Investment into commercial offices in the UK’s South East region – excluding Central London – was £1.49 billion in Q2 2021, the highest quarterly total since Q4 2013 and the second highest since 2005, according to Knight Frank research..
The figure rounded off one of the busiest first halves ever, the firm said. The first-half office sales total was £1.97 billion, the highest for more than 16 years and higher than the total for the full year 2020.
The second quarter figure was 400% up on Q2 2020, during the first phase of the pandemic. It was also 49% higher than the £997 million was invested in South East offices during the post-election period of Q1 2020, itself one of the busiest quarters for investment activity in recent years.
Key transactions in the first half of this year included the sale of Ealing Cross for £70.2 million, the sale of McLaren’s Technology Centre in Woking for £170 million and of the business park at Bedfont Lakes near Heathrow for £101 million.
Lettings also increase with TMT sector leading the way
Knight Frank said there were strong signs of a resumption of leasing activity in the first half, with take-up in H1 rising to 1.37 million sq ft (127,277 sq m), up 24% on H1 last year and the highest H1 period since 2018.
Six deals were for more than 50,000 sq ft (4,645 sq m). The technology, media and telecoms (TMT) sector underpinned leasing activity, accounting for 406,100 sq ft (37,728 sq m) of space, said Knight Frank, 30% of all leasing deals across the region.
“Market activity has been dominated by larger strategic transactions which have supported the overall performance of H1,” said Knight Frank national head of offices Emma Goodford. “TMT and Life Science sectors have dominated activity hence the focus on the M4, Oxford and Cambridge markets- a trend set to continue in H2 as we emerge from the pandemic.”