Office construction rises as staff return

One key bright spot for the industry over the summer has been new commercial office construction.

Driven by an upturn in work on medium and larger-sized commercial projects in the £20-100 million range – particularly in the English regions – the value of office project starts rose by 34% in the three months to July on a year earlier, according to the latest Glenigan Construction Review.

The improvement, due also to firms’ need to accommodate more staff returning to the office, looks to be gathering momentum. The latest Glenigan Index shows commercial office construction starts in the three months to August were slightly more than double the previous three months and up 232% on a year earlier.

The upturn in the sector chimes with the latest Glenigan Construction Forecast 2025-27, which predicts a 14% increase in the value of underlying office project starts this year, followed by further growth of 23% in 2026.

Outstanding performing regions

Meanwhile, the latest Glenigan Review highlights some recent dramatic rises in new office building activity in regions around the country. Outstanding performers included the West Midlands (where project starts rose more than 5-fold in May-July on a year earlier), the South West (where starts were up more than 3-fold), and the North West (starts up approaching 3-fold). Overall, main commercial office contract awards were up 16% on a year ago.

The upturn reflects growing demand for office space in the UK regions. A recent survey by Savills noted that the take-up of space in the first half of this year across the so-called Big Six regional city office markets – Manchester, Birmingham, Edinburgh, Glasgow, Bristol, and Leeds – exceeded the five-year average for the period by 4%. Take-up of office space in Manchester in the first six months was 32% above its five-year average and the highest for a first half period since 2019.

Yet with the new-build pipeline constrained by a lack of developer confidence, the Savills survey notes that refurbishments are stepping in to fill the gap. Some 84% of speculative office space set to be delivered across the Big Six cities over the next three years will come from refurbished stock.

A separate survey from agents Cushman & Wakefield notes that most of the firms that have recently relocated across five key cities, Birmingham, Bristol, Edinburgh, Leeds, and Manchester, have actually expanded their office footprints. The trend, it says, supports a more optimistic demand outlook.

Demand for desk space on the rise

Driving the rising demand is the growing number of staff returning to work in the office rather than from home. Indeed, desk use in regional offices is around 7% higher than in London, according to a recent British Council of Offices report. Business occupiers are leading the return to the office, with desk utilisation 13% higher amongst companies than in the public sector.

Glenigan data highlights numerous office construction projects that are set to get underway in the regions. In Leeds, Clegg Group has won the main contract for an £80m office extension involving over 7,000 sq m of space at 31 Wellington Street for Asset Capital (pictured). Work is set to start early in the new year and run for 17 months (Glenigan Project ID: 23071319).

Elsewhere in Yorkshire’s business capital, detailed plans have been approved for the Westbank Leeds development, a £120m scheme that will create 42,000 sqm of space across three offices and a hotel. Work is due to start early next year and run for 18 months (Glenigan Project ID: 22198252).

Across the Pennines in Manchester, detailed plans have been granted and a contract awarded for a £30 million scheme of two 6-storey office buildings and ground-floor commercial space at Airport City North, where Manchester Airport Group is a client. Work on the scheme, involving almost 20,000 sq m of space, is due to start later this year (Glenigan Project ID: 18337043).

Further south in Bristol, plans have been approved, and work is set to start later this year on the £32.24 million eight-storey Brabazon Station Office involving over 11,000 sq m of space at the former Filton Airfield. Work on the scheme for YTL Developments is set to run for 26 months (Glenigan Project ID: 25182835).