Northern Office Markets
Since the pandemic the office market has adapted to embrace the benefits of flexible work arrangements. As a result there's been a significant shift towards businesses taking less space, but prioritising top-tier work environments to entice employees back to the office in a hybrid work landscape.
Since 2023, this pursuit of quality has prompted landlords to invest in asset upgrades to attract tenants. Rising construction costs has significantly reduced value-add office pricing whilst restricting supply. This has led to a market reshuffle which is showing some signs of rebounding.
The trend for well-situated, eco-friendly buildings continues to surpass the available supply. The drive for premium space notably fueled rental growth in the majority of UK office markets in the last 3 years, as many cities continue to achieve new rental records. This momentum is expected to continue with an average forecasted growth of approximately 3% pa across most UK markets.
The typical cost of office space in the UK varies depending on factors such as location, property type, space grade, and duration on the market.
We have a look at each market in a little more detail below…
ESG is becoming a driving factor in space acquisition requirements, both investors and occupiers are focused on minimising their environmental impact whether that’s through development and refurbishment, or ongoing use of the space. It’s now becoming core to repurposing strategies to provide circular construction techniques, understanding of supply chains, and limits on CO2 emissions throughout the repurposing and as part of ongoing use, alongside improvements that help with the health and wellbeing of the people that interact with the buildings.
Whilst EPC Regulation has driven much of the advances to date, increased costs in energy supplies, and EU Taxonomy are driving further change in the industry. There’s now signficant reasons for occupiers and investors to deliver high-quality, sustainable and healthy offices.
Manchester
KEY OFFICE AREAS
Central Business Dirstrict
Spinningfields
Ancoats and Northern Quarter
Piccadilly
Media City & Salford Quays
Manchester Airport
Overview
Manchester is the largest and fastest growing regional centre in the UK, generating wealth equal to that of Leeds, Liverpool and Sheffield combined, coming second only to London both in business terms and the quality of its city environment and amenities.
Manchester city centre is now home to 590,000 persons with over 7.2 million people within an hours drive of the city allowing employers to draw upon a large and skilled workforce boosted by the UK’s largest university and Europe’s largest student population. With a 65% retention rate, businesses benefit from a strong well educated workforce.
Now the number one regional UK City for tech companies to locate with significant inward investment as office space is now home to the likes of Microsoft, Amazon, Google, IBM, Autotrader and Booking.com.
The tech sector is complemented by other industries including creative industries and growing digital ecosystems in areas such as FinTech. As the UK’s second largest creative, digital and tech hub, Manchester has a thriving community of businesses and is home to many major businesses, like fashion manufacturers Boohoo, online retailer THG (The Hut Group), and online electrical and white goods retailer AO.com.
Further developments in the knowledge economy has seen the growth of scientific space at Manchester Science Park, a science corridor along Wilmslow Road complimented by space in Alderley Edge aimed at businesses who require lab space.
Alongside this the city is also popular for major industries like finance, legal and business services, biotechnology, and tourism.
ESG Credentials
Manchester is the highest ranked big 6 city by Climate Emergency UK in terms of what it is doing to improve its impact on the Climate. The City Council has set a target to provide a zero-carbon city by 2038 or before – at least 12 years earlier than the national 2050 target. Using science based targets Manchester aims to reduce their emissions by 13% per annum halving its direct, energy related emissions by 2025, although they are currently missing this target.
It is ranked as one of 122 global “A list” cities as ranked by the Carbon Disclosure Project. The “A list” are the highest scoring cities in terms of their commitments to transparency and climate action. These cities are doing 3 times the amount of climate mitigation and adaption measures as non A list.
The Manchester Climate Adaptation and Resilience Advisory Group which was established in early 2020 has set out the following key objectives.
Staying within our carbon budgets
Climate adaptation and resilience
Health and wellbeing
Inclusive, zero carbon and climate resilient economy
We expect private and public sector to continue this ESG trend.
Manchester Offices
Prime Rents
£45 psf
Prime rents continued their upward trajectory, rising to £45.00 per sq ft by the end of 2024, with further growth to £45.50 per sq ft achieved in early 2025 in key locations such as St Michael’s and 4 Angel Square. A shortage of high-quality new-build stock and increased occupier emphasis on ESG credentials and amenity provision have contributed to this rental growth. Vacancy for prime Grade A space has now fallen to around 1.8%, while overall Grade A vacancy is estimated at just 3.3%.
