South East office market set for rebound in 2022, says Lambert Smith Hampton

LSH office report

2022 looks set to be the year in which the South East office market finally stabilises and returns to more regular patterns of leasing activity, according to research published by commercial property consultancy Lambert Smith Hampton.

Despite the extended work from home directives during 2021, office leasing activity proved resilient with the South East market recording a 42 per cent increase in take-up (to 3.4 million sq ft), placing it just five per cent below the five-year average.

And with relatively low availability in most key markets, 2022 is predicted to see further significant growth in take-up as many occupiers slowly migrate back to the office, the report suggests.

The resulting flight to quality is seeing best rents being achieved across the South East, with a number of locations breaking through the £40 per sq ft prime headline rent hurdle.

Although availability has risen to 16 million sq ft with new stock coming on stream, it still remains 4 million sq ft below the previous peak in 2011.

Ryan Dean, national head of office advisory at Lambert Smith Hampton, said: “Having muddled along for the past two years, bigger corporates are starting to get serious about their occupational strategies and accommodation requirements.

“This year will see occupiers get off the fence and make long-term decisions about what space they need, and where. Though the evolving hybrid model is likely to take many forms, it will certainly accelerate transactions.”

In anticipation of increased demand for strategic leasing advice from both landlords and occupiers, LSH has increased the scope and reach of its South East office agency team.

This new agency model will move to a “hub and spoke” structure operating out of principal hubs in Reading and London with specialists based across a network of offices in Oxford, Milton Keynes, Maidenhead, Guildford and Southampton.