Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}
office collaboration office meeting

Rental Growth in Super Prime Offices

Charles Dady • 31/10/2023

The office market has changed.  

Evolving working patterns and employee expectations are prompting companies to re-evaluate the workplace. The purpose of the office is changing from a place for focused work, which can now be done at home or elsewhere, to a space for ‘creativity, innovation and osmosis’, as highlighted by the Cushman & Wakefield 2023 What Occupiers Want survey.  

What is Your Company's Target Percentage for Communal Space?

communal space

Source: Cushman & Wakefield ‘What Occupiers Want Global Survey 2023’ 

Our report found that post Covid-19, office occupiers are now allocating 41% of their office space to collaborative spaces, up from 26% in 2019. Companies are keen to make their space as attractive as possible in order to encourage staff to make the commute and come back into the office.  

This is already visible in the data with best-in-class Grade A office take-up now accounting for 58% of the overall volume transacted, up from 45% pre-pandemic. 

Supply is however failing to keep up. Historically low availability across the key regional markets, combined with construction delays due to material and labour shortages, is starting to constrain occupier activity.  Across the ‘Big Five’ CBDs, there is now just one year’s supply of Grade A stock available, relative to long term average take up. This imbalance at the top of the market is leading to strong rental growth where ‘super prime’ product exists as shown below.  

In terms of future pipeline, developers are facing their most significant challenges for a generation with a perfect storm of rapid build cost inflation, 14 base rate increases and falling capital values rendering most speculative appraisals unviable at current rental levels.  

As well as the increased cost of labour and materials, developers are also having to invest more in the specification of their buildings in order to meet occupier expectations and to achieve multiple sustainability targets and accreditations.  

We’ve analysed the anticipated headline rents achievable for 10 schemes currently under construction across the main regional and South East markets, comparing these to their respective prime rents in Q1 2022. 

We expect to see an average rental premium of 17.9% achieved versus Q1 2022, indicating strong rental growth by mid-2025 by which time all 10 will have reached completion. 

New ERVs

Transactional evidence already proves that occupiers are willing to pay more for the very best or ‘super prime’ space that meets the latest ESG targets and their own aspirations. However, while tenants may be amenable to higher rents, they also expect more for their money. This is evident in the suite of sustainability credentials that the top buildings are now being challenged to achieve, along with features such as roof terraces, ‘end of trip’ facilities and, club lounges etc.  

While macro-economic pressures may start to stabilise during 2024, continued growth in prime office rents is essential if new space is to be developed in the next cycle.  

Insights in your inbox
Subscribe to get our latest research, thought leadership, insights, and news.

Related Insights

offices now

Offices Now

In this new Cushman & Wakefield broadcast, our expert insight teams provide a global snapshot of the Office sector, before focusing on four major cities.  
Catherine Chen • 18/10/2023
Office Buildings
Research • Investment / Capital Markets

European Glide Path Report

Our Report provides a synthesised view of the key themes and questions permeating the European capital markets landscape.
Sukhdeep Dhillon • 28/09/2023
Reworking the workplace
Article • Workplace

Re-working the Workplace

Follow our series of weekly blogs focusing on some of the most innovative developments in workplace strategy, researched from over 50 leading global companies.
Nicola Gillen • 02/05/2023


Get in touch and we can assist with any additional information you need.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All