Manchester remains a compelling choice for both domestic and international occupiers. Its mix of talent, transport infrastructure, and affordability compared to London continues to attract businesses ranging from global corporates such as Siemens, Adidas, and Kellogg’s, to fast-growing regional tech firms. A number of occupiers are also pursuing flight-to-quality strategies, consolidating footprints into better buildings with flexible configurations and enhanced energy efficiency.
Looking ahead, Manchester’s office market is expected to remain resilient. There remains a constrained development pipeline - with much of the upcoming space already under offer or pre-let, which is likely to maintain pressure on rents and provide opportunities for well-located refurbishment projects to capture demand. Investor appetite also remains strong, particularly for well-let, modern assets in core city center locations.
The market has remained buoyant from 2023 into 2025, in 2024 annual take-up reached c. 1.22 million sq ft, a 29% increase on 2023 and well above the five-year average. Activity was underpinned by a mix of professional services, education, tech and finance sectors. Grade A availability tightened further, and availability of new, best-in-class space becoming increasingly limited.
Momentum carried into the first quarter of 2025, where over 320,000 sq ft was transacted across 53 deals - the busiest Q1 since 2020. The largest deal was Auto Trader’s pre-let of 130,000 sq ft at 3 Circle Square, part of their long-term consolidation and expansion strategy. Other active occupiers included law firms, flexible workspace providers, and digital and life sciences businesses seeking innovation-led space around Oxford Road and the city’s growing tech cluster.
Birmingham
KEY OFFICE AREAS
City Centre Core
Brindleyplace
Colmore Row
Eastside and Digbeth
Solihull
Snowhill
Smithfield
Arena Central
Overview
Birmingham, is a leading business and cultural centre in the UK, marked by a vibrant office market and diverse industry sectors. Home to over 7.2 million individuals within an hour's drive, it offers employers access to a vast, educated and skilled workforce, through its significant educational institutions, which provide a student retention rate of over 60%.
Birmingham’s office market is underpinned by its manufacturing heritage and a pivot towards modern industries such as finance, technology, and creative sectors. The city benefits from its central location, substantial infrastructure investments, and a proactive approach to development.
The demand for Grade A office space remains robust, driven by companies prioritising quality and sustainability. Key developments such as Paradise, Arena Central, and Snowhill have been instrumental in delivering high-quality office spaces, with projects like Smithfield, Eastside and Digbeth further enhancing supply.
ESG Credentials
Birmingham has positioned itself as a leader in environmental sustainability among major UK cities, committing to becoming a zero-carbon city by 2038.
With targets set to reduce emissions significantly each year, the city aims to surpass national goals, driven by science-based targets. It's recognised globally for its commitment to climate action, making strides in climate mitigation and adaptation measures.
The Birmingham Climate Adaptation and Resilience Advisory Group plays a crucial role in guiding the city's efforts towards achieving these ambitious environmental goals
Birmingham Offices
Prime Rents
£41 psf
The market continues to show a clear shift toward high-specification and sustainable office space. Average annual take-up remains robust, holding close to 670,000 sq ft, supported by a gradual increase in office attendance. Occupiers now average 2.6 days per week in the office, up from 2.3 days in 2023, suggesting growing confidence in the return-to-office movement.
A number of new developments and refurbishments are contributing to this trend. The City Centre Tower is undergoing a £4.5 million refurbishment to provide modern workspace, co-working areas, wellness features and on-site gym facilities, with completion expected imminently. Three Chamberlain Square was completed in 2024, providing further Grade A stock to the market, while the Beorma Tower is under development and expected to add further high-quality space.
Birmingham’s office market continues to benefit from its diversity of occupier types, from SMEs to large corporates and public sector bodies. Key sectors include professional services, media, education, financial services and technology.
Looking ahead, constrained new supply and steady demand for well-located, high-quality space are likely to support further rental growth. There is also strong investor interest in repositioning existing buildings to meet ESG and wellness expectations. Birmingham remains one of the UK’s most important regional office markets, with solid fundamentals and a clear opportunity for sustainable, flexible office development.
In 2024, Birmingham's office market demonstrated notable resilience and growth, with total take-up rising to approximately 854,672 sq ft across 96 deals - significantly above the 2023 figure of around 700,000 sq ft. Major lettings included Aston University’s 189,053 sq ft at 10 Woodcock Street, the BBC’s 84,000 sq ft relocation to Typhoo Wharf in Digbeth, and a 68,192 sq ft lease by Global Banking School at 1 Brindleyplace.
Recent performance in early 2025 have been more measured. In H1, take-up slowed, totalling 182,794 sq ft across 38 deals, reflecting a more cautious pace in the city’s office demand.
