UK Regional Offices MarketBeat

For the data behind the commentary, download the full Q1 2025 UK Offices Report.

Business Parks must Evolve to Stay Competitive in a City-Centric Era

The future of business parks has emerged as an intriguing post-pandemic theme, with the prevailing narrative being that occupiers are shifting from out-of-town locations to CBDs with stronger amenities and public transport credentials.

While suburban take-up has declined year-on-year since 2022, it was interesting to see business parks playing a significant role in Q1 2025. The South East saw its most active quarter since Q4 2022, with total take-up reaching 1.1 million sq ft, 55% of which was out of town. In the ‘Big Five’ regional markets, out-of-town activity was less pronounced, with city centre take-up reaching 832,500 sq ft, 60% of the total. Overall, out-of-town take-up accounted for 47% during Q1 which shows the continued relevance of business parks to the regional office market, but only where they meet changing occupier demand.

Two of the five largest transactions in Q1 were out of town with Cushman & Wakefield being agents on both projects. The largest deal saw a confidential occupier acquire 155,524 sq ft across two buildings at Green Park, Reading. The other saw EDF Energy take 78,284 sq ft at 1000 Aztec West, the South West’s first Net Zero Carbon out-of-town workspace.

The out-of-town markets are therefore holding their own where they offer an amenity rich environment, strong transport links and environmental credentials, which can often be delivered on more competitive terms to the CBDs. To achieve this however, business parks require a holistic approach and a consistent management strategy, which many can no longer provide due to their fragmented ownership. The ability for a single landlord to manage their development pipeline and provide occupiers with the ability to contract or expand across different assets under their control will separate the best from the rest.

From a capital markets standpoint, out of town locations commanding lower rents may require longer lease commitments from occupiers to drive viability for refurbishment. The resulting long-term income product may appeal to investors with a more defensive or income-focused strategy, particularly where parks are well-managed and with a good amenity offering.