and their offer, both in terms of services and their leasing proposition, need to become more customer centric.

One key element of this is how landlords deliver a flexible or serviced proposition within their buildings: in 2019 we envisage a shift away from leases to third party operators to more landlord controlled and managed solutions delivered by in-house teams and external advisors.

Thirdly, the last couple of years have been all about ‘wellness’, but 2019 is when we will see this actually start to affect occupational decisions. Tenants will be looking to drive productivity, and for office-based businesses this will mean an increasing focus on what makes staff work efficiently while continuing to ensure they enjoy working for their employer.

We are some way down the road from bean bags and table football as a response to ‘wellness’ and instead we are now more likely to see a focus on removing ‘productivity toxins’ from the workplace.

While there is no silver bullet for this, and one size definitely does not fit all, we can expect to see more focus on living costs, commuting patterns, occupational densities and alternative working environments, alongside old favourites such as light, temperature and noise in the quest to provide the optimum workplace.

Overall, despite the unique political situation we find ourselves in, we remain cautiously optimistic for the UK office market with the spotlight firmly on the regions. Undoubtedly there will be no avoiding Brexit, but the hope is that 2019’s buzzwords will once again be positive.

Further information

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