Liverpool
KEY OFFICE AREAS
Commercial District
Liverpool Waters
Knowledge Quarter
Baltic Triangle
St Paul's Square
Liverpool Innovation Park
South Liverpool Business District
Overview
Liverpool is a significant business and cultural hub in the UK, leveraging its maritime heritage, public sector services and vibrant city life, with its growth as a distribution hub. This vibrant environment is supported by an excellent transport network and a focus on sustainability and quality in office spaces, making Liverpool a compelling choice for businesses looking to establish or expand their presence.
Liverpool is surrounded by a world class, multi-modal integrated transport infrastructure, helped by its Freeport status, it provides fast and affordable connectivity to London, Europe and the rest of the world. A number of major international organisations have chosen the city to base their operations, including Investec, Jaguar Land Rover, Sony and Cargill.
It has become a magnet for industries such as finance, technology, creative sectors, and life sciences, thanks to its strategic location and substantial infrastructure investments. The city's office market has been very resilient, with rental growth in recent years, demonstrating Liverpool's capacity to attract major commercial interest.
ESG Credentials
Liverpool City Council has committed to making Liverpool a Net Zero Carbon city by 2030.
This commitment involves a comprehensive action plan that includes decarbonising public buildings, expanding green energy usage, and enhancing citywide green infrastructure. Significant progress includes reducing CO2 emissions, planting over half a million trees in 25 years, and introducing sustainable warmth grants to improve residential energy efficiency.
The council also plans to further decarbonise transport and public services, contributing to a sustainable and resilient city environment.
Businesses in Liverpool are increasingly seeking office spaces that align with their sustainability objectives, fostering a healthier, more sustainable urban environment.
Liverpool Offices
Prime Rents
£29 psf
The 2024 office market showed significant momentum, with city centre take-up climbing to approximately 318,500 sq ft - a 12.5% increase from 2023’s 283,800 sq ft. The final quarter alone accounted for 103,318 sq ft across 21 deals. Leading transactions included Acorn Insurance’s acquisition and owner-occupation of 45,985 sq ft at Atlantic Pavilion (Royal Albert Dock), Direct Line’s leasing of 16,964 sq ft at 1 St Paul’s Square, Your Legal’s 6,060 sq ft at No. 8 Princes Dock, and creative-sector relocations by Wushu Studios (13,220 sq ft) and Sentric Music (13,000 sq ft) at Walker House.
While supply is around 500,000 to 572,000 sq ft, much of it is older stock or of lower quality. No new-build Grade A office is currently under construction in the Commercial District, though more than 330,000 sq ft of high-spec space has been delivered elsewhere in the city via schemes like No. 5 Princes Dock, Hemisphere, and Pall Mall.
There continues to be growing demand for high-quality smaller units under 5,000 sq ft. This structural mismatch between limited supply and sustained demand is creating upward pressure on rental values with prime refurbished assets now quoting in excess of £30. Major occupiers such as The Very Group, Jacobs, Unilever, Typhoo, and others continue to support the market through relocations and expansions.
With rental growth reinforced and interest rates stabilising, we anticipate increased investment in refurbishments, repurposing of secondary stock, and a wave of tenant relocations to smaller, more efficient, ESG-aligned spaces. Liverpool's affordability, evolving office inventory, and growing creative and TMT presence all underpin a positive market outlook for 2025.
Liverpool provides significantly lower rental costs compared to cities like Manchester, with average rents at the end of 2025, recorded at £20 per sq ft. This positions Liverpool as a cost-effective option for companies and historically has been a great location for the public sector and back office staff where companies can engage with a skilled workforce at a fraction of the office costs of other major cities.
Headline rents for the city’s best-in-class refurbished offices now stand at £29 per sq ft, reflecting strong demand amid a scarcity of new Grade A space. Well-located refurbished schemes are now commanding rents above this level, though such stock remains limited.
Leeds
KEY OFFICE AREAS
Leeds Central
Wellington Place
Burley
Beeston
Pudsey
Hunslet
Thorpe Park
Kirkstall Forge
Overview
In the heart of Yorkshire, Leeds is the third largest city in the UK outside of London, with a rich industrial past which is balanced by its modern, energetic culture. The city region has a £69bn economy, generating 5% of the UK’s output is home to approximately 779,000 and over 7 million people with a 1 hour drive of the City Centre, alongside a significant dynamic student population who continue to reside in the city after graduation.
Leeds is home to eight universities, giving one of the largest concentration of universities in Europe, producing some 39,000 graduates a year and a total student population of around 72,000.
