According to data from Savills, the UK office market (excluding central London) has seen 846,524 sq ft (78,644 sq m) of deals complete since the Covid-19 lockdown began on March 23rd 2020, equating to 52 separate deals across the country.
Most active regions include Birmingham, Manchester and the South East, which have seen transactions totalling 56,000 sq ft (5,202 sq m), 101,357 sq ft (9,416 sq m) and 450,000 sq ft (41,806 sq m) respectively. Key deals include the Government Property Agency taking 330,000 sq ft (30,658 sq m) at 2 Ruskin Square in Croydon, Amgen taking 34,000 sq ft (3,158 sq m) at 216 Cambridge Science Park and Markerstudy Insurance taking 41,000 sq ft (3,809 sq m) at Arndale House, Manchester.
Savills notes that historically the 10-year average for take-up in Q2 has reached up to 2.125 million sq ft (197,418 sq m). Looking at deals that went under offer prior to lockdown as well as those that, at present, are still progressing, would indicate that take up levels for Q2 are on a par with this figure at 2.176 million sq ft (202,157 sq m). However, it is important to note that there are no guarantees that all deals will complete during this quarter.
Jon Gardiner, national head of office agency at Savills, comments: “The unprecedented restrictions in place as a result of the Covid-19 pandemic have undoubtedly had an impact on market activity in Q2 2020. The office sector relies heavily on being able to get out to physically see buildings and whilst technology has played a role in mitigating this issue, many occupiers have preferred to hold off and await further clarity. Following the recent government announcement, viewings are now cautiously proceeding, which should help to encourage further activity as we head towards Q3.
“Ultimately, we have seen transactions progress with as many as 44 deals put under offer during the lockdown period. Whilst this has been hugely encouraging we are acutely aware that the true impact of the lockdown won’t be felt until later in 2020 as new demand over the past two months has been significantly reduced.”