With 32,600 businesses and 6,110 small and medium enterprises, reflecting the diversity and resilience of the economic base. and its central position in Britain, coupled with its international airport, road and mainline rail links, Leeds offers an excellent platform for global businesses looking to develop talent and grow their organisations in the North.
Leeds has over £7 billion of property schemes currently under construction, and a number of high-profile occupiers have chosen the city above other provincial cities including Channel 4 and the new Lloyds banking HQ, ensuring Leeds’ sustained expansion
ESG Credentials
In 2022 Leeds City Council was recognised as one of 122 city authorities across the world leading the way on climate action as part of a list published by the Carbon Disclosure Project (CDP). They’ve raised over £100m since 2019, averaging £35 million every year to support areas such as electric charging infrastructure, housing retrofit, public building decarbonisation and the expansion of the district heating PIPES network.
The LED streetlighting programme roll out has helped reduce energy usage by the city.
The Council are committed to making Leeds carbon neutral by 2030, as of 2023 they had reduced its energy usage by 23,000 tonnes per annum, or a 37% reduction compared to 2018/19 figures.
Their plan to meet their net zero pledge includes:
Reducing the Council’s carbon footprint
Reducing social housing emissions.
Reducing pollution and noise
Reducing the level of greenhouse gas emissions from buildings in the city.
Promoting clean transportation.
Promoting a less wasteful, low carbon economy.
Reducing flooding and other climate change risks.
Building a sustainable infrastructure.
Helping residents reduce their own carbon footprints.
Leeds Offices
Prime Rents
£40 psf
Out-of-town demand has also increased, with 94,861 sq ft transacted across 26 deals in Q1 2025 - representing a 140% increase compared to the same period in 2024. The most active sectors remain professional services, financial services, and government departments, which collectively accounted for over 65% of total occupier demand.
Prime rents have continued to strengthen, with the best space now achieving £40 to £41 per sq ft. This marks a 25% increase since 2019 and reflects the strong occupier appetite for modern, sustainable buildings with strong ESG credentials. Forecasts suggest that prime rents in Leeds may reach £43.50 per sq ft by the end of 2027.
Availability across Leeds totalled over 800,000 sq ft in late 2024, up 11% on the prior year. This increase was driven primarily by the return of space at West One (107,000 sq ft) and the continued presence of secondary stock. Approximately 64% of current supply is classed as secondary, while 36% (309,000 sq ft) is Grade A or prime. Grade A supply currently equates to just 0.8 years of average demand, indicating ongoing upward pressure on rents and increasing opportunities for refurbishment and repurposing.
We expect the combination of a limited pipeline and increasing demand for high-quality, ESG-compliant space to continue driving rental growth and investment. Refurbishment of well-located secondary stock is likely to become a key feature of the market over the next 12 to 24 months.
The city continues to attract a diverse range of occupiers, including Asda, Capita, Jet2, Sky, Channel 4, GHD, and other major organisations across legal, education, healthcare, and energy sectors. Mixed-use developments such as Aire Park are helping to transform the urban fabric and further improve the commercial appeal of the city.
Looking ahead, Leeds is expected to remain a strong performer in 2025 and beyond, supported by resilient demand, ongoing public and private sector investment, and a growing focus on environmental and workplace wellbeing standards.
Leeds has continued to establish itself as one of the UK’s most resilient and stable regional office markets. In 2023, total take-up reached 653,000 sq ft across 123 deals, 4% higher than the ten-year average and 9% above 2022. This was the highest annual take-up since 2019, with the largest deal being Lloyds Bank’s 124,000 sq ft acquisition at 11 & 12 Wellington Place.
The momentum carried through into 2024 and early 2025. Q1 2025 was particularly strong, with total take-up across the city hitting 241,300 sq ft. The city centre accounted for 72% of this figure, with notable deals including the University of Law leasing 15,241 sq ft at Yorkshire House and Wizu Workspace taking 13,860 sq ft at One Embankment.
Newcastle Upon Tyne
KEY OFFICE AREAS
City Centre
Quayside
Science Central
Gosforth Business Park
Newcastle Business Park
Cobalt Business Park
Overview
Newcastle is the commerical and administrative capital of the North East and the 7th largest city in the UK, with a resident population of around 283,000 people with 1.4 million people within 12 miles of the city centre. Newcastle Central station is situated on the East Coast main line providing a journey time of 2 hours and 40 minutes to London Kings Cross and 1 hour 30 minutes to Edinburgh.
Total employment numbers of c. 170,000 persons have remained broadly stable over the past decade, however this has masked a major restructuring of the city’s economy as it moved away from the traditional reliance of heavy industry to become a dynamic service orientated economy. Newcastle employment is now dominated by the service sector which accounts for approximately 84% of jobs in the city.
Newcastle is also the dominant retail centre in the North East, benefiting from extensive city centre provision centred around Northumberland Street and the Eldon Square Shopping Centre. In addition, the MetroCentre, one of Europe’s largest out of town shopping centres, is located close by in Gateshead. With approximately 2.2M sq ft of city centre retail space the city ranks 4th in the provincial cities and is ranked 5th out of the 100 PROMIS centres in both spending and number of multiple retailers.
The presence of renowned universities has been pivotal in attracting a skilled workforce, supporting the city's economic growth and fostering innovation. As part of developing an economy that can retain talen the city is developing its tech and science quarter, known as Newcastle Helix, a joint development between Newcastle City Council and Newcastle University. Described as a state-of-the-art city centre innovation district, it’ll provide a landmark 24-acre hybrid city quarter in the centre of Newcastle, aimed at attracting international tech and science businesses, whilst serving the local community and residents.
This reflects the city's growing attractiveness as a business, tech and science location but also highlights the continued demand for modern, flexible office spaces that cater to the evolving hybrid needs of today's workforce.
ESG Credentials
Newcastle upon Tyne is actively pursuing a range of ESG targets, reflecting its commitment to sustainability, social equity, and responsible governance.
Key targets and initiatives include:
Developing a Bottom Up Carbon Inventory (BUCI) and Net Zero Dashboard by creating a local, detailed view on emission sources in the city, to target reduction efforts effectively.
Promoting Green Skills and Economic Growth by commissioning a green economic sector and skills study to identify gaps, needs, and opportunities through collaboration with educational institutions like Newcastle University, Northumbria University, and Newcastle College to support a low carbon skills transition.
Supporting SMEs in Green Growth through the Business and IP Centre Newcastle, they’re providing business support to small and medium-sized enterprises (SMEs), helping them calculate their carbon footprint and form working groups for further action.
Climate Action Newcastle, is a community group, dedicated to sharing information, ideas, and actions to tackle climate change.
Sustainability Education at Newcastle University through a Sustainability Management MSc program aimed at developing leaders who can drive sustainability change within organisations.
These initiatives are part of Newcastle's broader commitment to becoming a more sustainable and inclusive city. By focusing on carbon reduction, green skills development, and community engagement.
Newcastle Offices
Prime Rents
£32 psf
The Newcastle office market has demonstrated considerable resilience and growth, particularly in the aftermath of the pandemic.
City-centre take-up in 2023 was 207,078 sq ft across 39 deals, down slightly from 224,332 sq ft in 2022, yet still above the five-year average of 185,000 sq ft. Annual take-up dipped in 2024 to 146,458 sq ft, down 35% y-o-y and 39% below the 10-year annual average. In 2024 Newcastle saw the average deal size fall to 3,487 sq ft from 4,761 sq ft in the previous year, whilst Grade A share of take-up rose to 74% up from 63% in 2023 as the UK occupier trend for smaller, better quality space continued.
Prime rents held steady at £32 per sq ft in Q4 2024; this represents a 31% increase since the pandemic began - the highest uplift of the regional cities tracked. Grade A supply fell to 267,528 sq ft in Q4 2024, down 17% from 2023 and slightly below the five-year average.
New supply remains constrained as no significant speculative office developments were under construction in the city centre by year-end .
Investment activity has been very muted with just £24.13 m transacted across 5 deals in 2024, a 61% decline year-on-year. The largest transaction was Stockbridge House sold to Newcastle City Council for c. £8.6 m. Whilst, prime yield stood at 7.50%, approximately 175 basis points softer than pre-pandemic .
H1 2025 provided the strongest start since 2019, with a total of 481,000 sq ft let - achieving 37% above its 10-year H1 average. This activity was heavily driven by pre-lets: HMRC’s mega-base (463,000 sq ft), and 1 Pilgrim Place (250,000 sq ft slated for 2027), including a 170,000 sq ft pre-let by the Department for Work and Pensions.
Newcastle’s office market displays strong momentum heading into H2 2025, despite a lull in 2024. The pipeline of large, predominantly public sector-anchored pre-lets, coupled with a strained Grade A supply, positions the city for sustained rental strength and refurbishment-led investment opportunities. If Leeds is all about resilience and ESG-driven demand, Newcastle is leaning into transformation backed by strategic, large-scale occupier commitments.